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§  1  ir"^ 


CREATING  A  SHIPPING  BOARD,  A  NAVAL  AUXILIARY, 
AND  A  MERCHANT  MARINE 


HEARINGS 

BEFORE 

THE  COMMITTEE  ON  THE 
MERCHANT  MARINE  AND  FISHERIES 

HOUSE  OF  REPRESENTATIVES 

SIXTY-FOURTH  CONGRESS 
First  Session 

ON 


H.  R.  10500 


A  BILL  TO  ESTABLISH  A  UNITED  STATES  SHIPPING  BOARD 
FOR  THE  PURPOSE  OF  ENCOURAGING,  DEVELOPING,  AND 
CREATING  A  NAVAL  AUXILIARY  AND  NAVAL  RESERVE  AND 
AMERCHANT  MARINE  TO  MEET  THE  REQUIREMENTS  OFTHE 
COMMERCE  OF  THE  UNITED  STATES  WITH  ITS  TERRITORIES 
AND  POSSESSIONS,  AND  WITH  FOREIGN  COUN- 
TRIES, AND  FOR  OTHER  PURPOSES 


FEBRUARY  10  to  MARCH  9,  1916 


WASHINGTON 

GOVERNMENT  PRINTING  OFFIOK 

1918 


COMMITTEE  ON  THE  MEECHANT  MARINE  AND  FISHERIES. 
House  of  Representatives. 


JOSHUA  W.  ALEXANDER,  Missouri,  Chairman. 


RUFUS  HARDY,  Texas. 
MICHAEL  E.  BURKE,  Wisconsin. 
EDWARD  W.SAUNDERS,  Virginia. 
PETER  J.  DOOLING,  New  York. 
HENRY  BRUCKNER,  New  York. 
LADISLAS  LAZARO,  Louisiana. 
WILLIAM  S.  GOODWIN,  Arkansas. 
JAMES  F.  BYRNES,  South  Carolina. 
JESSE  D.  PRICE,  Marj'land. 
CARL  C.  VAN  DYKE,  Minnesota. 


OSCAR  L.  GRAY,  Alabama. 
DAVID  H.  KINCHELOE,  Kentucky. 
WILLIAM  S.  GREENE,  Massachusetts. 
ASHER  C.  HINDS,  Maine. 
CHARLES  F.  CURRY,  California. 
GEORGE  W.  EDMONDS,  Pennsylvania. 
WILLIAM  A.  RODENBERG,  Illinois. 
GEORGE  A.  LOUD,  Michigan. 
LINDLEY  H.  HADLEY,  Washington. 
FREDERICK  W.  ROWE,  New  York. 


J.  C.  Bay,  Clerk. 


II 


n 


.^ 


1^5 


\  (^/X-^ 


LIST  OF  WITNESSES. 

Page. 
Bertholf,  Capt.  Ellsworth  P.,  captain  commandant,  United  States  Coast  Guard, 

Treasury  Department 157-171 

Benson,  Rear  Admiral  William  S.,  Chief  of  Naval  Operations,  United  States 

Navy 239 

Bush,  Mr.  Irving  T.,  president  of  the  Bush  Terminal  Co.,  New  York 485-495 

Barber,  Mr.  James,  president  Barber  Steamship  Co.,  New  York. 539 

Bhine,  Capt.  J.  F.,  assistant  manager  Pacific  Coast  Steamship  Co.,  Seattle, 

Wash 591 

Baker,  Mr.  B.  N.,  Baltimore,  Md 609 

Chamberlain,  Mr.  E.  T.,  Commissioner  of  NaAagation,  Department  of  Commerce  179 

Childs,  ^^r.  Harris,  export  and  import  merchant.  New  York 532 

Cowles,  Mr.  James  L.,  president  of  the  World  Postal  League,  Washington,  D.  C.  665 
Douglas,  Mr.  William  H.,  chairman  committee  on  merchant  marine,  Chamber 

of  Commerce  of  the  United  States,  New  York 9 

Ewell,  Mr.  James  L.,  secretary  of  National  Merchant  Marine  Association,  New 

York 422 

Farquhar,  Mr.  A.  B.,  vice  president  of  the  Chamber  of  Commerce  of  the  United 

States,  York,  Pa 161 

Fahey,  Mr.  John  H.,  ex-president  of  the  Chamber  of  Commerce  of  the  United 

States,  Boston,  Mass 455 

Franklin,  Mr.  P.  A.  S.,  receiver  International  Mercantile  Marine  Co.,  New 

York 516 

Gibboney,  Mr.  Stuart  G.,  general  counsel,  Hudson  Navigation  Co.,  New  York.  439 

Gillett,  Mr.  J.  N.,  ex-governor  of  California,  San  Francisco,  Cal 561 

Hampton,  Mr.  George  P.,  editor  Farmers'  Open  Forum,  Washington,  D.  C 671 

Humphrey,  Hon.  William  E.,  Member  of  Congress  from  State  of  Washington. .  721 

Ivj',  Mr.  Thomas  P.,  forest  engineer.  South  Conwaj',  N.  H 580 

Knox,  Mr.  William  H.,  exporter.  New  York 522 

Kirliu,  Mr.  J.  Parker,  attorney  at  law.  New  York 540 

p      Lake,  Mr.  Devereux,  manager  American  Cast  Iron  Pipe  Co.,  New  York 397 

^     Luckenbach,  Mr.  Edgar  F.,  shipowner.  New  York 534 

C")     McAdoo,  Hon.  William  G.,  Secretary  of  the  Treasury 259 

\      McSparran,  Mr.  John  A.,  representing  State  Grange  of  Pennsylvania,  Furniss, 

Pa 416 

Penton,  Mr.  John  A.,  editor  of  Iron  Trade  Review,  Cleveland,  Ohio 568 

Peck,  Mr.  William  E.,  importer  and  exporter.  New  York 533 

Vy  ""  Redfield,  Hon.  William  C,  Secretary  of  Commerce 35 

1       Rosenthal,  Mr.  Benjamin  J.,  banker  and  merchant,  Chicago,  111 203 

Rhett,  Mr.  R.  G.,  president  Chamber  of  Commerce  of  the  United  States,  Charles- 
ton, S .  C 492 

Strauss,  Mr.  Albert,  representing  John  W.  Seligman  &  Co.,  New  York 486 

Slechta,  Mr.  Joseph  J.,  agent  Brazilian  Steamship  Co.,  New  York 639 

Smith.  Capt.  W.  S.  A.,  Department  of  Agriculture 701-714 

Starr,  Mr.  Western,  farmer,  Westover,  Md 411 

Wilson,  Hon.  William  B.,  Secretary  of  Labor 385 

Wescott,  Capt.  WilUam  A.,  president  ^Masters,  Mates  and  Pilots  of  the  Pacific, 

San  Francisco,  Cal 707 

m 


H73Bl,l  ^,4^^^/0 


EXHIBITS. 

Page. 

Text  of  shipping  bill  (H.  R.  10500) 5 

Report  of  surveyor  of  customs,  San  Francisco,  regarding  language  test  of  crew 

on  steamship  China .- -^6 

Excerpt  from  London  Economist  regarding  requisitioning  of  British  ships  for 

commercial  purposes ^9 

List  of  vessels  under  contract  in  private  American  yards,  Feb.  1 ,  191H 40 

"War  losses  of  shipping,"  by  Mr.  E.  T.  Chamberlain,  Commissioner  of  Naviga- 
tion          48 

Merchant  vessels  under  construction  abroad 49 

Comparison  of  steel  vessels  building  in  United  States,  1900  to  191.T 49 

Requirements  of  the  Italian  law,  regarding  licenses  for  shij^ping  trade 50 

Letter  from  Mr.  E.  C.  Gillette,  superintendent  of  marine  construction,  regarding 

construction  of  vessels 53 

Letter  from  Mr.  P.  L.  Bell,  Seattle,  Wash.,  regarding  "Cost  of  construction  and 

operation  of  wooden  auxiliary  sailing  schooners  " 55 

Letter  from  Mr.  E.  Piatt  Stratton,  regarding  "^Construction  of  vessels" 58 

Part  of  letter  from  American  Bureau  of  Shipping,  regarding  Mr.  Stratton's  sug- 
gestions   , 60 

Detailed  statement  of  Mr.  E.  Piatt  Stratton,  regarding  "Method  of  constructing 

vessels  " fiO 

Report  of  Mr.  A.  H.  Boole,  of  the  Interstate  Commerce  Commission <i:i 

Appendix  A,  Tiible  1,  number  and  net  tonnage  of  vessel j  in  the  foreign 

trade  of  the  United  States  durirg  the  years  ended  July  31 , 1 914  and  1915. .         75 
Appendix  A,  Table  2.  number  and  net  tonnage  of  sail  and  steam  vessels  in 
the  foreign  ser^'ice  of  the  United  States  dining  jear  ended  July  3] ,  1915, 

and  not  in  the  service  during  year  preceding _. 76 

Appendix  A,  Table  3.  number  and  net  tonnage  of  \e3sels  in  the  foreign 
trade  of  the  United  States  admitted  from  foreign  to  American  registry 

under  act  of  August  18,  1914,  ditrii  g  year  ended  July  31,  1915 77 

Appendix  A,  Table  4,  number  and  net  tonnage  of  sail  and  steam  vessels  in 
the  foreign  service  of  the  United  States  withdrawn  for  causes  of  war 

during  year  er ded  July  31,  1915 78 

Appendix  B,  T?.lile  1,  net  tonnage  of  sailing  and  steam  vessels  entered  and 
cle?red  at  the  leading  ports  of  the  United  Statse  during  the  years  ended 
July  31,  1914  and  1915,  distributed  with  respect  to  domestic  ports  of 

entries  and  clearances 79 

Appendix  B,  Table  2,  net  tonnage  of  sail  and  steam  vessels  entered  and 
cleared  at  leading  ports  of  the  United  States  in  its  trade  with  foreign 
countries  during  the  years  ended  July  31,  1914  and  1915,  distributed 

with  respect  to  foreign  countries  and  registries 80 

Appendix  B,  Table  3,  net  tonnage  entered  and  cleared  at  leading  ports  of 
the  United  States  in  its  trade  with  foreign  countries  during  the  years 
ended  Ju'\-  31,  1914  and  1915,  distributed  with  respect  to  sail  and  steam 

vessels,  and  their  registry 84 

Appendix  B,  Table  4,  net  tonnage  of  sail  and  steam  vessels  entered  and 

cleared  during  the  years  ended  July  31,  1914  and  1915 84 

Appendix  C,  Table  1,  foreign  commerce  of  the  United  States,  principal 
imports  and  exports  of  domestic  and  foreign  merchandise  for  the  years  . 

ended  July  31,  1914  and  1915 99 

Appendix  D,  Table  1,  representative  charter  rates  on  grain  in  the  foreign 

trade  of  the  United  States  and  Canada 100 

Appendix  B,  Table  2,  berth  rates  in  the  foreign  trade  of  the  United  States.       108 
Appendix  E,  Table  1,  rates  of  premium  announced  by  the  United  States 

Bmeau  of  War  Risk  Insurance 114 

Appendix  E,  Table  2,  rates  of  premium  on  war-risk  insiirance  quoted  by 

insiuance  companies  on  general  cargoes  for  year  ended  July  31,  1915. .       115 
Appendix  F,  Table  1,  all  classes  of  aliens  admitted,  departed,  debarred, 
and  deported,  and  citizens  arrived  and  departed,  by  ports,  years  ended 
July,  1914,  and  July,  1915 123 


IV 


EXHIBITS.  V 

Page. 

Letter  from  Saco-Lowell  t^hops  regarding?  freight  rates  to  China 125 

Letter  from  American  Cast  Irou  Pipe  Co.  regarding  freight  rates  to  Argentine 
Republic 126 

Letter  from  AU'red  A.  Winslow,  American  consul  general,  Auckland,  New 
Zealand,  regarding  freight  rates  to  London  and  New  York 128 

Letter  from  A.  II.  Baldwin,  American  commercial  attache,  regarding  freight 
rates  from  England  to  South  America 130 

Letter  from  German  American  Button  Co.  regarding  freight  rates  to  Australia 
and  New  Zealand !^ 130 

New.spaper  clip))ing  from  New  York  Herald,  February  6,  1916,  "Whence  \vill 

come  merchant  marine?  " 151 

Letter  from  surveyor  of  port,  San  Francisco,  giving  comparative  list  of  crew 
of  an  English  and  American  steamship 152 

"British  control  of  merchant  shipping,"  by  Mr.  E.  T.  Chamberlain,  Comrais- 
.sioner  of  Navigation 155 

Memorandum  on  Naval  Reserve  feature  of  shipping  bill,  by  Capt.  E.  P.  Berth- 
olf 157 

Clipping  from  San  Francisco  Daily  Commercial  News,  regarding  seamen's  act. . .       160 

System  of  British  Board  of  Trade,  compelling  business  men  to  assist  in  building 

up  merchant  marine 168 

Shii)i)ing  l)ill.  cost  of  o])oration,  t^-pical  .ships,  using  average  wage  and  freight 

rates  whicli  obtaineil  htMorc  the  Eiiro])ean  war 175 

Statement  of  Mr.  David  A.  Wells  in  ISOl  regarding  antiquated  navigation  laws. .       179 

Summary  of  Mr.  Wells's  views  on  navigation  laws 180 

Letter  to  Senator  Fletcher  by  Mr.  E.  T.  Chamberlain,  regarding  Mr.  Wells' 
statement 184 

Oiticism  of  navigation  laws,  by  Capt.  Dollar,  Capt.  Lockhurst,  and  others 189 

Letters  from  Mr.  Robert  Bridges,  president  of  commissioners  of  the  port  of 
Seattle,  regarding  discriminations  against  terminals  of  Seattle 213-215 

Letter  from  D.  M.  King,  secretary  of  San  Francisco  Chamber  of  Commerce,  re- 
ganling  ship])ing  in  trans-Pacific  trade 216 

Letter  to  I)oard  of  (lirectirs  of  San  Francisco  Chamber  of  Commerce,  from  promi- 
nent shi])pers,  regardin<i;  shipping  in  trans-Pacific  trade 216 

Report  l)y  ^ir.  ICdmun  1  Billings,  collector  of  customs  at  Boston,  Mass.,  regarding 

shipping  conditions  at  that  ])ort 217 

Report  by  Mr.  Dudley  Field  Malone,  collector  of  customs  at  New  York,  regard- 
ing shipping  conditions  at  that  port 224 

Resohition  by  Canners'  Le^ue  of  California,  regarding  need  of  merchant  marine.       226 

Letter  from  Mr.  P.  T.  Dodge,  president  International  Paper  Co.,  regarding  lack 
of  shipping  facilities 226 

Letter  from  >[r.  George  S.  Taylor,  secretary  Society  for  Development  of  Ameri- 
can Shipping,  New  Orleans,  La.,  regarding  ocean  freight  rates 227 

Clipping  from  New  Orleans  Times-Picayune,  regarding  increase  in  cotton 
rates 227 

Letter  from  Mr,  B.  Zalduondo,  president  Chamber  of  Commerce,  Porto  Rico, 
regarding  steamship  combinations  and  freight  rates 229 

Letter  from  Mr.  Daniel  Kelleher,  Seattle,  Wash.,  regarding  lumber  export  situa- 
tion in  the  Northwest 230 

Letter  from  Indiana  Quartered  Oak  Co..  New  York,  regarding  difficulties 
arising  under  present  form  of  bill  of  lading 231 

Letter  from  Paul  C.  Hani-sch  &  Co.,  London,  regarding  excessive  freight  rates. .       232 

Letter  from  American  Express  Co.,  foreign  department,  Liverpool,  regarding 
ocean  rates 232 

Letter  from  American  Association  of  North  China,  Tientsin  branch,  Tientsin, 
China,  regarding  resolution  adopted  by  executive  committee 233 

Report  of  merchant  marine  committee  of  Louis^^.lle  Board  of  Trade 234 

Letter  from  Mr.  C.  W.  A.  Veditz,  commercial  attach^,  Paris,  regarding  proposed 

French  shipping  law 236 

CUpping  from  Paris  "Le  Temps,"  indicating  main  features  of  French  shipping 
law 236 

Letter  from  Mr.  Hugo  Lorber,  regarding  Chin  a- Java- Japan  Line 238 

Letter  from  Mr.  A.  B.  Hammond,  San  Francisco,  Cal.,  showing  manner  of  dis- 
cussions before  chamber  of  commerce 238 

Letter  from  Acting  Secretary  of  the  Navy  W.  S.  Benson,  regarding  "Require- 
ments in  case  of  war  " 245 

Weeks  resolution.  No.  317.  Sixtv-third  Congress 259-339 


VI  EXHIBITS. 

Page. 
Statement  of  Secretary  of  the  Treasury,  August  7,  1914,  regarding  calling  con- 
ference of  representatives  of  shipping  interests  and  bankers 263 

Clipping  from  the  Stockton  (Cal.)  Independent,  "Steamer  Robert  Dollar  is  sold 

to  Japanese  " 274 

Section  2  of  Federal  reserve  act 277 

Quotation  from  speech  of  Mr.  Fairfax  Harrison,  president  of  Southern  Railway 

Co.,  at  New  Orleans,  January  28, 1916 , 287 

Quotation  from  message  of  the  President 310 

Resolution  adopted  by  the  Pan  American  Congress 329 

Quotation  from  letter  of  Dr.  L.  S.  Rowe,  secretary  general  of  the  Pan  American 

1  inancial  Conference 329 

Press  notice  issued  by  the  State  Department,  February  11,  1916,  regarding 

shortage  of  ocean  tonnage 330 

Additional  statement  by  the  Secretary  of  the  Treasury 337 

Exhibits  of  the  Secretarv  of  the  Treasurv 338 

Exhibit  No.  1: 

Senate  Report  No.  718,  Sixty-third  Congress,  second  session.  United 
States  Navy  mail  lines  between  United  States  and  South  America. .       338 

Senate  resolution  317,  Sixty-third  Congress 339 

Fetter  from  the  Secretary  of  the  Navy  to  the  chairman  of  the  Commit- 
tee on  Naval  Affairs,  transmitting  information  on  Senate  resolution 

317 339 

Exhibit  No,  2:  S.  5259,  Sixty-third  Congress,  second  session  (a  bill  to  estab- 
lish one  or  more  United  States  Xavy  mail  lines  between  the  United  States 

and  South  America) 345 

Exhibit  No.  3:  Extract  from  annual  report  of  the  director  of  Bureau  of  War- 
Risk  Insurance,  submitted  to  Congress  December  7, 1915 346 

Exhibit  No.  4:  Debate  in  Senate  March  26, 1914,  on  Senator  Weeks's  resolu- 
tion (S.  Res.  317) 346 

Exhibit  No.  5:  Debate  in  the  Senate  August  3,  1914,  on  Weeks  bill ......       351 

Exhibit  No.  6:  Congestion  of  freight  and  embargoes  by  railroads  primarily 

on  account  of  lack  of  ships  to  move  our  export  trade 368 

Exhibit  No.  7:  Extracts  from  newspapers,  regarding  freight  congestion, 

due  primarily  to  lack  of  ships  to  handle  export  trade 370 

New  York  World 370-372 

New  York  Tribune 371-373 

New  York  Commercial 371-373 

Louisville  Courier-Journal 371 

Scientific  American  (Herbert  T.  Wade) 371 

Chicago  Tribune. 372 

Newark  News 372 

Washington  Star 372 

National  Jeffersonian 373 

Philadelphia  Ledger 373 

Exhibit  No.  8:  Exhibits  from  Document  No.  673,  Sixty-third  Congress, 

showing  vessels  on  the  market  at  that  time 374 

Exhibit  No.  9:  Statement  showing  vessels  purchased  by  the  Navy  during 
the  Spanish -American  War,  the  price  paid  for  each,  and  the  disposition 

made  of  those  not  now  the  property  of  the  Navy 378 

Exhibit  No.  9A:  Statement  showing  "list  of  vessels  purchased  by  the  Ignited 
States  Navy  dming  the  Spanish-American  ^^'ar,  showing  names  before 

purchase,  dates  of  pvu-chase,  and  names  of  proA^itius  owners 379 

Exhibit  No.  10:  Letter  from  the  Secretary  of  the!  Navy  regarding  vessels 

chartered  by  the  Navy  during  the  Spanish-Ammcan  War 381 

Exhibit  No.  11:  Sales  of  ships  in  March,  1915,  and  February,  1916,  as  taken 

from  Shipping  Illustrated '.../ 381 

Exhibit  No.  12:  Comparative  statement  of  ocean  freight  rates  on  grain  and 

^  cotton.  July  1,  1014,  and  February  10,  1916 382 

Exhibit  No.  13:  Citizens  arriving  and  departing,  shown  by  months,  during 

seven  months  ended  February,  1914,  1915,  and  1916.  respectively 382 

Exhibit  No.  14:  Statement  of  Mr.  P.  H.  "\W  Ross,  president  of  the  National 

Marine  League  of  the  United  S :ates. ../ 382 

Resolution  adopted  by  the  American  Fedejmion  of  Labor  at  its  convention  in 

San  Francisco,  Cal.,  November  16,  1915.' 394 

Resolution  adopted  by  the  Nineteenth  Annual  Convention  of  the  International 
Seamen's  Union  of  America 395 


EXHIBITS.  Vn 

Page. 
Resolution  adopted  by  the  Thirty-third  Annual  Convention  of  the  Illinois  State 

Federation  of  Labor 395 

Resolution  adopted  by  the  National  Cirange,  Wilmington,  Del 416 

Resolution  passed  by  Pennsylvania  State  Grange 417 

Statement  by  the  Philadelphia  Bourse 437 

Referendum  No.  0.  Chamber  of  Commerce  of  the  United  States 472 

Letter  from  Mr.  S3th  Low.  president  of  the  New  York  Chamber  of  Commerce. .  496 
Letter  from  Mr.  George  S.  Dearborn,  president  of  the  American-Hawaiian 

Steamship  Co 553 

Letter  from  Mr.  George  L.  Duval,  chairman  of  maritime  committee  of  the 

Merchants  Association  of  New  York 554 

Memorial  from  the  Philadelphia  Board  of  Trade 579 

Proposed  bill  of  Capt.  Blaine 607 

Clipping  from  New  York  Times,  "Fears  coal  competition" 611 

Memorial  of  the  Philadelphia  Maritime  Exchange 637 

Legislative  Committee  of  National  Grange  conference  with  Farmers'  Union 672 

Resolution  of  the  Washington  State  Grange,  favoring  shipping  bill 672 

Resolution  of  the  Idaho  State  Grange,  favoring  shipping  bill 672 

Clipping  from  Agricultural  Grange  News  "Nation-owned  ships  against  pre- 
paredness," by  Slate  Master  C.  B.  Kegley 674 

"Government  ships  and  farmers'  rights"  by  State  Master  C.  B.  Kegley 675 

Clipping  from  Pennsylvania  Cirange  News,  "Uow  the  price  of  a  bushel  of  wheat 

is  fixed,"  by  Past  Master  William  T.  Creasy 676 

Clipping  from  the  Farmers'  Open  Foriun,  "A  live-wire  farmers'  problem,"  by 

Mr.  R.  L.  ("ununings,  chairman  service  committee.  Maine  Grange 677 

"Where  the  fanners'  profits  go,"  by  Mr.  R.  L.  ("ummings 679 

Editorial  from  Succossful  Farming,  "Ocean  freight  rates " 681 

House  Joint  Resolution  311,   introduced  by  Congressman  J.  W.   Alexander, 

"Steadying  the  world's  price  of  the  staples" 083 

Report  of  the  ("oinniitlee  on  Foreign  Affairs  on  House  Joint  Resolution  311 683 

Excerjjts  from  debate  in  Congress  on  House  Joint  Resolution  311 684 

Discustion  of  the  resolution,  "iSteadying  the  world's  price  of  the  staples,"  at  the 

International  Institute  of  Agriculture  at  Rome 685 

Statement  of  Da\id  J.  Lubin,  "Power  of  the  ship  combine  to  raise  and  lower 

the  ])rice  of  the  stajdes  of  agriculture  " 691 

L3tter  from  Hon.  George  A.  Loud  to  Admiral  Blue  in  reference  to  naval  auxiUa- 

lioa 698 

Letter  from  Mr.  J.  H.  Dajiion,  Acting  Chief  of  Bureau  of  Navigation,  Navy 

Department,  referring  to  naval  colliers 699 

Letter  from  Hon.  Jose])hus  Daniels  to  Hon.  L.  P.  Padgett,  referring  to  naval 

colliers .' 699 

StatemeiU  from  the  Guild  Gazette,  giving  discussion  of  the  members  of  the 

British  Parliament  in  reference  to  alien  officers 711 

Statement  by  Mr.  Loud,  "Naval  auxiliaries" 718 

(.'lipping  from  the  Christian  Science  Monitor,   "Trade  proposals  of  Glasgow 

merchants  " 719 

( 'lipping  from  the  Post  Intelligencer,  entitled  ' '  American  seamen  " 727 

Letter  submitted  by  Hon.  W.  E.  Humphrey  in  reference  to  salaries  paid  seamen 

and  officers 728 

Salaries  paid  seamen  and  officers ; 730 

Resolution  by  a  committee  to  the  Maine  State  Board  of  Trade 746 

Resolution  from  the  Maritime  Exchange  of  New  York 747 

Resolution  from  the  ^lobile  (Ala. )  <  'hamber  of  ( "ommerce  favoring  shi])ping  bill .  749 
Letter  from  the  Commissioner  of  Navigation  showing  why  foreign  ships  are  not 

taking  out  American  registers 749 

List  of  foreign-built  vessels  to  which  American  registers  have  been  granted  under 

the  act  ol"^ August  18,  1914 749 

Extract  from  letter  of  Commercial  Attache  Arnold's  weekly  report  to  Bureau 

of  Foreign  and  Domestic  Commerce,  regarding  shipping  on  the  Pacific 755 

Excerpt  from  letter  of  Mr.  Daniel  Kelleher  to  Secretary  of  the  Treasury  regard- 
ing shipping  lumber  on  the  Pacific 756 

CUpping  from  (  ommerce  Reports :  ' '  World  built  fewer  ships  last  year  " 756 

Text  of  shipping  bill  presented  in  the  French  Chamber  of  Deputies 757 

Letter  from  Dr.  E.  E.  Pratt  quoting  statement  in  the  Agence  Economique  and 

Financiere  relative  to  freight  situation  in  Italy 760 

(flipping  from  Commerce  Reports:  " ( 'oal  freights  from  (^ardiff " 760 


Yin  EXHIBITS. 

Page. 
Letter  from  Hon.  Frank  L.  Polk,  counselor,  Department  of  State,  relative  to 

letter  received  from  President  of  Salvador  in  regard  to  shipping. 761 

Letter  from  Department  of  Commerce  in  reference  to  bone  deposits  on  the 

Pribilof  Islands 761 

Resolution  by  the  Jefferson  Grange.  Moody  County,  S.  Dak 763 

Shipping  catechism,  by  Capt.  C.  A.  McAllister,  Coast  Guard 764 

Extract  of  letter  from  Commercial  Attache  Baldwin,  at  London,  regarding  the 

"British  Shipping  Board  " _•  -  -       766 

Clipping  from  the  London  Gazette  concerning  functions  of  the  ship  licensing 

committee 766 

Memorandum  showing  ocean  freight  rates  on  tobacco 767 

Letter  from  the  Freiberg  Lumber  Co.,  Cincinnati,  Ohio,  showing  lack  of  ship- 
ping facilities 768 

Letter  from  Mr.  Arthur  Hastings,  president  American  Writing  Paper  Co.,  re- 
garding shipping  conditions 768 

Clipping  from  Montreal  Gazette:  "Government-owned  line  of  Hudson  Bay 

steamers  " 768 

Letter  from  Mr.  William  E.  Peck,  exporter,  New  York,  regarding  shipping 

conditions 769 

Letter  from  the  Secretary  of  Commerce,  quoting  letter  from  \\Tiite  Star  Line, 

regarding  shipments  to  Liverpool 769 

Letter  from  Dr.  E.  E.  Pratt,  quoting  ca  legram  from  Commercial  Attach^ 

Veditz  at  Madrid,  regarding  shipping  commission  of  Spanish  Government..       770 
Clipping  from  Commerce  Reports,  "Suspension  of  Spanish  Steamsliip  Line " . .       770 

Resolution  of  the  American  Cham'  er  of  Commerce  of  ( liina 770 

Letter  from  Mr.  Lorenzo  Daniels,  New  York 772 

liOtter  from  Dr.  E.  E.  Pratt,  transmitting  data  on  the  su  ject  of  ocean  freight 

rates -  -       772 

Report  )  y  the  New  York  office  of  the  Bureau  of  Foreign  and  Domestic 
Commerce,  "Increase  in  ocean  freight  rates  from  January  1.  1914.  to 

January  1,  1916  " 775 

Report  .  y  the  Boston  office  of  the  Bureau  of  Foreign  and  Domestic  Com- 
merce, "Increase  in  ocean  freight  rates  from  January  1.  1914,  to  January 

1,1916" 788 

Report  '  y  the  Seattle  office  of  the  Bureau  of  Foreign  and  Domestic  Com- 
merce, "Increase  in  ocean  freight  rates  to  the  Far  East  from  January  1, 

1914,  to  January  1,  1916  " 794 

Report  1  y  the  New  Orleans  office  of  the  Bureau  of  Foreign  and  Domestic 
Commerce,  "Increase  in  ocean  freight  rates  from  January  1,  1914,  to 

January  1,  1916  " 799 

Ocean  freight  rates  to  and  from  ports  of  the  United  Kingdom 803 

Freight  rates  on  coal  from  British  ports  in  the  years  1909  to  1916 805 

United  Kingdom,  outward  and  inward  rates,  1897  to  1914 817 

Report  I  y  the  San  Francisco  office  of  the  Bureau  of  Foreign  and  Domestic 
Commerce,  relative  to  ocean  freight  rates  from  the  port  of  San  Francisco.       818 
Telegram  from  Mr.  William  Livingstone,  president  of  the  Lake  Carriers'  Asso- 
ciation, Detroit,  Mich.,  in  reference  to  length.  1  readth,  and  depth  of  locks 
of  Welland  Canal 819 


CREATING  A  SHIPPLNG  BOARD,  A  NAVAL  AUXILIARY,  AND  A 
MERCHANT  MARINE. 


Committee  on  the  Merchant  Marine  and  Fisheries, 

House  of  Representatives, 
Wasliiiigton,  D.  C,  February  10,  1916. 

The  committee  this  day  met  at  10.30  a.  m.,  Hon.  Joshua  W.  Alex- 
ander (chairman)  presiding. 

The  Chairman.  This  hearing  is  on  H.  R.  10500,  "A  bill  to  estab- 
lish a  United  States  shipping  board  for  the  purpose  of  encouraging, 
developing,  and  creating  a  naval  auxiliary  and  naval  reserve  and  a 
merchant  marine  to  meet  the  requirements  of  the  commerce  of  the 
United  States  with  its  territories  and  possessions,  and  with  foreign 
countries,  and  for  other  purposes,"  which  reads  as  follows: 

Be  it  enacted  by  the  Senate  and  Houfe  of  Repre'entative^  of  the  United  States  of  America 
in  Congresis  asyembhd,  That  a  board  is  hereby  created  and  established,  to  be  known 
as  the  United  States  shi])])iii_G;  board  (hereinafter  referred  to  as  the  board ")  with  powers 
and  duties  hereinafter  enumerated.  The  board  shall  be  composed  of  the  Serretary 
of  the  Navy  and  the  Secretary  of  C'ommerce,  as  members  ex  officio,  and  three  com- 
missioners, to  be  appointed  by  the  President,  by  and  v,\\h  the  advice  and  consent  of 
the  Senate;  one  of  such  commissioners  to  be  designated  by  the  President  as  chairman 
of  the  board  and  one  as  vice  chairman.  The  chairman  of  the  board,  subject  to  its 
supervision,  shall  be  the  active  executive  officer.  The  first  commissioners  appointed 
shall  continue  in  office  for  terms  of  two,  four,  and  six  years,  respectively,  from  the 
date  of  their  appointment,  the  term  of  each  to  be  designated  by  the  President,  but 
their  successors  shall  be  ajipointed  for  terms  of  six  years,  except  that  any  person 
chosen  to  fill  a  vacancy  shall  be  appointed  only  for  the  unexpired  term  of  the  commis- 
sioner whom  he  shall  succeed.  No  commissioner  shall  engage  in  any  other  business, 
vocation,  or  employment,  and  any  commissioner  may  be  removed  by  the  President 
for  inefficiency,  neglect  of  duty,  or  malfeasance  in  office.  A  vacancy  in  the  board 
shall  not  impair  the  right  of  the  remaining  members  to  exercise  all  of  the  powers  of 
the  board.     The  board  shall  have  an  official  seal,  which  shall  be  judicially  noticed. 

Skc.  2.  That  each  member  of  the  board,  except  the  ex  officio  membsrs,  shall  receive 
a  salary  of  S10,000  per  annum.  The  board  .shall  appaint  a  secretary,  who  shall  receive 
a  salary  of  .SS.OOO  per  annum,  and  it  shall  have  the  authority  to  employ  and  fix  the 
compensation  of  such  attorneys,  officers,  naval  ai'chitects,  clerks,  and  other  employees 
as  it  may  from  time  to  time  find  necessary  for  the  proper  performance  of  its  duties  and 
as  may  from  time  to  time  be  appropriated  for  by  the  Congress.  The  President  may 
authorize  the  detail  of  officers  of  the  military  and  naval  services  of  the  United  States 
for  such  duties  in  connection  with  the  board  as  may  be  deemed  necessary. 

With  the  exception  of  the  secretary,  a  clerk  to  each  commissioner,  the  attorneys, 
naval  architects,  and  such  special  experts  and  examiners  as  the  board  may  from  time 
to  time  find  necessary  to  employ  for  the  conduct  of  its  work,  all  employees  of  the  board 
shall  be  a  part  of  the  classified  civil  service  and  .shall  enter  the  service  of  the  board 
under  such  rules  and  regulations  as  may  be  prescribed  by  the  board  and  the  Civil 
SerWce  Commission. 

All  the  expenses  of  the  board,  including  all  necessary  expenses  for  transpartation, 
incurred  by  the  members  of  the  board  or  by  its  employees  under  its  orders,  in  making 
any  investigation,  or  upon  official  business  in  any  other  place  than  in  the  city  of  Wash- 
ington, shall  be  allowed  and  paid  on  the  presentation  of  itemized  vouchers  therefor 
approved  by  the  board. 

Until  otherwise  proA'ided  by  law  the  board  may  rent  suitable  offices  for  its  use. 

The  Auditor  for  the  State  and  Other  Departments  shall  receive  and  examine  al! 
accounts  of  expenditures  of  the  board. 

5 


6  SHIPPING  BOARD;  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Sec.  3.  That  the  United  States,  through  the  board  and  with  the  approval  of  the 
President,  is  authorized  to  construct  in  American  shipyards  and  navy  yards,  as  that 
capacity  will  permit,  or  elsewhere,  or  to  purchase  or  charter  vessels  of  a  type,  as  far  as 
the  commercial  requirements  of  the  marine  trade  of  the  United  States  may  permit 
suitable  for  use  as  naval  auxiliaries  and  Army  transports,  or  for  other  naval  and  military 
purposes,  with  a  view  to  chartering,  leasing,  or  selling  such  vessels  to  any  corporation, 
firm,  or  indi\ddual,  a  citizen  or  citizens  of  the  United  States,  desiring  to  use  them  in 
the  transportation  of  the  commerce  of  the  United  States  with  foreign  countries,  or  with 
Alaska,  the  Panama  Canal  Zone,  the  Philippine  Islands,  the  Hawaiian  Islands,  or  the 
islands  of  Porto  Rico,  Guam,  and  Tutuila,  and  for  this  purpose  the  Secretary  of  the 
Treasury,  upon  the  request  of  the  board  and  the  approval  of  the  President,  may  from 
time  to  "time  issue  and  sell  or  use  for  such  purchases,  chartering,  or  construction  any 
of  the  bonds  of  the  United  States  now  available  in  the  Treasury  of  the  United  States 
under  the  act  of  August  fifth,  nineteen  hundred  and  nine,  the  act  of  February  fourth, 
nineteen  hundred  and  ten,  and  the  act  of  March  second,  nineteen  hundred  and  eleven, 
relating  to  the  issue  of  bonds  for  the  construction  of  the  Panama  Canal,  to  a  total 
amount  not  to  exceed  $50,000,000:  Provided,  That  any  Panama  Canal  bonds  issued 
and  sold  or  used  under  the  provisions  of  this  section  may  be  made  payable  at  such  time 
after  issue  not  exceeding  fifty  years  as  the  Secretary  of  the  Treasury,  in  his  discretion, 
may  deem  advisable  and  fix,  instead  of  fifty  years  after  date  of  issue,  as  in  said  Act  of 
August  fifth,  nineteen  hundred  and  nine  prescribed:  Provided,  further ,  That  payments 
for  such  purchases,  chartering,  or  construction  from  the  proceeds  of  sales  of  bonds,  or 
delivery  of  bonds  in  payment  therefor,  shall  be  made  only  as  ordered  and  directed  by 
the  board. 

Sec.  4.  That  the  board  is  hereby  authorized  to  charter,  lease,  or  sell  the  vessels 
purchased,  chartered,  or  constructed  by  the  United  States,  as  herein  p^o^dded,  to  any 
corporation,  firm,  or  individual,  a  citizen  or  citizens  of  the  United  States,  desiring  to 
use  them  in  the  transportation  of  the  commerce  of  the  United  States  with  foreign 
countries,  or  with  Alaska,  the  Panama  Canal  Zone,  the  Philippine  Islands,  the 
Hawaiian  Islands,  or  the  islands  of  Porto  Rico,  Guam,  and  Tutuila,  upon  such  terms 
and  conditions  as  may  be  prescribed  by  the  board  and  approved  by  the  President: 
Provided,  That  vessels  constructed  in  American  shipyards  and  navy  yards,  under 
the  provisions  of  this  act,  may  be  chartered,  leased,  or  sold  to  any  such  corporation, 
firm,  or  individual,  a  citizen  or  citizens  of  the  United  States,  for  use  in  the  coastwise 
trade  of  the  United  States,  particularly  the  trade  between  the  Atlantic.  Gulf,  and 
Pacific  coasts:  And  provided  further ,  That  such  corporation,  firm,  or  individual  shall 
agree  that  any  and  all  vessels  purchased,  leased,  or  chartered  from  the  said  board  shall 
be  operated  under  American  registry  or  em'oUment  unless  otherwise  authorized  and 
approved  by  the  said  board,  and  that  no  vessel  purchased,  leased,  or  chartered  from 
the  said  board  will  be  sold,  leased,  chartered,  or  rechartered  to  any  corporation,  firm, 
or  individual  without  the  consent  and  approval  of  the  said  board :  And  provided  further , 
That  such  corporation,  firm,  or  individual  shall  agree  that  its  or  his  interest  in  any 
and  all  vessels  purchased,  leased,  or  chartered  from  the  board  may  be  taken  at  any  time 
by  the  United  States,  absolutely  or  temporarily,  and  the  vessels  used  as  transports, 
naval  auxiliaries,  cruisers,  or  for  any  other  naval  or  military  purpose,  upon  the  pay- 
ment to  the  corporation,  firm,  or  individual  interested  of  the  fair  actual  value  of  its  or 
his  interest  therein,  based  upon  normal  conditions,  if  the  vessels  are  taken  absolutely, 
or  the  reasonable  rental  value,  based  upon  normal  conditions,  if  taken  temporarily, 
such  fair  actual  value  or  reasonable  rental  value,  ae  the  case  may  be,  to  be  determined 
by  the  board  and  approved  by  the  President. 

When  vessels  purchased  or  constructed  by  the  board  as  herein  provided,  and  owned 
by  the  United  States,  become  in  the  opinion  of  the  board  unfit  for  the  purposes  for 
which  purchased  or  cnistructed,  the  same  shall  be  appraised  and  sold,  either  by 
sealed  proposals  for  the  purchase  of  the  same  or  by  public  auctii">n  after  advertisement 
of  the  sale  for  such  time  as  in  the  judgment  of  the  board  the  public  interests  require, 
the  pror-eeds  of  such  sales,  after  ])ayment  therefrom  of  the  expenses  thereof,  to  be 
covered  into  the  Treasury  of  the  United  States. 

Sec.  5.  That  tlie  President  of  the  United  States  is  hereby  authorized  to  transfer 
to  the  board  such  naval  auxiliaries  belonging  to  the  Naval  Establishment  of  the 
United  States  as  are  suitable  for  commercial  uses,  and  which  are  not  required  for  use 
in  the  Navy  in  time  of  peace,  and  Aessels  belonging  to  the  War  Department  suitable 
for  commercial  uses  and  not  required  for  military  transports  in  time  of  peace,  and  to 
cause  to  be  transferred  to  the  board  vessels  now  owned  and  operated  by  the  Panama 
Railroad  Company,  and  not  required  in  the  business  of  such  company,  and  the  board, 
subject  to  the  approval  of  the  President,  is  hereby  authorized  to  charter,  lease,  or  sell 
such  vessels  to  any  corporation,  firm,  or  individual,  a  citizen  or  citizens  of  the  United. 
States,  desiring  to  use  them  in  the  coastwise  trade  of  the  United  States,  particularly 


SHIPPING  BOAUD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.  7 

the  trade  between  the  Atlantic,  GuU',  ^an<l  Pacific  coasts,  or  in  the  transportation  of 
the  commerce  of  the  United  States  with  foreign  countries,  or  with  Alaska,  the  Panama 
Canal  Zone,  the  Philippine  Islands,  the  Hawaiian  Islands,  or  the  islands  of  Porto 
Rico,  Guam,  and  Tutuila,  upon  such  terms  and  conditions  as  the  board,  with  the 
approval  of  the  President  rf  the  United  States,  shall  perscribe:  Provided,  That  such 
Corporation,  firm,  or  individual  shall  agree  that  any  and  all  vessels  purchased,  leased, 
or  chartered  from  the  said  board  shall  be  operated  under  American  registry  or  enroll- 
ment, unless  otherwise  authorized  and  approved  by  the  board,  and  that  no  vessel 
purchased,  leased,  or  chartered  from  the  said  board  will  be  sold,  leased,  chartered, 
or  rechartered  to  any  corporation,  firm,  or  indiAddual  without  the  consent  and  approval 
of  the  said  board:  And  -provided  further,  That  such  corporation,  firm,  or  individual 
shall  agree  that  its  or  his  interest  in  any  and  all  vessels  purchased,  leased,  or  chartered 
from  tiae  said  board  may  be  taken  at  any  time  by  the  United  States,  absolutely  or 
temporarily,  and  the  vessels  used  as  transports,  naval  auxiliaries,  cruisers,  or  for  any- 
other  naval  or  military  purpose,  upon  the  x^aynient  to  the  corporation,  firm,  or  indi- 
vidual interested  of  the  fair  actual  A^alue  of  its  or  his  interest  therein,  based  upon 
normal  conditions,  if  the  vessels  are  taken  absolutely,  or  the  reasonable  rental  value, 
based  upon  normal  conditions,  if  taken  temporarily,  such  fair  actual  value  or  rea-^on- 
able  rental  value,  as  the  case  may  be,  to  be  determined  by  the  board  and  approved 
by  the  President. 

Sec.  6.  That  all  vessels  purchased,  chartered,  or  leaded  from  the  board,  as  herein 
provided,  shall  be  registered  or  enrolled  under  the  laws  of  the  United  States  as  vessels 
of  the  United  States  and  entitled  to  the  benefits  and  pri\'ileges  appertaining  to  ves- 
sels of  the  United  States,  and  shall,  when  and  while  employed  solely  as  merchant 
vessels,  be  in  all  respects  subject  to  all  laws,  regulations,  and  liabilities  governing 
merchant  vessels,  whether  the  United  States  be  interested  therein  as  owner,  in  whole  or 
in  part,  or  shall  have  or  hold  any  mortgage,  lien,  or  other  interest  therein,  and  hereafter 
no  vessel  registered  or  em-oUed  under  the  laws  of  the  United  States  shall  be  sold  to 
any  person,  firm,  or  corporation  other  than  a  citizen  of  the  United  States,  or  trans- 
ferred to  any  foreign  registry  without  the  app-oval  and  consent  of  the  said  board, 
and  in  the  event  that  any  vessel  is  sold  or  transferred  except  as  herein  provided, 
such  vessel  shall  thereafter  V)e  refused  clearance  from  any  and  all  American  pjrts, 
and  the  vendor  or  transferor  of  such  vessel  shall  be  deemed  guilty  of  a  misdemeanor 
and  shall  be  subject  to  imprisonment  for  not  less  than  one  nor  more  than  five  years 
or  to  the  payment  of  a  fine  of  not  less  than  S1,0')0  and  not  more  than  S5,000,  or  both. 

Sec  7.  That  the  President  of  the  Ignited  States,  up  m  giving  to  the  corporation, 
firm,  or  individual  inteiested  such  reasonable  notice  in  writing  as  in  his  judgment 
the  circumstances  will  permit,  may  take  possession,  absolutely  or  temporarily,  for 
use  as  transports,  naval  auxiliaries,  cruisers,  or  for  any  other  naval  or  military  purpose, 
of  any  vessel  or  vessels  purchased,  leased,  or  chartered  from  the  board,  and  said 
corpiration,  firm,  or  indi\^dual  shall  be  entitled  to  a  reasonable  p  ice  or  rental  therefor, 
based  upon  normal  conditions,  to  be  determined  by  the  board  and  approved  by  the 
President:  Proridid,  That  if  in  the  judgment  of  the  President  an  emergency  exists 
requiring  such  action,  he  may  take  possession  of  any  such  vessel  or  vessels  without 
notice. 

Sec.  8.  That  the  board  hereby  created,  if  in  its  judgment  such  action  is  necessary- 
to  carry  out  the  purposes  of  this  act,  may  form  under  the  laws  of  tl  e  United  States, 
or  of  the  District  of  Columbia,  a  corporation  or  corporations  with  capital  stock  in  such 
amount  as  the  board  may  prescribe,  such  capital  stock,  however,  to  be  within  the 
limits  of  the  appropriations  made  by  this  act,  whose  object  shall  be  the  prrchase, 
construction,  equipment,  maintenance,  and  operation  of  mere',  ant  vessels  in  the  com- 
merce of  the  United  States  and  with  foreign  countries  and  with  Alaska,  the  Panama 
Canal  Zone,  the  Puilippine  Islands,  the  Hawaiian  Islands,  or  the  islands  of  Porto 
Rico,  Guam,  and  Tutuila,  and  tiie  chartering  or  leasing  of  vessels  for  such  purposes; 
and  for  and  on  behalf  of  the  United  States,  may  subscribe  to  and  purchase  not  less  than 
a  majority  of  the  capital  stock  of  such  corporation  or  corporations,  and  shall  have  the 
authority  to  vote  the  stock  of  the  United  States  owned  in  such  corporation  or  corpora- 
tions, and  also  to  do  all  other  things  in  regard  tliereto  as  may  be  necessary  to  protect 
the  interests  of  the  United  States  and  to  carry  out  the  purposes  of  this  act  and  the 
board,  with  the  approval  of  the  President,  may  at  any  time  sell  the  stock  of  such  cor- 
poration or  corporations  owned  by  the  United  States. 

Sec.  9.  That  the  board  hereby  created  shall  have  the  power  and  authority  to  regu- 
late the  operation  of  all  corporations,  firms,  or  individuals  engaged  as  common  carriers 
in  the  transportation  of  passengers  and  property  by  water  between  the  ports  of  the 
United  States,  and  not  entirely  within  the  limits  of  a  single  State,  and  between  the 
United  States  and  foreign  countries,  and  between  the  United  States  and  its  territories 
and  possessiong,  and  between  the  territories  and  possessions  of  the  United  States,  and 


8  SHlPPlKCi  BOAIIl),.  NAVAI,  AITXII.IAEY,  AND  MERCHANT  MARINE. 

to  determine  and  prescribe  just  and  reasonable  rates  or  charo:es  to  be  demanded  or 
collected  for  the  transportation  of  passengers  and  property  in  such  trade,  and  just, 
fair,  and  reasonable  classifications,  regulations,  or  practices  to  be  followed  with  regard 
thereto:  Provided,  however.  That  the  board  may  prescribe  preferential  rates  co\ering 
the  transportation  aforesaid,  if,  iu  its  judgment,  such  rates  are  necessary  in  order 
effectually  to  carry  out  the  purposes  of  this  act.  And  when  property  may  be  and  is 
transported  by  common  carriers  from  a  point  within  the  United  States  to  foreign 
countries  or  to  or  from  the  territories  or  possessions  of  the  United  Slates,  the  carriage 
being  by  a  railroad  or  railroads  or  other  means  of  transportation,  within  the  United 
States,  and  a  vessel  or  vessels  operating  under  American  registry  or  enrollment,  the 
board  is  hereby  authorized  to  determine  and  prescribe  through  routes  between  and 
over  such  rail  and  water  lines,  and  just  and  reasonable  joint  rates  or  charges  to  be 
demanded  and  collected  for  the  transportation  of  property  over  such  routes,  and  to 
determine  and  prescribe  just,  fair,  and  reasonable  classifications,  regulations,  or 
practices  to  bo  adopted  and  followed  in  regard  to  such  traffic,  including  the  issuance 
and  form  of  through  bills  of  lading  and  permits  for  shipments  for  specific  sailings, 
which  shipments  are  hereby  expressly  authorized:  Provided,  hoxrever,  That  the  board 
may  prescribe  preferential  rates  covering  the  transportation  aforesaid,  if,  in  its  judg- 
ment, such  rates  are  necessary  in  order  effectually  to  carry  out  the  purposes  of  this  act. 
And  whenever  the  carriers  between  and  over  whose  lines  joint  routes  have  been 
established  and  prescribed,  as  aforesaid,  shall  fail  to  agree  among  themselves  upon  the 
apportionment  or  division  of  the  joint  rate  prescribed  by  the  board,  as  aforesaid,  the 
board  may,  after  a  hearing  prescribe  the  just  and  reasonable  proportion  of  such  joint 
rate  to  be  received  by  each  carrier  party  thereto,  provided  that  in  determining  the 
just  and  reasonable  proportion  of  such  joint  rate  to  be  received  by  any  railroad  com- 
pany or  companies  the  board  shall  act  in  conjunction  with  the  Interstate  Commerce 
Commission  with  regard  thereto  and  the  prior  publication  of  such  rates  as  provided 
by  the  interstate  commerce  act  shall  not  be  required. 

The  board  shall  also  have  power  and  authority  to  make  diligent  investigations  into 
the  navigation  laws  of  the  United  States  and  into  the  organization,  conduct,  and  man- 
agement of  the  business  of  all  corporations,  firms,  or  individuals  engaged  as  common 
carriers  in  the  marine  transportation  aforesaid,  and  to  gather  and  re])ort  to  the  Presi- 
dent of  the  United  States  such  information  and  data  as  will  enable  him  to  recommend  to 
the  Congress  legislation  for  the  regulation  of  such  commerce  and  for  ihe  promotion  and 
development  of  the  American  merchant  marine. 

In  order  to  accomplish  the  purposes  declared  in  the  foregoing  provisions  of  this 
section,  the  ])rovisions  of  the  Act  to  regulate  commerce,  approved  February  fourth, 
eighteen  hundred  and  eighty-seven,  and  all  Ads  amendatory  thereof  and  supple- 
mentary thereto,  are  hereby  extended  to  include  common  carriers  engaged  in  the 
transrortation  of  passengers  and  property  by  water  between  the  ports  of  the  United^ 
States,  and  not  entirely  within  the  limits  of  a  single  State,  and  between  the  United 
States  and  foreign  countries,  and  between  the  United  States  and  its  Territories  and 
possessions,  and  between  the  Territories  and  possessions  of  the  United  States,  so  far  as 
applicable,  except  that  in  respect  to  such  common  carriers  the  board  hereby  created 
shall  be  substituted  in  lieu  of  the  Interstate  Commerce  Commission  mentioned  therein. 

Sec.  10.  That  on  and  after  January  first,  nineteen  hundred  and  S3Venteen,  no  cor- 
poration, firm,  or  individual  shall  engage  in  the  business  of  transporting  passengers  or 
fjroperty  by  water  between  the  ports  of  the  United  States  and  not  entirely  within  the 
limits  of  a  single  State,  or  between  the  United  States  and  foreign  countries,  or  between 
the  United  States  and  its  territories  and  possessions,  or  between  the  territories  and 
possessions  of  the  United  States  without  first  obtaining  a  license  so  to  do  from  the  board 
hereby  created,  and  the  collector  of  customs  or  other  officer  of  customs  is  hereby 
authorized  and  directed  to  refuse  clearance  to  any  vessel  unless  the  corporation, 
firm,  or  individual  owning  or  operating  the  same  is  a  holder  of  such  license.  The  said 
board  is  hereby  authorized  and  directed  to  promulgate  and  establish  from  time  to 
time  such  rules  and  regulations,  to  be  obsarved  by  all  corporations,  firms,  or  individuals 
engaged  in  the  business  aforesaid,  as  may  in  its  judgment  be  necessary  to  secure  a  full 
and  complete  compliance  with  the  above  provision  and  to  carry  out  in  the  most  effect- 
ive manner  the  provisions  of  this  act,  and  is  also  authorized  and  directed  to  revoke 
licenses  theretofore  granted  when  satisfied  that  the  rules  and  regulations  promulgated 
as  aforesaid  are  not  being  observed  or  the  provisions  of  this  act  are  not  being  complied 
with:_  Provided,  That  the  authority  hereby  granted  shall  not  be  construed  to  affect 
existing  laws  in  regard  to  vessels  or  the  authority  conferred  by  such  laws  upon  any 
officer  or  officers  or  department  or  division  of  the  Government  to  promulgate  and 
establish  rules  and  regulations  relating  thereto. 

Sec.  11.  That  any  vessel  operated  under  this  act  may  be  listed  as  a  vessel  of  the 
United  States  naval  auxiliarv  reserve,  and  such  of  the  ofiicers  and  crews  of  such  vessels 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.  9 

as  may  volunte?r  for  the  purpose  may  be  enrolled  as  meml^ers  of  such  reserve  in  various 
ranks  and  ratings  corresponding  to  those  of  the  United  States  Nav>'  not  above  the  rank 
of  lieutenant  commander,  provided  they  are  citizens  of  the  United  States,  under  such 
regulations  as  may  be  prescribed  by  the  Secretaiy  of  the  Navy  with  the  approval  of 
the  board.  All  persons  thus  enrolled  in  the  said  reserve  shall  be  entitled  to  receive 
retainer  allowances  from  the  United  States  while  so  enrolled,  at  rates  to  be  fixed  by  the 
board,  not  to  exceed  an  allowance  of  $5  per  month  for  enlisted  men,  $10  per  month  for 
petty  officers,  $12  per  month  for  warrant  officers,  and  $15  per  month  for  officers. 

Sec.  12.  The  board  shall,  on  or  before  the  first  day  of  December  in  each  year,  make 
a  report,  which  shall  be  transmitted  to  the  Congress,  and  copies  of  which  shall  be  dis- 
tributed as  are  the  other  reports  transmitted  to  the  C  ongress.  This  report  shall  contain  a 
record  of  all  transactions  of  th<>  board  and  of  all  expenditures  and  r<  ceipts  under  this  act, 
and  of  the  operations  of  any  corporation  or  corporations  in  which  the  United  States  may 
have  become  a  stockholder,  and  the  names  and  compensation  of  all  persons  employed 
by  said  board. 

Sec.  13.  That  for  the  purpose  of  carr\'ing  out  the  provisions  of  this  act,  there  is 
hereby  appropriated  out  of  any  money  in  the  Treasury  of  the  United  States  not  other- 
wise appropriated,  the  sum  of  |50,000'000,  and  the  Secretary'  of  the  Treasury  may  issue 
and  sell  so  many  of  the  Panama  (  anal  lionds  authorized  to  be  issued  and  sold  by  section 
thre?.  and  on  the  same  terms,  as  may  be  neccssay  to  secure  the  amount  of  $50,000,000, 
and  set  apart  and  us<'  the  proceeds  thereof  for  such  purpose. 

Sec.  14.  That  all  acts  and  parts  of  acts  in  conflict  with  the  provisions  of  this  act  are 
hereby  repealed. 

Tlie  hearing  has  been  sot  down  for  this  morning,  and  will  continue 
from  time  to  time  as  maj'  be  necessary,  to  give  those  interested  in 
this  legislation  an  opportimity  to  be  heard. 

We  have  with  us  Mr.  William  H.  Douglas,  of  New  York,  chairman 
of  the  special  committee  on  merchant  marine  of  the  Chamber  of 
Commerce  of  the  United  States.  I  have  invited  him  to  be  present, 
and,  as  he  has  many  engagements,  I  have  suggested  that  we  would 
be  pleased  to  afford  him  an  opportmiity  at  this  time  to  be  heard  with 
reference  to  tlie  bill.  I  take  pleasure  in  introducing  to  you  Mr. 
Douglas. 

STATEMENT  OF  MR.  WILLIAM  H.  DOUGLAS. 

Mr.  Douglas.  Mr.  Chairman,  I  appreciate  the  com'tesy  of  the  Sec- 
retary of  Commerce,  and  also  of  the  Secretary  of  the  Treasury,  in 
allowing  me  to  speak  first. 

I  would  like  to  preface  my  remarks  by  the  statement  that  I  have 
no  authority  from  the  board  here;  that  is,  from  the  chamber  of  com- 
merce, to  make  any  statement,  but,  of  com^se,  our  records  are  official 
and  have  been  published,  and  therefore  I  will  confine  myself  strictly 
to  the  official  records  of  the  chamber  of  commerce  in  connection  with 
this  matter.  I  wouJd  state  that  we  took  the  matter  up  last  year, 
and  very  thorouglily  went  into  it,  and  we  made  a  report  at  the  annual 
meeting,  which  took  place  in  February,  1915.  We  then  sent  out  a 
referendmn,  which  is  lanly  well  known  to  all  the  gentlemen  present, 
and  therefore  I  do  not  thmk  it  is  necessary  to  go  over  that  referendum 
in  its  entirety  or  to  any  extent.  I  will  simply  state  that  we  did  not 
favor  the  purchase  or  construction  and  operation  of  vessels  by  the 
United  States  Government,  as  a  vote  on  the  referendum.  We  then 
voted  on  whether,  in  case  the  Government  should  lease  these  vessels, 
and  not  operate  them  as  a  Government  operation,  the  coimtry  would 
favor  that  or  not,  and  the  vote  again  was  adverse  to  any  such  action 
by  the  Government. 

We  then  requested  the  constituent  bodies  of  the  chamber  to  signify 
their  approval  or  disapproval  on  the  question  of  subventions  and 
subsidies,  as  that  was  a  protection  feature  in  connection  with  the 


10         SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

merchant  marine,  and  they  voted  largely  in  favor  of  subventions  to 
create  the  mail  and  freight  lines,  which  we  all  acknowledge  we  desire. 

We  then  asked  if  it  would  be  desirable  to  consider  the  question  of 
subsidies  to  offset  the  cost  of  operation  between  sailmg  imder  the 
American  flag  and  under  foreign  flags,  which,  of  course,  has  been  a 
much-discussed  proposition,  and  again  the  vote  by  the  constituent 
bodies  of  the  chamber  was  in  favor  of  that  proposition. 

We  asked  various  questions  with  reference,  fii-st,  to  the  creation  of 
a  Federal  sliipping  board,  which,  in  our  judgment,  should  be  a  non- 
partisan board;  that  is,  we  did  not  favor  having  the  officials  of  the 
Government  a  party  to  that  board,  in  ex  officio  positions,  and  the 
idea  of  the  committee  was  sustained  by  leferendum  by  the  constitu- 
ent bodies  in  that  paiticidar. 

We  then  asked  about  a  marine  development  company,  mth  a  view 
to  the  loan  of  money  to  help  the  merchants  in  this  country  to  biiild 
the  steamers  necessary  for  our  commerce,  but  we  did  not  receive  a 
two-thirds  vote,  and,  therefore  the  chamber  is  not  in  any  way  com- 
mitted to  any  such  proposition,  and  have  not  advocated  it  since  that 
time. 

The  Chairman.  Did  I  understand  that  the  chamber,  by  a  two- 
tbirds  vote,  decided  against  Government  o-svnersbip  and  operation  of 
vessels  ? 

Mr.  Douglas.  They  decided  that  by  a  vote  of  690  opposed,  to 
89  in  favor. 

The  Chairman.  And  on  the  question  of  subsidies,  how  did  they 
vote  ? 

Mr.  Douglas.  The  question  of  subsidy  was  713  in  favor  and  52 
opposed. 

Mr.  Curry.  How  did  they  vote  on  a  Government  loan  ? 

Mr.  Douglas.  On  a  Government  loan,  the  vote  was  416  in  favor, 
and  314  opposed.  Not  being  two-thirds,  of  course  the  chamber  at 
once  ceased  any  activity  along  those  fines. 

Mr.  Byrnes.  Did  I  understand  you  to  say,  too,  that  you  had  voted 
upon  the  question  of  whether  or  not  a  member  of  the  Cabinet  should 
be  a  member  of  ttiis  board  ex  officio  ? 

5klr.  Douglas.  That  is  in  our  report,  and  the  recommendation  is 
that  we  consider  it  would  be  wiser,  in  the  judgment  of  the  constituent 
bodies  of  the  chamber — of  course  I  am  speaking  entirely  on  the 
referendum,  which  was  in  favor  of  a  nonpartisan  board — not  to  have 
them  on  the  board. 

The  committee  then  asked  whether  they  would  advise  that  the 
ocean  mail  law  of  1891  shoulfi  be  amended,  lowering  the  speed  of  the 
first-class  steamers  from  26  to  16  knots  and  the  second-class  steamers 
from  16  to  12  knots  and  allowing  a  board,  if  estabfisheel,  to  grant  such 
compensation  as,  in  their  judgment,  would  be  desirable,  so  as  to 
create  these  foreign  lines,  and  the  vote  on  that  proposition  was  692 
in  favor  and  58  opposed.  We  favored  the  board  having  real  direct 
authority  to  establish  lines  by  subventions,  but  this  question  also 
was  asked,  because  we  thought  it  had  a  great  bearing,  as  many 
gentlemen,  we  understood,  both  in  Congress  and,  of  course,  many  out 
of  Congress,  perhaps  thought  that  the  amendment  of  the  1891  act 
was  a  desirable  thing  to  do ;  in  fact  at  various  times  bills  have  been 
introduced  to  have  that  carried  out,  but  I  think  they  have  always 
been  defeated.     The  committee  recommended — and  in  that  particu- 


SHIPPING  BOARD,  NAVAL  AUXILIAKY,  AND  MERCHANT  MARINE.         11 

lar  I  think  we  iully  concur  with  Mr.  Alexander's  committee  and  you 
gentlemen — that  legislation  thould  be  adopted  with  a  view  to  the 
abolishment  of  deferred  rebates,  supervision  of  rates,  and  regulations 
for  filing  rates  and  agreements  among  oversea  lines.  There  were  601 
votes  in  favor,  as  against  130  opposed.  I  will  call  attention,  however^ 
to  the  fact  that  in  our  report  and  in  the  vote  we  used  the  word  "super- 
vision" as  against  "regulation."  I  do  not  know  that  there  is  any 
difference  between  those  two  words,  but,  judging  from  the  popular 
impression,  the  one  is  rather  more  strong  than  the  other,  but  perhaps 
"regulation"  is  required  bv  reason  of  the  law  in  any  bill. 

Wo  believe  that  logulation  should  bo  adopted.  Wo  do  not  want 
drastic  legislation  that  is  going  to  interfere  in  any  way  with  shipping 
moasuios  or  shipping  companies  or  the  proper  regulation,  by  those 
who  may  run  linos,  of  our  shipping;  but  wo  do  tliink  that  a  board 
should  have  the  same  rights  of  supcn-vision  which,  under  the  railroad 
system,  is  now  working  quite  successfully  in  this  country;  that  is,  if 
shippers  fool  that  thoy  are  in  any  way  injured  by  the  rates  or  by 
anything  else  which  a  company  which  is  running  rcgidar  lines^ 
carries  out  as  a  policv,  that  tlioy  should  have  the  right  to  go  to  the 
board  and  domr.nd  a  htir  and  proper  hearing. 

Wo  presume  the  board  naturally  also  would  grant  a  hearing  to  the 
shipping  company  rnd  then,  in  their  good  judgment,  thoy  would 
d(>(ido  as  to  who  was  justified  and  regulate  the  rate — and  thoy  should 
have  tlio  power  to  do  so,  of  course — if,  in  their  judgment,  the  rate 
wore  not  what  it  sliould  bo.  I  want  to  make  that  distinct,  simply 
because  we  did  use  the  word  "supervision,"  and  I  want  to  look  out 
that  I  do  not  transgress  in  any  way  beyond  my  referendum,  because^ 
as  I  said,  I  have  no  authority  to  come  here;  so  to  that  extent  only 
do  we  differ,  although  pcrsonall}'  I  am  inclined  to  think  that  the 
word  "regulation"  is  a  fair  and  ])ropcr  word,  because  "supervision" 
might  not  give  them  enough  authority. 

The  Chairman.  The  Interstate  Commerce  Commission  was  created 
a  great  many  yeais  ago,  and  it  had  the  power  of  supervision,  but  it 
was  only  within  the  last  decade  tliat  it  was  given  the  power  to 
"regulate,"  and  it  is  only  within  the  last  decade  that  thoy  have  had 
real  power  over  the  railroads  in  the  matter  of  transportation  rates. 
Now,  if  you  will  study  this  bill  you  \vill  find  that  the  power  is  vested 
in  this  board  to  regulate.  It  does  not  say  that  they  shall  do  it,  but 
that  they  shall  supervise,  and,  whenever  it  is  necessary,  they  shall 
have  power  to  stoj)  in  and  compel  the  observance  of  reasonable 
regulations. 

Air.  Douglas.  PorsomiUy,  Judge,  I  take  no  exception  to  your 
position;  but  I  felt  that  it  was  necessar}',  by  reason  of  the  refer- 
endum word,  suuplj"  to  make  that  clear. 

The  committee  then  took  up  the  question  of  Federal  license,  and 
we  asked  the  people  their  opinion,  and  the  chambers  of  commerce 
throughout  the  country  wore  in  favor  of  having  that  as  an  established 
feature  in  any  bill  which  might  bo  ])assed;  and  I  am  pleased  to  say, 
because  I  am  thorouglily  hi  accord,  that  there  were  610  votes  in 
favor  of  that  to  120  votes  op])osed,  which  is  a  decided  and  pro- 
nounced majority. 

The  question  of  regulation,  as  voted  upon  by  us,  covered  lines  which 
were  run  under  the  American  flag  to  foreign  lands,  and  also  lines  which 
would  be  run  by  foreign  corporations.     We  made  that  a  very  em- 


12         SHIPPING  BOARD,  NAVAL  AUXILIARY,  AXD  MERCHANT  MARINE. 

phatic  statement  and  plain  point,  because  I  feel  it  would  not  be 
justificable  or  right,  nor  do  I  assume  for  a  moment,  although  I  have 
endeavored  to  get  enlightenment  on  that  subject,  l)ut  have  not  suc- 
ceeded, as  to  what  the  present  bill  intends  to  do  in  that  particular— I 
think  that  foreign  lines  need  a  license  to  be  taken  out  far  more  than 
American  lines  do;  that  is,  that  you  can  not  discrkninate.  If  you 
are  going  to  put  a  license  on  an  American  line — and  I  am  in  favor  of 
douig  so  in  a  proper  way,  with  proper  regulations,  which  the  board, 
of  course,  will  have  authority  to  promulgate— I  feel  that  it  would  be 
almost  a  slap  at  American  shipping  if  we  did  not  include  that,  and 
also  incorporate  a  license  feature  for  all  foreign  vessels  that  run  a 
regular  line.  I  hold  and  contend  this  ])oint:  ^yhere  a  foreign  line 
comes  here  and  establishes  a  home  and  becomes  a  regular  part  of 
our  system  of  Government,  where  they  are  practically  the  same  as 
ourselves  and  run  regular  lines,  establishing  their  offices  and  ])rac- 
tically  making  themselves  a  part  of  our  shi])])ing.  even  though  they 
fly  a  foreign  flag  on  tlieir  vessels,  that  in  that  cnse  we  are  perfectly 
justified  m  feeling  that  the  American  pu])lic  shoifld  have  some  justi- 
fication and  some  rights,  and  that  we  should  not  l)e  under  the  burden 
which  we  have  been  for  25  years  and  over  of  hci^ing  to  submit  to  a 
great  many  irregiflarities  and  a  great  many,  you  might  say,  perse- 
cutions whi(  h  are  not  justified,  by  reason  of  the  fact  that  those  men 
are  here  enjoying  our  ])rotecti(>n  and  enjoying  the  jirotection  of  the 
American  flag,  even  though  their  vessels  on  the  ocean  tlo  not  fly  the 
American  flag. 

The  Chairman.  I  will  say  to  the  gentleman  at  this  point  that  sec- 
tion 10  of  this  bill  says  that^n  and  after  January  1,  1917,  no  corpora- 
tion, firm,  or  individual  shall  engage  in  the  business  of  transporting 
passengers  or  property  by  water  between  the  ports  of  the  United 
States  and  not  entirely  within  the  limits  of  a  single  State,  or  between 
the  United  States  and  foreign  countries,  or  between  the  United  States 
and  its  teri'itories  and  possessions,  or  between  the  teiTitories  and  pos- 
sessions of  the  United  States  without  fii-st  obtaining  a  license  so  to  do 
from  the  board  hereby  created.  That  section  applies  to  foreign  as 
well  as  domestic  vessels;  but  if  there  is  any  question  about  it,  we 
would  amend  it  by  saying  that  on  and  after  January  1,  1917,  no  cor- 
poration, firm,  or  individual,  domestic  or  foreign  ^because  it  is  in- 
tended to  apply  to  foreign  vessels  as  weD  as  to  American  vessels. 

'Mr.  Douglas.  I  do  not  question.  Judge,  that  that  was  your  inten- 
tion; but  I  felt,  in  view  of  the  fact  that  I  asked  vou  that  question  by 
letter  twice,  we  had  better  emphasize  it  and  make  quite  certain  that 
that  was  your  intention  under  the  bill,  so  there  could  not  be  any 
doubt  on  that  point. 

Mr.  Byrnes.  Coidd  you  make  the  language  any  clearer  than  that  ? 

5^Ir.  Douglas.  I  thiiik  I  coidd.  I  think  it  should  say  that  all  cor- 
porations o^^'ned  and  operated  b}^  United  States  citizens  or  corpora- 
tions, and  all  lines  operated  by  foreign  agencies,  or  where  the  line  was 
owned  by  foreigners,  shoidd  equally  become  a  party  to  the  license. 

Mr.  Byrnes.  Do  you  think  that  would  be  any  stronger  than  this 
language,  which  says  that  no  boat  shall  clear  for  a  foreign  port 

^Ii'.  Douglas.  I  think  you  should  always  state  just  what  you  mean. 

The  Chairman.  There  is  no  question  about  that.  We  will  make 
that  plain,  because  we  agree  thoroughly. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         13 

Mr.  Douglas.  I  am  glad  to  hear  j^ou  say  so.  Tho  question  has 
been  raised  as  to  these  Ucenses  on  the  point  of  whether  a  tramp 
steamer  coming  here  from  any  port  of  the  world,  with  no  intention  to 
enjoy  our  hospitality  for  more  than,  perhaps,  a  few  days,  \vithin 
wliich  to  discharge  her  cargo,  and,  perhaps,  take  on  other  cargo  here 
or  go  away  in  ballast,  was  subject  to  this  license,  and  I  liave  not  known 
how  to  answer  that  ([uestion.  I  have  stated  that,  in  my  o])inion,  you 
did  not  intend  that  a  tramp  steamer,  merely  coming  here  in  that  way, 
that  might  not  be  here  again  for  many  years,  was  to  take  out  a 
license. 

The  CiLviUMAN.  Of  course,  one  benefit  that  will  come  from  these 
hearings  will  be  to  bring  out  all  these  exceptional  cases,  because  in 
drafting  a  ])ill  it  is  not  always  possible  to  have  everything  in  mind 
that  we  might  have. 

Mr.  Douglas.  I  wanted  to  bring  that  out,  because  there  is  a  wide 
distinction  l^etween  the  two,  and  1  hope  the  committee  will  kindly 
give  tliat  consideration. 

The  Chairman.  Yes;  I  think  tliat  is  worthy  of  consideration. 

Mr.  Douglas.  Those  are  the  main  features,  and  I  am  glad  to  be 
able  to  say  that  wliile  we  do  not  accord  entirely  with  the  learned 
gentlemen  around  this  board  with  reference  to  tliese  matters,  yet  to 
quite  a  considerable  extent  we  feel  that  we  are  in  sympatiiy  with  them 
in  our  report.  The  main  tiling  in  which  we  are  not  in  sympathy,  of 
course,  is  the*  cj^uestion  t)f  how  we  are  going  to  establish  these  lines  and 
how  we  are  going  to  put  the  American  commerce  on  the  ocean.  We 
are  all  liable  to  mistake,  and  we  all  get  hobbies,  and  naturally  we 
enjoy  tlie  privilege  (^f  speaking  for  our  hobby;  and  the  hobby  of  the 
chamber  of  commerce.  I  might  say,  seems  to  be  clearly  tliat  it  is  a 
cheaper,  more  expetlient,  and  an  easier  way  to  accomplish  the  putting 
on  oi  these  lines  by  a  direct  sulivention,  or  by  amending  the  law  ot 
1891,  than  it  is  to  eiuh'avor  to  start  those  lines  in  the  way  that  you 
gentlemen  propose.  We  all  r»'alize  that  whether  we  start  tlu'se  lines 
or  do  not  start  tiiese  lines  to  foreign  countries,  there  must  be,  besides 
that,  a  large  amount  of  commerce  which  can  not  go  on  those  lines 
and  for  which  it  is  necessary  to  provide  accommodation,  if  we  are 
going  to  take  tlie  standard  of  commercial  world  power,  which  we  all 
hope  we  will,  and  I  h()])e  the  board  intend  in  this  ])ill  which  they 
finally  may  pass  to  consider  that  thing  verv  carefully,  because  the  bill 
does  not  cover  that  point  under  any  possibility  of  conception. 

Now,  let  us  see  what  we  would  secure  under  this  ])ill.  The  entire 
amount  of  money  provided  for  in  the  bill  is  S50,000,000;  that 
is  all  that  is  appropriated.  It  is,  of  course,  in  doubt,  but  so  far  as 
our  judgment  would  go,  as  a  committee  we  did  not  feel  that  under 
that  bill  you  could  secure  more  than  perhaps  GO  vessels  of  the 
right  ty{)e,  standard,  aiul  size  to  go  on,  you  miglit  say,  d(H^p-sea 
business.  To-day  we  have  only  about  1,700,000  or  1,500,000  gross 
tons  of  sliipping  engaged  in  the  deep-sea  business,  and  of  that  sliip- 
pin^  there  is  a  very  considerable  portion  which  pertains  entirely  and 
solely,  you  might  say,  to  special  instrumentahties  of  transportation — 
vessels  which  are  built  for  a  specific  purpose,  and  which,  of  course, 
are  used  for  that  purpose,  but  they  do  not  go  under  berth  and  do  not 
carry  general  car^o,  and,  consequenth^,  are  of  ver}^  little  use  except 
to  those  who  build  them  for  special  purposes.  We  might  refer,  for 
example,  to  a  tank  steamer  built  and  owned  by  the  Standard  Oil 
32910—16 2 


14         SHIPPING  BOARD^  NAVAL  ATJXILIAEY,  AND  MERCIIANT  MARINE. 

Co.  This  country  needs  to-day,  iindoiibtedly,  for  any  kind  of 
reasonable  protection  at  least  eight  to  ton  million  gross  tons  of 
shipping,  and  I  understand,  as  does  perhaps  everybody  here,  that  we 
can  not  acquire  that  shipping  except  by,  you  might  say,  a  gradual 
process  covering  a  number  of  years,  and  that  to-day,  under  the  war 
conditions  which  exist,  our  yards  are  full  of  work  and  the  yards 
abroad  are  full  of  work,  and  we  are  unable,  by  reason  of  the  restric- 
tions put  upon  it  by  foreign  countries,  to  buy  vessels  abroad.  These 
are  very,  very  serious  problems,  and  I  sincerely  hope  the  committee — 
because  I  do  not  believe  the  public  will  condemn  any  action  of  this 
committee;  in  fact,  I  think  tliey  will  uphold  it  most  heartily — will 
give  any  man  in  this  country,  no  matter  what  part  he  may  live  in, 
who  desires  to  acquire  a  few  ships  of  his  own  an  opportunity  to  have 
them  built,  so  that  he  can  overcome,  in  some  measure,  the  difference 
in  cost  of  operation  of  the  American  ship  under  our  laws — and  I 
understand  and  realize  that  we  can  not  change  all  our  laws  to  meet 
the  ideas  of  the  whole  public;  there  always  will  be  that  difference 
in  cost,  by  reason  of  the  difference  between  our  system  and  European 
systems,  but  I  want  to  appeal  to  this  committee  most  urgently  to 
give  that  feature  careful  thought.  I  believe  that  you  should  give 
the  board  something  to  do,  something  to  work  on  for  the  benefit  of 
this  country,  and  say  to  them,  practically,  ''We  will  allow  any  man 
who  will  come  to  the  board,  and  who  wishes  to  build  a  ship  for  the 
good  of  American  commerce,  if  he  will  present  his  plans,  and  if  he 
wiU  build  his  ship  along  lines  which  will  commend  the  board's  ap- 
proval, which  will  be  useful  for  commercial  purposes  and  useful  in  case 
of  war  or  for  any  other  requirement  of  the  Government — we  will 
meet  him  fairly,  if  he  will  meet  our  views  as  to  his  ship,  and  wa  will 
pay  him  in  some  way."  Now,  I  do  not  care  in  what  way,  and  I 
do  not  think  the  public  cares.  This  idea  that  the  public  is  espe- 
cially entitled  to  any  one  judgment  on  this  subject  is  erroneous, 
and  I  do  not  think  they  themselves  care  particularly  about  the 
method,  but  give  the  board  authority  to  pay  for  those  differences. 
You  might  start  in  and  say  that  the  payment  should  not  be  more 
than  a  million  dollars  a  year  for  the  first  year,  and  it  might  reach  a 
maximum,  and  if  you  did  that,  you  would  get,  in  my  opinion,  in 
five  or  six  years  four  million  or  five  million  tons  of  shipping,  and  I 
do  not  believe  it  would  cost  this  Government,  if  you  put  a  maximum 
on  it,  say,  more  than  five  million  dollars  in  putting  those  four  or  five 
million  gross  tons  on  the  water  under  the  American  flag. 

Mr.  Loud.  In  any  one  year? 

Mr,  Douglas.  Yes;  in  any  one  year,  and  you  would  not  reach 
the  maximum  for  six  or  seven  years.  I  do  not  believe  that  the  public 
of  the  United  States  would  for  one  moment  dream  of  criticizing 
Congress  under  a  provision  of  that  kind.  It  is  absolutely  essential. 
You  will  never  get  the  ships,  except  by  waiting  many  years,  unless 
you  do  something  of  that  kind. 

The  Chairman.  Have  you  ever  made  an  estimate  of  how  many 
ships  we  could  get  by  paying  an  annual  subvention  or  subsidy  of 
$5,000,000? 

Mr.  Douglas.  Yes,  sir;  I  did.  About  10  years  ago  I  went  into  it 
very  thoroughly,  very  deeply,  and  paid,  myself,  some  of  the  best 
experts  in  the  East  to  look  that  thing  up,  and  to  talk  it  over  with  me, 
and  I  found  at  that  time— of  course,  thmgs  are  entirely  changed, 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         15 

fentlemen,  and  you  can  not  do  it  to-day,  and  I  recognize  that — but 
found  that  about  between  four  and  five  milhons  of  dollars  at  that 
time — 10  years  ago,  say — would  have  given  us  at  least  eight  lines 
to  foreign  countries,  and  it  would  have  enabled  us  to  have  increased 
those  lines  as  time  went  on,  and  I  figured  at  that  time  that  we  would 
have  had  about,  say,  at  the  end  of  10  years,  under  the  $5,000,000 
appropriation,  which  would  have  run  10  years — that  would  have 
been  $50,000,000,  it  is  true — but  I  think  we  would  have  at  least  two 
or  three  hundred  steamers.  Of  course,  those  estimates  were  based 
on  conditions  which  existed  then,  which  were,  of  course,  a  lower  cost 
of  building  and  everything  favorable  to  purchases  and  operation. 
That  is  as  far  as  I  can  answer  the  question,  but,  of  course,  what  I 
am  advocating  now  is  entirely  different,  because  I  understnad  the 
Imes  will  be  established  in  a  different  way. 

I  want  to  touch  upon  just  one  or  two  pomts,  if  I  am  not  taking  up 
too  much  time,  Mr.  Alexander,  in  connection  with  the  present  bill, 
because  it  is  a  very  serious  question. 

The  fu-st  point  I  would  like  to  bring  up  is  your  section  where  you 
state  that  it  is  the  int(nition  to  build,  lease,  or  buy  here  or  elsewhere 
these  vessels  with  a  view  to  leasing  them  to  American  citizens  or 
corporations.  I  was  disappointed,  and  I  tliink  many  others  were, 
that  the  very  pronounced  and  very  admirable  statements  of  the  Sec- 
retary of  the  Treasury  did  not  come  into  play  in  that  bill  a  httle 
more  on  that  feature.  I  beUeve  he  is  ])rGsent,  and  I  hope  I  am  not 
quoting  him  \\Tong  when  I  say  he  is  thoroughly  in  accord  with  the 
desire  of  having  linos  established  as  quickly  as  possible,  and  this 
because  there  is  an  inference  on  the  part  of  the  pubhc  that  it  is  a 
little  sidetracked.  I  think  that  the  bill  should  say  distinctly  that 
the  fust  intent  and  purpose  of  the  building  of  these  boats,  if  they 
are  built,  means  the  establishment  of  these  lines,  and  then  make  it 
plain  that  that  language  "^\-ith  a  view  to''  means  that  those  lines 
are  to  be  first  established  under  private  ownership,  if  it  be  feasible 
to  do  it. 

I  understand  that  the  intent  of  the  gentlemen  present  here  in  this 
committee  is. the  same  as  I  am  urging,  but  if  you  \nll  just  make  that 
plain  to  the  public,  your  ways  will  be  greased;  they  will  have  more 
■sympathy  ^ith  the  bill  than  if  you  do  not  make  it  plain.  There  is 
not  a  man  in  this  country  who  does  not  say  that  he  wants  hues  to 
South  America  and  to  Africa  and  to  Australia,  and  in  every  other 
direction  where  the  commerce  of  the  United  States  can  be  benefited; 
and  I  hope  that  will  be  made  clear,  because  the  people  have  the 
idea  that  it  will  not  do  that. 

The  Chairman.  You  mean,  to  pay  for  the  estabhshment  of  cer- 
tain lines  ? 

!Mi".  Douglas.  That  would  be  the  prime  object,  for  this  reason, 
Judge:  Fifty  millions  of  dollars  ^\ill  not  establish  those  lines,  because 
the  vessels  built  by  that  $50,000,000  will  probably  be  entirely  taken 
up  in  the  establishment  of  those  lines,  so  you  must  look  at  it  as  a 
cold  fact  that  you  will  not  have  any  more  ships  after  those  lines  are 
established,  if  they  are  established,  to  lease  or  to  sell  to  individuals, 
nor  wiU  you  ever  have,  because  you  have  a  coastwise  provision  as 
well  in  this  ]>iU,  vrhich  I  did  ]iOt  mention,  and  I  have  no  authority  to 
speak  about.  Our  committee  did  not  take  up  the  coastwise  business, 
but  that  is  a  mo:t  important  and  a  most  necessary  featsn'e. 


16         SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

The  Chairman.  You  will  note  that  this  bill  provides  that  if  these 
ships  are  built  in  an  American  shipyard,  they  may  he  used  in  coast- 
wise as  well  as  in  foreign  trade. 

Mr.  Douglas.  That  is  quite  proper. 

The  Chairman.  We  are  not  willing  to  commit  ourselves  to  a  propo- 
sition that  a  ship  built  in  an  American  shipyard  should  not  be  used 
in  coastv/ise  as  well  as  in  foreign  trade. 

Mr.  Douglas.  I  do  not  see  how  you  could.  That  is  altogether 
proper.  If  a  man  builds  a  ship  here,  he  has  the  right  to  use  it  in 
the  coastwise  trade,  beyond  question,  in  my  judgment. 

IVIr.  Curry.  Even  though  she  is  assisted  by  the  Government? 

Tkli".  Douglas.  I  do  not  think  it  makes  the  slightest  difference 
whether  she  is  assisted  or  whether  she  is  not.  That  is  for  the  judg- 
ment of  the  committee.  I  can  only  express  myself  personally  on 
this  proposition;  I  consider  and  I  miderstand  that  some  of  my 
committee,  perhaps,  and  others  differ  with  me  on  that  question,  but 
I  am  very  glad  you  asked  that  question,  because  I  can  express  myself 
personally,  and  personally  I  do  not  think  it  is  essential,  if  she  is  built 
m  an  American  shipyard,  to  give  her  that  difference  of  cost  when  she 
is  engaged  hi  deep-sea  business,  and  if  I  were  framing  a  bill,  1  would 
distinctly  state  in  the  bill  if  she  were  engaged  in  deep-sea  business  for 
a  continuous  service  of,  say,  not  less  than  six  months  at  one  time, 
that,  in  the  discretion  of  the  board,  they  might  have  authority  to 
give  or  grant  some  compensation,  but  I  do  not  think  for  a  moment 
that  it  would  be  fair  or  proper  to  give  that  grant  if  she  were  engaged 
in  the  coastwise  trade. 

The  Chairman.  It  would  be  an  anomoly  if  one  of  these  ships  built 
in  an  American  shipyard  and  chartered  or  leased  by  this  board  to  a 
private  i]Klividual  or  a  corporation,  and  trading  from  New  York  to 
Japan  or  China,  might  not  carry  passengers  or  freight  from  New  York 
to  San  Francisco,  and  then  proceed  on  her  journey  to  the  Far  East. 
I  say  that  would  be  an  anomoly  to  say  they  should  not  do  that. 
Of  course,  I  assume  the  purpose  of  this  bill  is  that  these  vessels  should, 
primarily,  be  used  in  foreign  trade. 

Ml".  Douglas.  Yes,  sir. 

The  Chairman.  But,  as  one  link  in  her  trip,  they  might  trade  from 
coast  to  coast,  because  this  is  a  great  empire  itself. 

Mr.  Douglas.  You  mean,  and  also  carry  a  cargo  that  was  going 
farther  on  ? 

The  Chairman.  Yes;  or  carry  a  cargo  from  New  York  to  San 
Francisco  and  then  a  cargo  from  San  Francisco  to  the  Far  East. 

Mr.  Douglas.  Part  of  the  cargo,  you  mean  ? 

The  Chairman.  Yes. 

Mr.  Douglas.  Of  course,  if  she  had  no  cargo  after  she  left  San 
Francisco  she  would,  of  course,  start  a  new  voyage. 

The  Chairman.  Oh,  yes. 

Mr.  Douglas.  I  think  that  is  understood  by  the  committee,  and  I 
am  entirely  in  sympathy  with  the  proposition  that  a  vessel  should 
be  permitted  to  go  from  New  York  to  San  Francisco  and  discharge 
50  per  cent  of  her  cargo  at  San  Francisco,  and  she  should  be  eliminated 
from  payment  for  any  part  of  that  cargo.  That  would  be  perfectly 
proper.  Naturally  we  are  not  going  to  pay  them  a  subsidy  for  run- 
ning on  the  coast.     That  would  be  all  wrong. 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MEECHANT  MAIUNR.         1? 

The  Chairman.  We  would  not  pay  any  sliip  subsidy  for  engaging 
in  the  coastwise  trade;  that  is  dead  sure. 

Mr.  Curry.  An  American-built  vessel  could  go  from  Liverpool  to 
San  Francisco  by  way  of  New  York,  unload  part  of  her  cargo  at 
New  York  and  take  on  some  cargo  at  New  York  for  San  Francisco 
and  then  load  again  at  San  Francisco  back  to  Liverpool. 

Mr.  Douglas.  I  think  it  would  be  unfair  to  the  rest  of  the  shipping 
for  her  to  do  that  and  receive  full  remuneration  in  subsidy. 

The  Chairman.  I  am  not  talking  about  subsidy  at  all.  I  was 
speaking  about  an  American-built  ship.  This  bill  provides  that  if  a 
ship  is  built  at  an  American  shipyard  she  may  be  used  in  the  coastwise 
trade. 

Mr.  Douglas.  Yes;  and  you  can  not  stop  her. 

The  Chairman.  I  do  not  think  there  is  any  reason  why  it  should 
be  done. 

Mr.  Douglas.  No.  They  should  be  subsidized  only  for  particular 
trade. 

Mr.  Greene.  In  your  experience  in  the  shipping  trade  and  in  your 
knowledge  of  general  business  throughout  the  country  have  you  found, 
to  a  large  extent,  any  opposition  to  the  use  of  subsidy  or  the  use  oi 
the  word  "subsidy'  in  relation  to  building  up  an  American  merchant 
marine  ? 

Mr.  Douglas.  I  can  best  answer  that  question  by  stating,  if  the 
gentleman  has  heard  what  I  have  just  said  as  to  the  viewpoint  of 
others  throughout  the  country  on  that  subject,  he  will  recall  that  I 
said  they  overwhelmingly  feel  perfectly  agreeable  to  take  subventions 
or  subsidies,  if  Congress  is  willing  to  grant  it. 

Mr.  Greene.  The  experience  I  have  had  here  during  the  years  I 
have  been  in  Congress  is  that,  in  reality,  there  is  no  real  opposition  to 
the  use  of  the  word  "subsidy''  or  to  subsidy  itself,  except  on  the  part 
of  some  Members  of  Congress  who  represent  dry  districts,  where  ves- 
sels never  go  and  can  not  exist;  they  think  that  subsidy  is  a  horrible 
thing. 

Mr.  Douglas.  I  can  best  answer  that,  Mr.  Greene,  by  stating  this: 
You  can  meet  10  men  in  the  street  and  you  can  indulge  in  a  contro- 
versy— because  it  is  always  a  controversial  question,  as  we  know — 
with  all  those  10  men,  and  after  you  have  discussed  it  with  them  and 
talked  about  it  a  long  time,  you  may  finally  say,  "You  are  in  favor 
of  having  the  American  flag  on  the  ocean,  are  you  not?"  and  every- 
one of  those  10  men — I  do  not  care  what  section  they  are  from — will 
say,  "Yes;  I  am."  Then  if  you  say,  "Gentlemen,  do  you  care  how 
the  flag  goes  on  the  ocean  ?  Are  you  wedd.'d  to  this  special  way  you 
have  told  me  about?"  And  they  will  say,  "No;  I  do  not  care  how; 
I  want  the  American  flag  on  the  ocean,  and  I  will  indorse  anything 
that  Congress  does  to  put  it  there."  That  is  the  sentiment,  and  I  am 
that  way,  too;  I  do  not  care  anything  about  it.  If  you  will  provide 
the  way,  I  will  indorse  your  scheme;  I  do  not  care  whether  it  is  sub- 
sidy or  what  not. 

Mr.  Saunders.  Are  you  about  through  with  your  remarks,  Mr. 
Douglas  ? 

Mr.  Douglas.  Practically  through. 


18         SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  -MERCHANT  MARINE. 

Mr.  Saunders.  The  re:ison  I  ask  Is  because  I  want  to  ask  you  a 
number  of  questions,  pnd  to  get  some  information,  l)ut  I  do  not  want 
to  inteiTU])t  j-'ou  if  you  are  not  through. 

Mr.  Douglas.  I  will  be  through  shortly.  I  hope  it  wiU  be  fair  to 
call  attention  to  the  fact  thftt  we  ho};e  that  the  bill  will  make  promi- 
nent the  question  of  the  commercial  needs  of  the  country.  We  are  all 
thoroughly  m  sympathy  with  the  naval  requirements,  too,  but  I 
do  not  thinl:  the  naval  requirements  should  be  put  ahead  of  the  com- 
mercial requirements.  The  Secretary  of  the  Treasury,  by  courtesy, 
for  which  we  thank  him,  was  agreeable  to  have  us  incorporate  in  our 
fourth  annual  report  this  question,  the  addendum  in  relation  to  what 
the  Secretary  of  the  Navy  desired  in  the  way  of  boats  to  ])e  built  to 
meet  the  Navy  requirements,  and  I  think  if  you  gentlemen  will  care- 
fully analyze  that  statement,  if  it  is  intended  to  build  on  that  line, 
I  am  afraid  we  would  run  against  a  good  many  snags,  and  that  we 
would  not  get  quite  the  commercial  vessels  that  we  require. 

Mr.  Hardy,  Ninety  per  cent  or  more  of  the  people  want  an  Ameri- 
can merchant  marine,  and  do  not  care  how  they  get  it.  Nevertheless, 
does  not  your  chamber  of  commerce,  m  the  presentation  you  are 
making  now,  tend  to  upset  the  obtaining  of  that  merchant  marine  by 
the  means  proposed  in  this  bill,  and  to  hold  us  down  to  the  one  idea 
of  obtaining  it  by  subsidy  only  ?  If  your  people  can  not  get  it  in  an3'^ 
other  way  than  through  this  bill,  will  they  obstruct  it  and  filibuster 
it  to  death  ? 

Mr,  Douglas.  Mr.  Hardy,  I  would  like  to  answer  that  question, 
but  it  would  involve  a  big  argument.  I  shall  not  control  Congress. 
Unfortunately  I  am  a  Republican,  I  regret  to  sa}'-;  I  would,  perhaps, 
rather  be  a  Democrat  under  this  administration. 

Mr.  Hardy.  Would  ycu  favor  beating  this  bill,  rather  than  to 
accept  it  in  its  present  form  ? 

Mr.  Douglas,  I  will  answer  you  right  straight:  Personally,  if  you 
stick  to  stubborness,  I  think  we  should,  but  if  you  yield  to  the  hand 
of  good-fellowship — and  understand,  now,  I  am  talking  personally, 
I  am  not  talking  for  the  chamber  of  commerce  or  for  anybody  else,  I 
am  only  talking  for  myself — if  you  will  extend  the  hand  of  sympathy 
and  good-fellowship  to  the  American  people  in  your  bill,  and  if  you 
will  incorporate  in  it  those  reasonable  and  proper  changes,  I  believe 
the  public  will  be  with  you. 

Mr,  Hardy,  In  other  words,  if  we  wiU  go  your  way,  you  wiU  be 
with  us,  but  you  wiU  not  go  our  way  ? 

Mr.  Douglas,  No;  but  there  is  give  and  take  in  good-fellowsliip, 
and  we  are  willing — I  am  not  speaking  for  the  pubhc,  only  myself  per- 
sonally— I  believe  that  the  great  obstacle  and  the  serious  obstacle 
with  your  biU  to-day  is  the  fact  that  you  do  not  come  out  definitely 
and  positively  and  say  that  you  intend  to  spend  this  ^^50,000,000  for 
the  benefit  of  the  country,  and  also  that  you  are  not  for  Government 
operation. 

Mr.  Hardy,  Then,  you  are  very  definite  in  your  position,  unless  it 
goes  your  way  ? 

Mr.  Douglas.  Oh,  no,  Mr.  Hardy;  not  any  more  my  way  than  your 
way.     There  are  two  ways  you  could  go. 

Mr.  Hardy.  And  if  we  snould  propose  to  put  the  American  mer- 
chant marine  on  the  sea  in  our  way,  will  you  help  us  ? 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         19 

Mr.  Douglas.  I  am  sorry  to  say  I  can  not  give  you  much  help, 
but  I  will  tlirow  out  a  suggestion  for  your  consideration. 

Mr.  Hardy.  You  would  compromise,  your  way  ? 

Ml'.  Douglas.  Yes;  I  want  a  compromise,  because  by  compromise 
is  the  only  way  we  will  get  into  this  good-fellowship  that  I  hope  we 
will  get  into.  You  can  do  but  one  thing  to  meet  the  views  of  the 
American  public  on  this  question,  and  the  American  public  beyond 
any  doubt,  is  against  you,  Mr,  Hardy,  on  that  proposition — abso- 
lutely. 

The  Chairman.  On  what  proposition? 

Mr.  Douglas.  On  the  proposition  of  permanent  Government  opera- 
tion. Now,  why  do  you  not  do  this:  Why  do  you  not  say,  ''We  will 
take  you  into  our  confidence."  Why  do  you  not  incorporate  in  the 
bill  u  provision  that  the  Government,  if  it  is  forced  to  have  operation, 
will  limit  that  operation  to  a  reasonable  number  of  years  after  the 
war,  and  take  the  sting  out  of  your  bill,  because  what  is  the  use  of 
having  Government  operation  with  §50,000,000  ?  It  is  a  farce  on  the 
face  of  it.  Mi*.  Hardy,  oecausc  what  are  you  going  to  do  when  you  get 
your  60  steamers  with  your  $50,000,000?  Are  you  goiti^  to  go  to 
Congress  next  year  and  say,  "We  made  a  mistake;  the  United  States 
does  not  want  100  vessels;  they  want  1,000  vessels,"  and  ask  them 
for  $100,000,000  more?     You  will  not  get  it. 

The  Chairman.  If  we  should  put  in  a  limit  of,  say,  five  years, 
would  the  Chamber  of  Commerce  of  the  United  States  get  behind 
this  bill? 

Mr.  Douglas.  I  can  only  answer  that  by  saying  that,  so  far  as  I 
am  personally  concerned,  I  would  hope  they  would  try  to  meet  you 
on  lair  grounds,  but  understand,  as  I  said  when  I  came  here  this 
morning,  I  coidd  not  get  hold  of  ^Ii-.  Fay,  or  anybody  else;  therefore 
I  can  only  speak  for  the  Chamber  of  Commerce  on  the  referendum 
and  reports;  but,  personally,  I  do  not  think  I  would  do  much  kicking. 

The  Chair:sian.  There  is  one  thing  I  am  disposed  to  resent,  and 
that  is  the  implication  that  you  are  speaking  for  the  American 
people. 

Mr.  Douglas.  So  far  as  the  referendum  goes,  yes. 

The  Chairman.  I  question  that  very  seriously.  Who  were  the 
members  of  the  subcommittee,  of  which  you  were  chairman,  that 
framed  this  report? 

Mr.  Douglas.  The  last  report  or  the  present  report  ? 

The  Chairman.  The  present  report. 

Mr.  Douglas.  They  are  here  in  the  book,  and  I  will  leave  it  with 
you,  Mr.  Alexander. 

The  Chairman.  Who  are  some  of  them  ? 

Mr.  Douglas.  I  will  read  them  off,  if  you  wish. 

The  Chairman.  Yes. 

Mr.  Douglas.  Paul  C.  Bates,  of  Portland,  Oreg. 

The  Chairman.  Who  is  he  ? 

Mr.  Douglas,  I  could  not  say  exactly  who  he  is,  without  referring 
to  my  letters. 

The  Chairman.  What  is  his  position  as  to  the  steamship  hues 
and  the  raihoads  ? 

Mr.  Douglas.  He  has  taken  a  great  deal  of  interest  in  it,  I  under- 
stand, and  he  has  also  taken  an  interest  in  the  referendum  in  that 
part  of  the  country  in  which  he  lives.     He  sent  me  a  very  large 


20         SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

number  of  letters,  which  he  told  me  to  file  with  the  chamber'of 
commerce,  which  he  had  had  from  50  or  60  other  chambers  of  com- 
merce or  other  parties  in  Portland, 

The  Chairman.  I  spent  a  month  in  Portland  last  summer,  and  it 
was  my  privilege  to  meet  many  of  the  members  of  the  chamber  of 
commerce  and  of  its  different  subcommittees,  and  I  have  a  notion 
of  the  influence  that  dictated  the  report  of  that  chamber,  and  I 
told  the  subcommittee  to  be  sure,  when  that  was  written,  that  some 
railroad  man's  hand  was  not  over  their  shoulder,  directing  their 
opinion.  I  said  that  to  the  subcommittee.  I  just  felt  that  influ- 
ence was  so  predominating  that  I  said  that  to  them — but  do  you 
know  Mr.  Bates  ? 

Mr.  Douglas.  I  do,  but  I  do  not  remember  what  company  he  is 
associated  with,  now,  ^Ir.  Chairman,  from  memory. 

The  Chairman.  He  is  connected  with  a  steamship  line,  is  he  not  ? 

Mr.  Douglas.  I  do  not  know;  really,  I  am  not  sure;  not  to  my 
knowledge;  it  is  not  on  his  letterhead. 

The  Chairman.  Are  these  reports  by  the  subcommittee  referred 
to  the  members  of  the  chambers  of  commerce,  and  does  each  mem- 
ber of  the  chamber  of  commerce  express  his  opinion  ?  Just  give  us 
the  modus  operandi  by  which  you  ascertain  the  sentiments  of  the 
chambers  of  commerce. 

Mr.  Douglas.  I  thought  the  judge  was  pretty  well  advised  about 
that  without  needing  any  explanation  from  me. 

We  appomt  a  committee;  that  committee,  presumably,  study  the 
subject  and  get  what  mformation  and  advice  and  judgment  they  can 
on  the  matter.  If  it  is  deemed  proper  to  make  a  report  and  the  presi- 
dent of  the  chamber  desires  us  to  do  so,  that  committee  makes  a 
report.  That  report  then  goes  to  the  board  of  directors  of  the  cham- 
ber and  they  O.  K.  it  or  make  changes  in  it.  You  will  note  we  have  a 
little  memorandum  here  m  our  present  report,  by  which  we  star  cer- 
tain men  that  we  could  not  get  on  the  committee,  could  not  get  hold 
of  them  in  time,  and  we  state  that  since  the  report  was  submitted 
there  were  certain  suggestions  made.  That  report,  I  want  to  say,  in 
the  amended  form,  was  handed  to  me  not  one  mmute  before  I  went  to 
the  platform  to  present  it.  I  knew,  of  course,  its  contents,  but  it  had 
to  be  reprinted  with  those  things  added.  Then,  after  that  is  done,  if 
there  is  anything  in  the  report  which  justifies  our  going  to  a  referen- 
dum, why,  of  course,  we  go  to  referendum,  and  then  we  get  an  expres- 
sion, and  the  committee  itself  and  the  board  of  directors  never  take 
any  action,  as  you  know,  Judge,  on' any  question,  until  they  have  the 
authority  by  a  referendum  confirmed  by  two-thirds  of  that  vote, 
before  they  feel  justified  m  making  any  expression  whatever. 

The  Chairman.  That  is  a  two-tliirds  vote  of  the  chambers  of  com- 
merce, is  it  not  ? 

Mr.  Douglas.  No;  it  is  two-thirds  vote  of  the  constituent  bodies. 
There  are  between  six  and  seven  hundred  of  them  to-day  scattered  all 
over  this  country  and  some  in  foreign  lands. 

The  Chairman.  What  I  want  to  know  is  how  do  jou  get  the  senti- 
ment of  the  individual  members  of  the  chambers  of  commer.ce.  For 
instance,  in  Portland — I  suppose  you  all  have  the  same  rules — how 
did  the  Chamber  of  Commerce  in  Portland  get  the  sentiments  of  the 
membership  of  the  Chamber  of  Commerce  of  Portland  with  reference 
to  this  legislation  ? 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         21 

Mr.  Douglas.  Of  course  that  depends  on  the  rules  of  the  various 
bodies.  It  does  not  matter  whether  they  are  chambers  of  commerce 
or  other  commercial  organizations,  because  they  are  not  all  chambers 
of  commerce — these  constituent  bodies. 

The  Chairman.  The  Chamber  of  Commerce  of  Portland  is  one  of 
your  constituent  bodies  ? 

Mr.  Douglas.  Oh,  yes.  As  to  how  the  Chamber  of  Commerce  of 
Portland  took  that  referendum  and  what  way  tliey  acted  on  it,  I  hnve 
no  knowledge. 

The  Chairman.  Individual  members  of  that  chamber  of  comm.erce 
told  me  that,  so  far  as  they  have  knowlerlge,  tlie  cjuestion  was  never 
submitted  to  the  membership  of  the  chamber. 

Mr.  Douglas.  That  I  do  not  know.  Judge. 

The  Chairman.  Herice,  I  say  it  is  questionable  whether  or  not,  if 
that  is  the  method,  those  reports  of  the  chambers  of  commerce  reflect 
the  sentiment  of  the  indivi(iual  members  of  the  chamber. 

Mr.  Douglas.  I  can  only  sav  on  chat  question  that  I  am  willing  to 
go  with  you,  leaving  out  a  small  section  of  the  South,  to  any  chamber 
of  commerce  m  the  United  States  to  which  you  want  to  go  with  me, 
and  let  us  see  whether  tlie  sentiment  in  that  chamber  of  commerce 
agrees  with  me  or  with  you.     I  will  he  willing  to  take  the  chance. 

The  Chairman.  I  just  want  to  find  out  how  you  ascertain  the  sen- 
timent of  the  individual  members. 

Me.  Douglas.  I  can  not  say.  In  New  York  they  have,  for  in- 
stance, ascertained  it  in  a  lot  of  diflerent  wa3^s,  so  it  is  an  impossi- 
bility to  answer  the  question  frankly. 

Mr.  Edmonds.  On  page  19  you  have  a  statement  here  which  says 
that  on  May  8  nine  questions  were  placed  before  the  members  of 
the  chamber  separated  on  two  ballots  accordingly  as  the  questions 
were  based  primarily  upon  issues  raised  by  the  report  of  the  special 
committee  or  were  added  by  the  board  of  directors  of  the  chamber. 
Under  the  by-laws  of  the  chamber  the  voting  closed  at  midnight  on 
June  22,  when  282  organizations  had  filed  ballots.  These  organiza- 
tions are  situated  in  39  States,  the  District  of  Columbia,  Alaska, 
Hawaii,  the  Phihppines,  Porto  Rico,  and  Paris,  France.  In  the  bal- 
loting each  organization  casts  as  many  votes  as  it  may  have  delegates 
at  an  annual  meeting  of  the  chamber.     Was  that  done  ? 

Mr.  Douglas.  Yes. 

Mr.  Edmonds.  That  is  the  way  you  got  your  vote  ? 

Mr.  Douglas.  Yes. 

Mr.  Edmonds.  Does  not  that  answer  the  chairman's  question,  then  ? 

Mr.  Douglas.  It  does,  except  that  the  chainnan  is  perfectly  right, 
I  think,  in  making  his  point.  I  can  not  say  to  him  how  any  individual 
constituent  body  reac  hed  the  result. 

Mr.  Edmonds.  But  that  is  the  general  rule  of  your  chamber  ? 

Mr.  Douglas.  Yes. 

Ml*.  Edmonds.  And  that  is  the  way  it  should  be  done  ? 

Mr.  Douglas.  Yes.  I  find  out  that  ^Ir.  Bates — I  have  a  letter 
from  him  in  my  pocket — his  name  is  Paul  C.  Bates,  Portland,  Oreg., 
and  he  is  a  member  of  the  firm  of  McCargar,  Bates  &  Lively,  and  the 
heading — I  am  taking  it  from  the  heading — it  is  down  as  "General 
insurance  agents." 

Mr.  Greene.  You  are  going  to  give  the  remainder  of  the  names  on 
that  committee  ? 


22         SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  :\rKKCHANT  MARINE. 

Mr.  Douglas.  If  the  committee  wishes  it. 

The  Chairman.  They  are  in  the  report  ? 

Mr.  Douglas.  Yes. 

Mr.  Greene.  I  would  like  to  ask  Mr.  Douglas  this  question:  In 
case  of  any  lines  being  leased  under  this  bill  for  the  foreign  trade, 
do  you  think  it  would  be  a  fair  proposition — assuming,  as  I  do,  that 
if  they  are  leased  in  the  foreign  trade  they  will  be  leased  at  a  low 
figure,  in  order  to  compete  with  foreign-built  vessels,  running  under 
foreign  regulations — would  it  be  a  fair  proposition  for  those  leased 
lines  to  be  admitted  in  competition  with  the  coastwise  trade  ? 

Mr.  Douglas.  I  do  not  understand  that  there  is  a  special  desire  to 
do  so,  under  the  bill,  unless  there  is  that  one  provision  of  the  bill 
which  gives  them  authority  to  do  that. 

Mr.  Greene.  Yes. 

Mr.  Douglas.  That  is  a  great  question,  because  it  depends  upon 
to  whom  you  lease  them.  You  may  lease  them  to  people  who  are 
already  in  the  coastwise  trade. 

Mr.  Greene.  Yes. 

Mr.  Douglas.  Of  course,  if  they  get  one  or  two  or  more  of  those 
steamers,  I  presume  they  are  benefiting  to  some  extent,  and  I  sup- 
pose citizens  of  the  United  States  will  have  to  take  a  chance  on  that 
proposition;  but  I  say  if  you  start  your  lines,  there  wiU  be  no  vessels 
to  lease.     That  is  all  there  is  to  it. 

The  Chairman.  Is  it  true  or  not  that  the  expression  of  the 
opinion  of  the  constituent  members  of  the  Chamber  of  Commerce  of 
the  United  States  is  not  made  through  the  board  of  directors  or 
through  their  executive  committees  ? 

]\Ir.  Douglas.  The  board  of  directors  here  or  of  the  constituent 
bodies  ? 

The  Chairman.  Of  the  constituent  bodies. 

Mr.  Douglas.  Judge,  I  have  answered  that  three  times  aheady. 
I  do  not  know  the  by-laws  of  these  six  or  seven  hundred  constituent 
bodies.  I  presume  each  one  of  those  bodies  acts  in  accordance  with 
its  by-laws.  WTiether  or  not  they  have  authority  to  pass  judgment 
on  it,  I  do  not  know,  but  I  hope  they  are  men  of  ordinary  intelli- 
gence, and  I  hardly  think  they  would  fly  in  the  face  of  the  member- 
ship of  their  body  and  put  in  a  report  that  was  not  indorsed  by  the 
average  membership  of  that  body.  It  seems  to  me  they  would  not 
do  that. 

The  Chairman.  I  simply  wanted  to  know  the  modus  operandi. 

Mr.  Douglas.  Mr.  Goodwin,  the  secretary,  might  be  able  to  en- 
lighten you  very  much  better  than  I  could  on  that  subject,  hecause 
he  gets  the  reports. 

The  Chairman.  You  say  that  under  the  by-laws  of  the  chamber 
the  voting  closed  at  midnight  on  June  22,  when  282  organizations 
had  filed  ballots,  and  that  these  organizations  are  situated  in  39 
States,  the  District  of  Columbia,  Alaska,  Hawaii,  the  Philippines, 
Porto  Rico,  atid  Paris,  France. 

Mr.  Douglas.  Yes. 

The  Chairman.  How  many  are  there,  all  told  ? 

Air.  Douglas.  Between  six  and  seven  hundred  to-day. 

The  Chairman.  Then,  less  than  one-half  of  them  had  filed  ballots? 

Air.  Douglas.  Yes;  that  is  true.  There  is  one  other  point  I  would 
like  to  bring  up,  and  then  I  do  not  Imow  I  will  have  anything  more 
to  say,  unless  there  are  some  questions. 


SHIPPING  BOARD,  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE.         23 

The  supervision  of  firms  is  quite  prominent  in  the  bill.  There  seems 
to  be  a  good  deal  of  opposition  to  that,  Judge.  Our  chambers  of  com- 
merce have  not  passed  on  it  at  all,  but  I  hope  the  committee  will 
think  that  over  very  carefully,  so  that  the  supervision  or  regulation 
of  firms  will  be  so  that  they  will  not  interfere  too  much  with  corpora- 
tions. Some  people  called  my  attention  to  the  fact — in  fact,  quite 
a  few  during  the  present  convention— that  they  were  a  little  afraid 
of  too  close  looking  into  their  private  affairs,  so  that  I  only  mention 
that  as  a  point  which  people  bring  up. 

The  Chairman.  I  do  not  think  we  have  that  in  mind  at  all — that 
is,  undue  interference  with  people's  private  affairs. 

Mr.  Douglas.  The  only  other  provision  I  want  to  bring  up  is  that 
we  make  no  suggestion  in  regard  to  the  question  of  that  very  impor- 
tant feature  of  the  bill  dealing  with  through  bills  of  lading,  because 
we  felt  that  we  did  not  have  enough  information  or  enough  views  of 
the  public  to  really  warrant  our  going  into  that  very  fully.  I  dare 
say  Secretary  Redfield,  however,  will  tell  the  committee  about  that, 
because  he  knows  what  is  in  the  minds  of  the  Government,  and  we 
were  not  quite  sure,  and  we  felt,  therefore,  we  should  be  a  little  care- 
ful and  simply  say  it  should  be  thoroughly  looked  into,  because  I 
understand,  if  I  am  right,  you  confine  that  to  American  ships;  that 
is,  those  through  bills  of  lading  would  not  be  given  where  they  would 
go  on  other  alien  ships. 

The  Chairman'.  No. 

]\rr.  Douglas.  Of  course,  that  is  an  important  provision. 

The  Chairman.  Yes. 

Mr.  Douglas.  Because  the  number  of  American  ships,  for  a  long 
time,  will  not  be  nearly  sufficient  to  carry  a  large  quantity  of  freight 
which  will  endeavor  to  secure  those  prefcrentials,  and  we  certainly 
do  not  want  great  big  corporations  in  this  country  to  monopolize 
room.  Every  statement  we  have  endeavored  to  make  has  been 
along  the  lines  of  giving  the  small  man  protection;  that  is,  we  want 
the  small  manufacturers  and  the  small  merchants  throughout  the 
country  to  have  the  same  rights  and  privileges  which  the  larger 
corporations  of  the  United  States  may  have. 

The  Chairman.  I  think  it  is  the  intention  that  these  preferential 
rates  may  be  given  not  simply  to  those  ships  leased  or  chartered  from 
the  Government,  but  to  all  sliips,  whether  domestic  of  foreign,  to 
facilitate  the  extension  of  our  foreign  commerce. 

Mr.  Douglas.  If  they  fly  the  American  flag. 

The  Chairman.  Yes. 

Mr.  Douglas.  I  just  wanted  to  know  that,  because  a  great  many 
people  have  asked  us  what  we  thought  about  it. 

The  Chairman.  I  am  glad  you  called  attention  to  it,  because  we 
want  that  perfectly  clear. 

Mr.  Douglas.  Twill  be  glad  to  answer  any  questions.  Judge. 

Mr.  Sal-nders.  There  is  a  great  deal  of  tonnage  to-day  engaged  in 
deep-sea  traffic.  That  shipping  is  owned  by  foreign  capital  that 
either  had  their  ships  constructed  or  bought  them  already  con- 
structed, and  put  them  into  this  trade.  There  is  plenty  of  private 
capital  in  the  United  States  just  now — I  imagine  more  than  anywhere 
else  in  the  world;  that  capital  is  just  as  willing  to  make  money  in 
dividends  on  that  deep-sea  trade  as  in  any  other  direction.  Tell  mc 
why  it  is  that  American  private  capital  to-day,  under  our  present 


24         SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

laws,  can  not  buy  ships  or  have  them  constructed,  put  them  on  the 
high  seas,  and  get  the  profit  in  competition  with  their  foreign  com- 
petitors; and,  if  they  can  not  do  it,  just  what  are  the  obstructions 
now  that  hinder  them  from  doing  it? 

Mr.  Douglas.  The  gentleman  knows  probably  that  question  as 
well  as  I  do.     He  knows  that  there  are  certain  laws 

Mr.  Saunders  (interposing).  I  just  wanted  to  bring  that  out,  and 
put  it  in  the  record.     What  are  the  laws  ? 

Mr.  Douglas.  They  are  a  hardship,  and  then,  when  you  come  to 
regular  lines,  you  must  recognize  the  fact  that  the  ocean  is  not  any 
longer  what  we  used  to  think  it  was — a  great  big  body  of  water  where 
every  man  could  sad  his  ship ;  of  course,  if  it  is  a  pleasure  ship,  he  can; 
but  we  are  new  to  this  business,  in  a  sense,  as  against  the  older  Euro- 
pean nations,  and  when  3^ou  come  to  lay  out  routes  and  lay  out  serv- 
ice in  this  country,  they  are  past  masters  in  that;  they  know  just  what 
they  are  going  to  do;  they  know  where  their  cargoes  are  coming  from; 
they  know  the  port  they  are  going  to,  and  they  know  they  will  get  a 
cargo  from  that  port  also.  For  instance,  if  we  grant  under  this  bill 
the  right  to  corporations  to  run  these  vessels,  and  you  run  them  to 
South  America,  you  are  not  going  to  be  able  to  compete,  to  save  your 
soul,  with  foreign  lines,  nor  will  anybody  else.  The  man  who  lives 
in  London  or  Liverpool,  who  runs  a  regular  line  from  New  York,  he 
sends  her  over  with  such  cargo  as  he  can  get,  and  he  puts  her  on  berth 
for  South  Am.erica.  He  knows  he  will  get  a  full  and  remunerative 
cargo  and  make  money  there.  He  then  sends  her  to  Buenos  Aires, 
where  he  knows  he  can  make  money.  For  40  or  50  or  60  years,  per- 
haps, they  have  been  interested  in  the  South  American  trade.  He 
knows  the  hide  business,  the  coffee  business,  the  grain  business,  and, 
therefore,  before  his  ship  ever  leaves  Liverpool,  a  cable  goes  over,  and 
there  is  a  cargo  prepared  for  that  ship,  and  then  she  can  come  back 
in  the  other  direction  with  a  cargo  of  frozen  meat,  or  something  of 
the  kind.  He  knows  the  business,  and  he  knows  how  to  get  it.  He 
then  goes  to  that  other  port,  and  there  he  gets  a  cargo ;  he  gets  a  full 
cargo  everywhere  he  goes,  and  then  she  makes  the  rounds  again;  but 
what  will  we  do  ?.  You  ask  me  about  starting  a  line.  Unless  the 
proposition  is  backed  up  by  proper  Government  payments,  j^ou  might 
say,  of  some  character,  we  have  got  to  learn  these  things  and  do  what 
the  other  people  have  done;  we  have  got  to  go  out  there  and  find  that 
there  is  no  cargo  there  for  us;  the  chances  are  nine  out  of  ten  we  will, 
and  it  will  cost  us  dearly  for  that  experience.  That  is  the  condition 
of  the  business,  and  the  Government  must  meet  that  condition. 

Mr.  Saunders.  So  far  as  you  have  gone,  there  is  no  difficulty  in  the 
conditions,  except  those  that  arise  from  the  fact  that  our  competitors 
have  been  longer  at  the  business  than  we  have  been.  You  have  not 
stated  anything  else,  so  far,  except  that. 

Mr.  Douglas.  I  am  talking  of  navigation  laws,  seamen's  wages,  etc. 

Mr.  Saunders.  But  you  have  not  brought  up  those  things  yet. 
All  you  have  mentioned  are  the  superior  advantages  that  our  com- 
petitors have. 

Mr.  Douglas.  The  gentleman  knows  them  as  well  as  I  do;  he  does 
not  have  to  write  them  into  the  record. 

Mr.  Saunders.  I  want  them  put  into  the  record  for  the  purpose  of 
use  in  the  work  on  this  bill.  I  want,  in  a  concrete  way,  put  into  the 
record  whatever  obstructions  there  are,  if  any,  which  would  prevent 


SHIPPING  BOAllD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         25 

an  American  capitalist  from  building  a  ship  or  buying  a  ship  and 
putting  it  into  the  deep-sea  trade,  and  making  money  on  it  ? 

Mr.  Douglas.  To  answer  that,  it  would  take  me  an  hour  and  a  half, 
and  you  have  not  the  time  to  give  me.  I  will  be  glad  to  send  you 
some  papers  on  that  subject.  If  you  will  only  review  ancient  history, 
you  will  have  all  the  information  you  want  on  that  subject. 

Mr.  Saunders.  We  will  give  you  all  the  time  you  want. 

Mr.  Douglas.  I  will  mention  fii-st  the  navigation  laws. 

Mr.  Saunders.  Wliat  are  the  navigation  laws  that  obstruct  such 
an  enterprise  as  I  have  mentioned  ? 

Mr.  Douglas.  I  do  not  think  you  want  to  get  down  to  the  details 
of  navigation  laws.  There  is  the  inspection,  the  question  of  registra- 
tion of  ships.  For  instance,  an  American  ship  going  through  the 
canal  to-day  is  at  a  disadvantage  as  against  foreign  ships.  Why? 
Because  she  has  less  registry.     You  know  it  and  I  know  it. 

Mr.  Saunders.  An  American  ship  that  is  a  deep-sea  ship,  operated 
by  American  capital,  gomg  through  the  canal,  from  a  money  point  of 
view  as  a  result  of  registration,  would  be  at  a  disadvantage  with  a 
foreign  competitor  ? 

Mr.  Douglas.  I  understand  so. 

Mr.  Saunders.  Is  that  due  to  our  legislation? 

Mr.  Douglas.  Yes,  the  registry  bill. 

Mr.  Saunders.  Then  that  is  a  matter  which  we  can  change? 

Mr.  Douglas.  (Vrtiiinly. 

Mr.  Saunders.  So  as  to  relieve  that  handicap  ? 

Mr.  Doltglas.  T'ndoubtcdly. 

Mr.  Saunders.  What  is  the  next  obstacle  ? 

Mr.  Douglas.  The  question  of  wages  is  another  difficulty. 

Mr.  Saunders.  How  much  would  that  amount  to? 

Mr.  DougLxVS.  Tliat  has  ])een  estunated  l)y  much  more  able  men 
than  I  tim.  It  runs  nil  tlu^  way  from  1  per  cent  to  100  per  cent.  You 
can  take  your  choice. 

Mr.  Saunders.  I  will  put  it  this  wa}^:  WTiat  would  be  the  average 
tonnage — you  spoke  of  the  number  of  ships  this  $50,000,000  would 
buy,  and  t  sup])ose  that  is  about  correct.  What  would  ])e  the  aver- 
age tonnage  of  those  ships  ? 

Mr.  Douglas.  In  my  judgment,  I  woidd  not  make  one  of  those 
ships  less  than  S,000  or  10,000  tons  if  I  were  building  them. 

The  Chairman.  You  mean  gross  tons? 

Mr.  Douglas.  Yes;  l)ut  I  would  not  make  any  of  those  ships  less 
than  6,000  to  8,000  tons  dead  weight  capacity. 

Mr.  Saunders.  A  great  man^^  of  the  ships  operated  by  foreign 
capital  are  operated  as  tramp  ships,  and  a  great  deal  of  the  traffic 
of  the  world  is  handled  by  tramp  ships  ? 

Mr.  Douglas.  Oh,  undoubtedly;  yes. 

Mr.  Saunders.  Take  one  of  these  ships,  operating  as  a  tramp,  and 
owned  by  American  capital.  The  first  handicap  that  she  would 
suffer,  as  I  understand  from  you,  in  competing  with  a  foreign  tramp, 
would  be  this  question  of  registration  at  the  canal  ? 

Mr.  Douglas.  That  might  be. 

Mr.  Saunders.  And  the  next  would  be  the  matter  of  wages.  In 
the  course  of  a  year,  suggesting  now  that  that  tramp  would  ply 
between  the  ports  that  a  foreign  competitor,  British  or  otherwise, 
would  ply  between,  what  would  be  the  difference  in  the  operating 


26         SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

cost  of  the  American  tramp  as  compared  with  the  foreign  tramp, 
just  approximately? 

Mr.  Douglas.  Those  are  technical  questions  which  are  very  diffi- 
cult for  a  man  who  has  never  run  ships  to  state.  There  are  men  in 
this  room  very  much  better  qualified  than  myself  to  give  you  that 
information,  and  they  are  going  on  the  stand,  I  believe,  to  be 
interrogated. 

Mr.  Saunders.  Well,  if  you  are  not  eciuipped  to  answer  the  ques- 
tion I  will  not  press  it. 

ilr.  Douglas.  I  have  studied  that  question  to  some  extent. 

Mr.  Saunders.  There  is  the  question  of  wages  that  American 
capital  undertaking  to  run  a  ship  would  run  up  against? 

Mr.  Douglas.  Yes. 

The  Chairman.  We  have  no  law  regulating  wages  in  American 
ports,  have  we  ? 

Mr.  Douglas.  Not  to  my  knowledge. 

The  Chairman.  So,  there  is  no  law  to  be  removed  to  remedy  that 
condition? 

Mr.  Douglas.  No;  but  the  fact  remains,  Judge,  that  the  Amer- 
ican wages  are  higher  than  the  wages  of  any  other  country  in  the 
world,  and  when  you  compare  them  with  the  Jap  wages  or  the  Nor- 
wegian wages,  it  would  make  a  very  heavy  difference  in  the  cost  of 
operation. 

Mr.  Saunders.  I  am  not  gainsaying  that,  but  I  just  want  to  de- 
velop the  fact  and  the  extent  of  it.  '  "V\Tiat  is  the  next  handicap,  num- 
ber three  ? 

Mr.  Douglas.  There  is  the  general  impression — it  has  been  con- 
tradicted by  some — that  the  space  allowed  is  better  or  larger  for 
American  seamen,  and  the  food  they  receive  in  some  cases  unques- 
tionably is  very  much  more. 

Mr.  Hardy.  You  know  that  the  space  allowed  is  not  less  ? 

Mr.  Douglas.  I  do  not  know  whether  it  is  or  not. 

Mr.  Hardy.  Do  you  not  know  the  law  on  that  ?  Do  you  know  that 
up  to  the  passage  of  the  seaman's  bid,  72  cubic  feet  was  allowed  on 
Ajnerican  vessels,  and  120  feet  on  English  vessels? 

Mr.  Douglas.  I  do  not  know;  but  I  do  not  assume  that  is  of 
gi-eat  importance,  the  question  of  a  little  space  one  way  or  another. 

The  Chairman.  In  the  seaman's  bill,  as  it  was  reported,  we  pro- 
vided for  increase  of  crew  space  from  72  to  100  feet.  Afterwards  we 
read  the  report  of  the  Commissioner  of  Navigation,  m  which  he  called 
attention  to  the  fact  that  on  foreign  vessels  the  crew  space  is  120  feet, 
and  we  thought  we  would  at  kuist  make  the  crew  space  on  American 
ships  equal  to  that  on  foreign  ships;  hence,  this  contention  that  that 
might  be  a  handicap  was  entirely  exploded,  because  our  laws  were  not 
so  hberal  as  foreign  laws,  and  so  far  as  the  food  is  concerned,  that  is 
all  moonshine,  because,  under  our  navigation  laws,  while  we  have  a 
very  elaborate  menu  set  out,  it  is  expressly  provided  that  the  captain 
and  the  crew  may  agree  on  it,  and  they  have  not  paid  any  attention 
to  the  law. 

Mr.  Douglas.  Notwithstanding  all  that,  wliich  somids  very  well, 
I  do  not  believe  it. 

The  Chairman.  It  is  true,  nevertheless. 

Mr.  Douglas.  I  will  take  the  Pacific  Ocean,  and  if  I  can  have  all 
Japs  or  all  Chinese,  practically,  and  onh^  a  few  men  to  man  her,  I 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         27 

think  if  you  aro  trying:  to  produce  the  results  with  American  seamen, 
you  will  find  I  will  walk  away  with  the  money. 

The  Chairman.  I  am  speaking  with  reference  particularly  to  the 
Atlantic.     I  will  agree  there  is  a  peculiar  situation  on  the  Pacific. 

Mr.  Hardy.  Is  there  not  a  law  requiring  American  seamen  on 
American  ships  ? 

Mr.  Douglas.  There  is  a  law  requiring  a  language  test. 

Mr.  Hardy.  That  was  not  there,  even,  until  last  year? 

Mr.  Douglas.  Mr.  Rhett,  of  South  Carolina,  is  chairman  of  that 
committee,  and  I  do  not  want  to  go  into  the  seaman's  hill,  because  I 
have  no  authority  to  discuss  it  in  any  way  whatever. 

Mr.  Hardy.  Even  with  the  language  test,  did  you  know  that  the 
vessel  China  with  a  Chinese  crew  passed  that  language  test  ? 

Mr.  Douglas.  I  believe,  Ky  the  kindness  and  the  indulgence  of  the 
Secretary,  they  did. 

Mr.  Hardy.  Do  you  know  that  Mi*.  Schwerin's  testimony  here  was 
that  his  Chinese  crews  did  understand  the  orders  of  the -officers? 
That  was  his  testimony  before  this  committee. 

Mr.  Douglas.  He  is  a  very  great  enthusiast  and  advocate  of  his 
proposition,  but  I  think,  as  I  say,  that  is  a  little  outside  of  my  sphere, 
to  go  into  the  seaman's  act. 

Mr.  Hardy.  You  at  least  know  that  if  that  law  does  interfere  it 
did  not  interfere  until  last  year,  when  it  was  passed  ? 

Mr.  Douglas.  I  admit  that.     Everybody  must. 

Mr.  Hardy.  You  say  it  is  bad  laws  that  have  prevented  our  mer- 
chant marine.  We  want  you  to  point  out  or  to  put  your  finger  on 
some  specific  law.  After  Judge  Saunders  gets  through  I  want  to  go 
into  that. 

Mr,  Saunders.  Those  are  three  handicaps  that  hinder  American 
capital  from  being  disposed  to  make  this  venture.  What  is  the  fourth 
one  that  you  have  in  mind,  if  you  remember? 

Mr.  Douglas.  You  will  romombor  that  it  is  only  recently,  as  the 
judge  says,  that  there  havo  boon  some  other  laws  passed.  You  did 
pass  a  law  allowing  American  citizens  to  build  abroad,  and  you  took 
off  the  limit  of  five  years. 

Mr.  Saunders.  Yes. 

Mr.  Douglas.  But  since  that  law  wa,s  passed  there  has  been  no 
opportunity,  by  reason  of  the  war  coming  on,  for  any  availing  of  that 
law. 

Mr.  Saunders.  I  know;  but  previous  to  that? 

Mr.  Douglas.  We  will  have  to  wait  to  see  whether  it  will  develop 
after  the  war  is  over. 

Mr.  Saunders.  That  is  not  in  the  wa}^,  at  an}'  rate. 

Mr.  Dol'GLAs.  No:  but  that  is  a  question  of  cost.     Again,  there  is  a 

freat  controversy— you  have  five  years'  limitation  to  build  your  ship, 
have  always  believed  and  still  believe  that  we  have  not  been  able 
to  build  in  this  country  within  40  to  50  per  cent  of  the  cost  of  a  ship 
as  against  a  European  builder. 

Mr.  Saunders.  But  that  can  not  possiblj'  be  any  difficulty  in  the 
future  for  this  reason,  because  if  we  can  buy  cheaper  abroad  than  at 
home,  we  can  do  it,  and  if  it  is  more  expensive,  there  is  no  reason  to 
go  abroad,  and  our  foreign  competitors  have  not  an^^  advantage  over 
us  in  that  respect.     What  is  the  ne  st  handicap  ? 


28         SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MEPiCHANT  MARINE. 

Mr.  Douglas.  You  are  dealing  in  the  future.  That  is  something 
that  I  am  a  little  careful  about,  because  I  do  not  know  anything  about 
it.  You  had  better  deal  in  the  past.  Do  not  let  us  get  into  the  realm 
of  speculation. 

Mr.  Saunders.  But  this  whole  scheme  is  for  the  future. 

Mr.  Douglas.  Yes;  but  you  are  theorizing. 

Mr.  Saunders.  No;  I  am  not  theorizmg. 

Mr.  Douglas.  Yes;  you  are. 

Mr.  Saunders.  Let  us  see  if  I  am.  I  am  trjang  to  find  out  what 
the  handicaps  are  that  exist  to-day  that  would  deter  American  capital 
from  entering  into  competition  on  the  deep  seas  in  the  way  of  tramp 
steamers  with  foreign  capital.  Now,  you  can  not  say,  with  respect 
to  that  competition,  that  a  law  which  has  been  repealed  is  a  present 
hindrance,  so  I  am  not  theorizing  at  all 'about  it.  What  is  the  next 
handicap  ? 

'Mr.  Douglas.  You  can  not  buy  or  build  ships  to-day  to  any 
extent,  you  know? 

Mr.  Saunders.  Yes ;  I  understand,  at  this  moment ;  but  I  mean,  so 
far  as  the  laws  are  concerned. 

Mr.  Douglas.  After  the  war  is  over,  if  their  shipyards  can  build 
cheaper  than  we  can,  very  naturally  Americans  vnW  go  there.  There 
is  no  doubt  about  that. 

Mr.  Saunders.  Then,  that  handicap  is  out  of  the  way? 

]Mr.  Douglas.  But  you  will  remember,  again,  that  we  are  in  a 
different  position  than  England,  for  instance,  for  she  is  the  best 
example  to  take.  You  have  to  look  at  facts  and  not  theories.  You 
exemphfied  the  fact  that  an  American  citizen  should  be  as  well  able 
to  sail  a  tramp  ship  as  anybody  else,  but  that  is  not  so.  The  law 
goes  according  to  nationality.  England  is  a  great  power;  she  has 
her  home  trade,  which  is  largely  export;  she  has  her  colonies  in  India; 
she  owns  Egypt,  and  she  has  New  Zealand,  and  South  Africa,  and 
pretty  soon  she  may  have  the  rest  of  the  world.  Now,  English 
people,  of  course,  trade  with  themselves;  they  had  been  in  this 
business  long  before  we  ever  dreamed  of  going  into  it;  even  when 
our  clipper  ships  were  in  the  water,  they  were  in  it;  and  since  then, 
of  course,  they  have  driven  us  off.  Take  all  these  Enghsh  ships 
going  to  all  these  English  colonies,  they  have  a  decided  advantage 
over  an  American  ship. 

Mr.  Saunders.  I  will  admit  that. 

Mi\  Douglas.  That  is  a  serious  handicap.  I  do  not  care  whether 
she  is  a  tramp  or  a  liner;  the  liner  has  a  gi-eat  advantage,  but  the 
tramp  still  has  a  considerable  advantage.  Take  the  people  who  load 
tramp  ships  and  do  not  load  linei-s  abroad.  They  have  their  afhUa- 
tions  in  Australia;  they  go  out  there  at  certam  seasons  of  the  year 
and  they  got  their  wool  cargoes,  and  they  go  from  Austraha  to  South 
Africa.  All  that  has  been  built  up  by  a  process  of  evolution,  cover- 
ing a  great  many  years. 

Mr.  Saunders.  I  admit  all  that. 

Mr.  Douglas.  You  say  you  admit  it,  but  you  do  not  admit  it.  It 
is  a  fact  which  is  overlooked  by  Congress. 

Mr.  Saunders.  You  will  agree  that  is  a  restatement  of  handicap 
No.  1? 

Mr.  Douglas.  No;  it  is  altogether  different. 


SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MEECHANT  MARINE.        29 

]VIr.  Saunders.  I  admit  the  force  of  all  that;  but  you  are  simply 
amplifying  what  you  have  already  stated,  namely,  that  as  a  result  of 
having  been  long  in  the  business  and  as  a  result  of  their  experience  in 
traduig,  and  because  of  the  trade  with  their  colonies,  they  have  that 
advantage,  and  I  admit  all  that,  but  I  am  trying  to  find  put  some 
additional  handicaps. 

Mr.  Douglas.  I  tliuik  you  have  admitted  enough  to  get  the  con- 
ditions that  exist. 

Mr.  Greene.  Do  not  England  and  other  foreign  countries  own 
termmals  and  warehouses  at  the  ports;  for  instance,  in  South  America- 
where  there  is  a  large  trade  wliich  we  hope  to  get,  have  the}^  not  estab- 
lished means  and  methods  of  reaching  the  ulterior  that  we  have  not, 
and  will  not  have  for  many  years  ? 

Mr.  Douglas.  They  own,  of  course,  a  very  much  better  system  of 
coaling  stations  than  we  do,  unquestionably,  but  whether  they  have 
any  advantage  going  uiland,  I  hardly  thijik  so;  not  so  far  as  my 
knowledge  goes. 

Mr.  Greene.  I  thought  they  did. 

Mr.  Douglas.  They  may  have;  but  not  to  my  knowledge. 

Mr.  Edmonds.  On  subsidies  m  the  preferential  freight  rates  the 
German  vessels  get  handicaps  against  our  American  ships. 

The  Chairman.  We  do  not  want  to  take  it  for  granted  that  is  a  fact. 

Mr.  Douglas.  Oh,  yes;  in  Germany  that  is  a  different  proposition. 
All  dockage  charges  at  our  ports  are  very  much  in  excess  of  what 
they  are  in  Germany  and  in  England. 

The  Chairman.  How  about  the  extra  officers  on  the  ships,  and  the 
water  tenders  required  on  freight  boats;  does  not  that  cost  us  more  ? 

Mr.  Douglas.  Yes;  it  costs  more  money,  and  that  emphasizes  one 
reason  why  I  am  in  favor  of  having  a  ship  run  in  accordance  with  the 
wishes  of  Congress,  flying  the  American  fla^;  but  if  she  docs,  then 
do  not  let  Congress  try  to  demand  certain  things  without  trying  to 
pay  for  them. 

Mr.  Saunders.  You  spoke  of  the  dockage  charges  being  higher. 
Do  not  those  foreign  ships,  when  they  come  in  heie,  have  to  pay 
those  dockage  charges  ? 

Mr.  Douglas.  Yes. 

Mr.  Saunders.  How  is  it  that  our  ships  will  be  at  any  disadvantage, 
then  ?  Our  tramp  ship  competing  with  the  English  tramp  ship  would 
have  to  pay  the  dockage  here,  I  assume,  and  the  dockage  charge  in 
England,  if  we  were  trading  between  the  United  States  and  England, 
and  would  not  an  English  competitor  trading  between  those  two  ports 
pay  exactly  the  same  charges  ? 

^Ir.  Douglas.  That  has  been  a  question  that  has  been  debated  in 
the  chamber  of  commerce.  I  claim,  from  all  the  statistics  I  could 
get,  she  would  not  have  to  pay  as  much. 

Mr.  Saunders.  Wliat  do  you  mean  ? 

Mr.  Douglas.  I  think  the  English  boat  gets  preferential  treatment. 
Understand,  that  is  disputed,  and  was  disputed  then;  but  I  believe 
that  the  English  ship  does  not  pay  what  the  American  ship  does,  or 
anything  like  it.  In  fact,  you  have  admitted  yourself  that  she  has  an 
extra  registration,  which  means  a  discrimination.  Take  a  difference 
of  1,200  tons  on  a  10,000-ton  ship  and  see  what  the  difference  amounts 
to. 

32910—16 3 


30        SHIPPING  BOARD^  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE. 

Mr.  Saunders.  I  have  not  admitted  anything,  and  you  and  I  are 
not  engaging  in  any  controversy  at  all. 

Mr.  Douglas.  No.     We  want  to  get  the  facts. 

Mr.  Saunders.  I  understand  you  to  say  that  you  do  not  state  it 

Positively,  but  that  it  is  your  impression,  upon  the  state  of  facts  that 
have  cited,  that  the  English  tramp  steamer  would  have  the  advan- 
tage over  the  American  tramp  steamer  in  that  she  would  get  prefer- 
ential consideration  at  English  ports  and  would  not  have  to  pay  as 
much  dockage  charges  as  the  American  tramp  ? 

Mr.  Douglas.  I  would  not  say  dockage  charges  alone,  because,  as 
I  stated,  there  is  a  difference  of  opinion  on  that  subject.  I  have 
never  been  able  to  get  the  absolute  facts  necessary  to  make  it  as  a 
definite  statement;  but  I  do  believe  there  is  some  little  difference 
in  the  charges,  and  that  we  do  not  get  the  same  treatment. 

Mr.  Saunders.  That  is  important.  Can  we  get  at  the  facts  with 
regard  to  that  ? 

Mr.  Douglas.  I  think  you  can  get  at  it  very  much  better  than  I 
can.     As  I  say,  it  is  denied,  but  I  do  not  accept  the  denial. 

Mr.  Saunders.  That  is  just  a  moot  question.  Are  there  any  other 
facts  you  have  in  mind  that  would  deter  American  capital  from  invest- 
ing in  a  tramp  ship  ? 

Mr.  Douglas.  I  think  you  have  been  into  it  enough  to  make  it 
apparent  to  my  mind,  if  not  to  yours. 

Ml*.  Saunders.  I  do  not  think  that  is  a  very  satisfactory  answer  to 
my  question. 

Ml-.  Douglas.  I  can  not  answer  it  in  any  other  way.  I  do  not  have 
anything  in  my  mind  very  special. 

Mr.  Saunders.  That  is  different. 

Ml*.  Douglas.  I  think  we  have  brought  out  enough. 

Mr.  Saunders.  The  question  of  whether  or  not  we  have  brought 
out  enough  is  not  involved.  I  am  trying  to  get  at  the  facts.  If  there 
are  any  other  handicaps  you  have  in  mind,  I  wish  you  would  state 
them. 

Mr.  Douglas.  I  do  not  know  of  any. 

'Mr.  Saunders.  Then  we  have  covered  the  three  handicaps  which, 
in  yom-  judgment,  will  deter  American  capital  from  investing  in  a 
tramp  ship  for  the  purpose  of  deep-sea  trading  ? 

Ml'.  Douglas.  Yes;  three  or  four  or  five. 

Mr.  Saunders.  Let  me  ask  you  about  another  feature  of  this  bill. 
You  have  pointed  out  that  the  number  of  ships  we  could  buy  would 
be  absorbed  in  the  lines  and  that  there  would  not  be  any  more  for 
promiscuous  trading.  What,  in  your  judgment  as  a  business  man, 
would  be  the  effect  on  business  conditions  of  the  number  of  ships 
operating  under  this  biU  ? 

Mr.  Douglas.  If  you  put  them  on  the  regular  lines,  it  seems  to  me 
the  condition  would  be  about  like  this,  you  would  simply  perpetuate 
the  control  of  ahen  shipping,  as  against  the  United  States.  There 
is  no  way  of  getting  around  that,  because  it  is  a  self-evident  fact. 
You  have  60  ships  you  are  going  to  utilize  on  these  lines;  you  put  on 
a  line  for  one  or  the  other  coast  of  South  America,  Africa,  or  Australia; 
you  have  the  right  to  fix  your  rates  if  you  operate  yourselves,  and  you 
will  fix  them,  and  we  presume  you  will  fix  them  fairly.  You  are  going 
to  run  six  boats  in  that  service;  that  would  probably  be  what  you 
would  have  to  run  to  have  the  service  every  two  weeks.     Do  you 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         31 

think  the  foreigners  care  anything  about  whether  you  put  those  six 
boats  on  or  not?  No;  the}'  do  not.  In  my  opinion  the  ahen  lines 
would  be  only  too  glad  to  have  you  put  those  boats  on,  because  you 
would  perpetuate  their  control.  You  will  not  carry  more  than  10 
per  cent  of  the  trade,  and  you  will  establish  rates  which,  in  all  prob- 
ability would  be  fair  rates.  Now,  what  is  the  foreigner,  who  is  going 
to  run  those  boats  with  the  other  85  or  90  per  cent,  going  to  do? 
He  has  got  to  do  one  or  two  things;  if  your  rates  are  too  low  for  him, 
then,  of  course,  he  is  not  going  to  enter  into  competition  at  that  mo- 
ment with  you;  he  will  let  your  boat  get  away,  and  then  he  will 
fix  the  rate.  You  have  kept  private  enterprises  from  going  on  the 
berth,  and  you  have  left  the  berth  to  the  mercy  of  the  alien  ship. 
Then,  in  my  judgment,  if  the  Government  should  try  to  operate 
them,  they  are  not  only  going  to  fix  the  rate  too  high,  but  they  are, 
perhaps,  going  to  have  a  ship  tJiat  will  not  compete.  The  honorable 
Secretary  says  we  should  have  16-laiot  ships  or  14-knot  ships  for 
Buenos  Aires. 

Hon.  W.  G.  McAdoo  (Secretary  of  the  Treasury).  I  have  not 
fixed  any  speed. 

Mr.  Douglas.  I  would  fully  agi'ee  with  you  if  you  had. 

Secretary  McAdoo.  No;  but  1  wanted  to  correct  you. 

Mr.  Douglas.  I  was  approving  it,  if  you  had.  Wliat  are  you 
gomg  to  do  ?  The  alien  steamship  owner  is  sending  his  ship  there 
regularly,  too,  with  a  speed  of  say,  9  knots.  He  has  a  great  big  ship 
of  ten  or  twelve  thousand  tons,  with  every  possible  cubic  foot  avail- 
able for  cargo  and  dead  weight,  with  a  big  deck  load,  and  you  may 
not  have  quite  so  good  a  ship.  He  will  make  money,  and  good  big 
money,  too,  while  you,  operating  under  the  Government  system, 
will  lose  money,  and  I  do  not  believe  the  Government  is  smiply  going 
into  this  business,  if  they  do  go  into  it,  to  throw  money  away.  I  am 
not  advocating  that  you  should,  but  I  think  you  will  put  yourselves 
in  a  very  grave  position,  because  to-day  there  is  a  chance  that  some 
see,  if  we  live  long  enough,  by  American  enterprise  to  come  in  and 
help  run  those  lines,  and  what  I  have  been  trying  to  point  out  to 
Judge  Alexander,  who  has  been  very  fair  and  courteous  to  me  always, 
is  that  you  want  the  American  public  to  come  in;  you  do  not  want 
$50,000,000  of  Government  money  to  be  spent,  and  then  have  no 
money  left.  You  want  to  attract  $500,000,000  of  the  public  money, 
and  if  you  start  a  line  to  South  America,  start  it  on  a  safe  basis,  so 
that  if  that  line  pays  American  enterprise  and  American  capital, 
they  will  be  able  to  supplement  that  line  and  put  more  vessels  on, 
which  they  can  build  abroad  or  build  here,  according  to  your  judg- 
ment, and  build  up  the  line.  The  Government  will  not  be  able  to 
do  it,  because  they  have  not  any  more  money.  One  Son  a  tor  said 
last  year — or  a  member  of  the  House — he  said,  "If  thi  bsill  passes, 
I  am  going  to  raise  Cain  if  I  do  not  get  my  quota  of  ships  for  my  part 
of  the  world,  where  we  can  send  them  to  foreign  ports."  He  was  on 
the  west  coast,  I  believe. 

Mr.  Saunders.  I  understood  you  to  say  that  the  condition  in  the 
ship-yards  of  the  world  to-day  is  such  that  there  would  be  no  immedi- 
ate chance  of  having  the  ships  built  ? 

Mr.  Douglas.  Very  little. 

Ml'.  Saunders.  With  respect  to  the  purchase  of  ships  at  the 
present  prices  of  ships  in  the  world,  are  they  very  high  as  a  result  of 
that  ? 


32         SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Douglas.  Yes,  sir;  very  high.  You  can  not  buy  many  ships. 
You  can  buy  some. 

]VIr.  Saunders.  Suppose  they  can  be  purchased  at  these  high  rates 
by  the  expenditure  of  the  money  contemplated  by  the  bill;  now, 
suppose  they  are  leased  to  private  shipowners  to  operate;  if  they 
are  leased  to  these  private  shipowners  on  such  rates  as  will  represent 
a  profit  to  the  Government,  what  advantage,  then,  would  that  ship- 
owner or  that  lessee  have  over  any  other  person  with  capital  who 
wanted  to  lease  a  ship  anywhere  in  the  world  and  go  into  the  deep 
sea  business  ? 

Mr.  Douglas.  He  would  not  have  any. 

^ir.  Saunders.  If  they  are  leased  to  these  people  who  are  going 
to  lease  them  on  terms  that  will  represent  a  loss  to  the  Government 
so  far  as  its  investment  is  concerned,  what  would  that  be  except  a 
subsidy  to  that  individual  lessee  ? 

Mr.  Douglas.  Certainly,  that  would  be  a  subsidy  to  him,  un- 
questionably. 

Ml'.  Saunders.  That  is  all. 

Mr.  Hardy.  I  wish  to  get  clearly  and  candidly  your  statement: 
Outside  of  the  question  of  measurements,  of  which  you  spoke  just 
now,  what  handicap,  prior  to  the  passage  of  the  seaman's  bill,  was 
there  by  law  on  the  American  merchantman  in  the  deep-sea  trade  ? 

!Mr.  Douglas.  I  never  made  a  very  thorough  study  oi  the  seaman's 
act.  Like  a  good  many  other  laymen,  perhaps,  with  a  good  deal  of 
ignorance,  I  have  condemned  it.  I  would  liKc  to  answer  the  judge 
on  those  questions,  so  far  as  the  seaman's  act  is  concerned,  but,  to  be 
candid,  I  have  never  given  it  proper  study  and  attention  which  it 
should  have. 

Mr.  Hardy.  You  will  allow  me  to  say  something,  and  then  you  may 
comment  upon  it,  if  you  desire. 

Mr.  Douglas.  Yes. 

Mr.  Hardy.  For  two  yeai-s  I  have  been  trying  to  get  somebody 
to  put  his  finger  on  a  single  American  law  that  is  a  handicap  to  the 
American  trade  on  the  high  seas.  ^Mr.  Dollar  here  two  years  ago 
stated  that  our  measurements  subjected  us  to  greater  charges  m 
foreign  ports  than  foreign  measurements.  That  was  the  first  time 
that  was  ever  called  to  the  attention  of  this  committee  or  any 
member  of  it.  I  asked  him  the  question  had  he  ever  sought  to 
have  our  laws  on  that  amended  or  changed,  and  he  said  he  never 
had.  Mr.  Chamberlain  differs  with  him  about  it,  but  I  am  not  going 
into  that,  and  I  am  permitting  that  to  stand  as  an  objection  under 
our  law.  I  have  sought  from  every  witness  who  has  come  before 
us  to  get  him  to  point  out  some  one  of  our  laws  that  is  a  handicap, 
but  no  one  has  ever  done  it.     Can  you  do  it  ? 

Mr.  Douglas.  Judge.  I  would  be  glad  to  later  on  advise  you  by 
letter  on  that  point,  and  I  think  it  is  very  possible  to  do  it,  and  I 
think  you  can  get  all  the  men  3^ou  want  who  are  well  quahfied  to 
give  you  that  advice  in  New  York,  Boston,  and  Philadelphia. 

Mr.  Hardy.  I  have  asked  all  of  them  who  have  come  before  this 
committee,  and  none  of  them  have  told  me. 

Mr.  Douglas.  I  am  afraid  j^ou  have  asked  them  with  a  ])rejudged 
impression. 

Mr.  Hardy.  No. 


I 


SHIPPING  BOARD,  NAVAL  AUXILIAUV,  AND  MERCHANT  MARINE.         S'.l 


Mr.  DoUGLA.s.  I  know  you  are  ti  very  able  man,  but  i  know  you 
have  vorv  strong  convictions,  and  I  think  you  ought  to  have  some 
Httlo  reasoning  on  that  subject  from  our  standpoint. 

Mr.  Hardy.  Mv  })rojudgmejit  does  not  prevent  you  from  pointing 
out  the  lian(Hcaps. 

Mr.  DoiGLAS.  I  have  given  a  various  number  of  handicaps. 

Mr.  Hardy.  What  are  the  various  number  of  liandicaps  ( 

Mr.  Doi'(iLAs.  I  refer  you  to  the  record.     ^Vhat  is  tbe  use  of  going 
over  it  again  ? 
f  Mr.  Hardy.  The  wages  are  not  fixe«l  by  law,  are  they  ? 

Mr.  Douglas.  Thev  are  fixed  l)y  usage.     That  is  just  as  good  as 
i  law.  '  ' 

Mr.  Hardy.    I  am  not  asking  you  what  is  as  good  as  law. 

Mr.  Douglas.  I  liave  answeretl.  and  you  do  not  agree.  I  say 
usage  is  law. 

Mr.  Hardy.  We  can  not  rej^eal  usages 

Mr.  DoKJLAS.  Xo;  but  it  exists, 

Mr.  Hardy.  Have  your  people — the  shipowners — ever  come  before 
Congress  in  the  last  20  years  and  asked  to  have  any  of  the  so-called 
an ti( plated  laws  repealed  ( 

Mr.  Douglas.  I  su])])Ose  there  were  not  enough  to  come. 

Mr.  Hardy.  You  seem  to  be  getting  together  pretty  thoroughly 
every  lime  we  meet.  Have  you  ever  asked  for  the  re])eal  of  any 
so-called  antiquated  navigation  laws'! 

Mr.  Douglas.  I  <io  not  know.  I  do  not  own  even  a  row})oat 
myself. 

Mr.  Hardy.  But,  I  say,  have  any  of  your  people  ever  come  before 
Congress  and  asked  to  have  any  of  these  so-caUed  antiquated  navi- 
gation laws  repealed  ? 

Mr.  Douglas.  I  do  not  know,  Judge. 

Mr.  Hardy.  You  have  always  talked  about  antiquated  American 
navigation  laws,  and  I  am  trying  to  get  you  to  point  out  one  of  them. 
You  liandle  that  phrase  as  well  as  everybody  else. 

Mr.  Douglas.  I  do. 

Mr.  Hardy.  Then,  what  are  they  ? 

Mr.  Dol'Glas.  They  are  so  heterogeneous  and  so  scattered 

Mr.  Hardy  (interposing).  So  numerous  that  you  can  not  mention 
any  *  ' 

^Ir.  Douglas.  I  think,  as  the  Secretary  says,  they  are  being  put  in 
better  shape,  and  if  the  shipping  board  will  show  me  that  there  are  no 
navigation  laws,  I  will  admit  it. 

The  Chairman.  I  am  going  to  make  this  suggestion  in  all  kindness, 
because  I  think  all  the  members  of  the  committee  will  be  interested, 
because  the  seaman's  biU  was  reported  from  this  committee,  if  I  may 
say,  not  with  unanimity,  but  with  practically  unanimity.  I  thiuK 
Judge  Saunders  was  opposed  to  it. 

Mr.  Saunders.  Some  provisions  of  it. 

The  Chairman.  It  passed  the  House  unanimously;  there  was  not  a 
vote  against  it.  Now,  I  woidd  like  for  the  Chamber  of  Commerce  of 
the  United  States  to  pick  their  expert  who  is  firmly  of  the  opinion  that 
the  seaman  s  bill  should  be  repealed  and  have  him  come  oefore  this 
committee  and  state  wdiy. 


34         SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MEECHANT  MAEINE. 

Mr.  Douglas.  I  do  not  know,  Judge,  whether  you  have  seen  the 
referendum  paper,  Mr.  Rhett,  whom  we  expect  to  be  our  next  presi- 
dent, had  the  matter  in  charge  as  chairman  of  that  committee.  Now, 
he  has  prepared  or  his  committee  has  prepared  a  referendum.  I  have 
not  read  the  paper,  but  I  think  if  you  will  get  Mr.  Rhett  up  here,  he 
is  the  man  you  want  on  that  subject,  so  far  as  I  know. 

The  Chairman.  I  do  not  wish  to  suggest  anybody,  but  while  your 
chamber  was  in  session  here,  and  considering  that  question,  you 
had  the  opportunity  to  secure  the  advice  of  the  members  of  this 
committee,  and  others,  who  know  something  about  the  seamen's 
law;  but  men  discussed  it — and  cussed  it,  too — who  did  not  know  a 
thing  on  earth  about  it.  It  may  have  its  defects;  I  will  not  say  it 
has  not,  but  for  the  Chamber  of  Commerce  to  say  it  should  be  re- 
pealed, when  they  ought  to  know  that  section  14  of  that  law  contains 
the  International  Convention  on  Safety  of  Life  at  Sea,  which  was 
agreed  to  by  all  the  maritime  nations  of  the  earth,  it  shows  how 
absurd  their  position  is. 

Mr.  Douglas.  I  can  only  say  that  I  am  very  sorry  if  they  have 
made  any  statements  that  are  not  correct.  I  am  only  responsible 
for  my  own  statements,  and  I  was  not  on  that  committee. 

The  Chairman.  I  think  they  should  come  before  the  committee 
and  give  us  the  benefit  of  their  views. 

Mr.  Douglas.  I  will  take  great  pleasure  in  stating  your  viewpoint 
on  that  to  Mr.  Fay  and  to  Mr.  Rhett. 

Mr.  Byrnes.  The  Charleston  (S.  C.)  Chamber  of  Commerce  is  one 
of  your  constituent  organizations,  is  it  not? 

Mr.  Douglas.  I  can  not  answer  that;  I  do  not  know  that  myself. 

Mr.  Byrnes.  Did  you  not  say  that  Mr.  Rhett  would  probably  be 
your  next  president? 

Mr.  Douglas.  Yes. 

Mr.  Byrnes.  Is  not  Mr.  Rhett  president  of  the  Charleston  (S.  C.) 
Chamber  of  Commerce? 

Mr.  Douglas.  I  do  not  know. 

Mr.  Byrnes.  I  can  tell  you  that  he  is  a  member  of  that  organization. 
With  regard  to  the  value  of  your  referendum,  I  want  to  ask  this: 
Inasmuch  as  this  committee  has  before  it  a  bill  reguln  ting  compulsory 
pilotage,  the  Charleston  (S.  C.)  Chamber  of  Conmierce  had  presented 
here  at  a-  meeting  last  week  a  resolution  requesting  this  committee 
to  report  that  bill,  and  this  week  the  committee  has  before  it  a  resolu- 
tion from  the  same  chamber  of  commerce,  asking  us  to  vote  against 
the  1)ill  which  it  favored  the  week  before.  Do  you  not  think  that 
there  is  some  possibility  that  if  the  framer  of  this  bill  should  appear 
before  the  Charleston  Cbani]>er  of  Commerce,  and  some  other  organi- 
zations of  that  character,  they  might  behav-e  in  like  manner,  and 
send  resolutions  up  here  asking  us  to  vote  for  the  bill? 

Mr,  Douglas.  Of  course,  I  can  not  answer  those  questions.  My 
advocacy  of  the  chamber  of  commerce  is  along  the  lines  of  the  work 
they  are  trying  to  do.  The  Chamber  of  Commerce  of  the  United 
States  can  not  regulate  the  whole  business  of  this  country;  they  recom- 
mend what  they  think  is  best,  and  we  hope  that  it  will  eventually  be 
of  value  to  the  country.  If  there  is  nothing  else,  I  would  like  to'  get 
down  to  the  Pan  American,  if  I  can. 

The  Chairman.  I  thank  you  very  much,  Mr.  Douglas,  for  coming 
here. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         35 

Mr.  Douglas.  I  just  want  to  say  that  I  thank  the  two  Secretaries 
for  what  they  have  done,  and  I  want  to  say  that  I  realize  those 
gentlemen  have  done  everything"  the}'  could  to  stir  up  jjublic  opinion 
and  create  a  desire  to  have  this  subject  thoroughly  investigated 
throughout  the  country,  and  I  urn  sure  that  tlie  chamber  of  com- 
merce appreciates  their  efforts,  and  I  am  sure  that  the  public  does, 
and  although  we  may  not  agree  with  them,  and  may  differ  with 
them  on  some  propositions  in  relation  to  the  question,  I  want  them 
to  feel  that  they  have  our  sympathy,  and  that  we  are  entirely  in 
accord  with  them  in  trying  to  reach  a  fair  conclusion.  I  thank  you 
very  much. 

Secretary  McAdoo.  ^Ii".  Chairman,  may  I  say  just  a  word  to  the 
committee  ? 

The  Chairman.  Yes, 

Secretary  McAdoo.  I  came  here  this  mornmg  with  the  expectation 
that  I  would  have  the  opportunity  of  answering  any  questions  ohat 
the  conmiittee  might  vlesire  to  ask  me,  and  to  make  a  statement 
about  the  pending  bill,  but  hearing  that  Mr.  Douglas  was  here 
attendhig  a  meeting  of  the  chamber  of  commerce,  I  yielded  to  him, 
and  I  regret  very  much  to  say  that  my  engagements  are  of  such  an 
imperative  character  ^  that  I  can  not  possibly  tippear  before  the 
committee  to-day.  I  will  be  very  glad  if  you  will  give  me  some  other 
day. 

(After  informal  discussion  it  was  understood  that  IVIr.  McAdoo  will 
appear  before  the  committee  on  Wednesday,  February  16,  1916,  and 
the  committee  thereupon  took  a  recess  until  2  o'clock  p.  m.) 

AFTER    RECESS. 

The  committee  reconvened  at  2  o'clock  p.  m. 

The  Chairman.  Gentlemen,  we  will  proceed  with  the  hearing. 

STATEMENT  OF  HON.  WILLIAM  C.  REDFIELD,  SECEETAEY  OF 

COMMERCE. 

Secretary  Redfield.  Mr.  Chairman,  in  order  to  save  the  time  of 
the  committee  it  would  seem  to  me  that  I  might  briefly  touch  upon 
certain  points  raised  by  Mr.  Douglas  this  morning  and  then  briefly 
describe  the  actual  conditions  of  our  merchant  marine  as  it  is  to-day 
and  the  very  extraordinary  facts  in  relation  to  it  out  of  which  con- 
ditions, as  well  as  out  of  current  business  conditions,  this  measure 
arose,  and  then  taking  up  the  measure  try  to  show  what  is  attempted 
to  be  done  by  it.  If  I  may,  then,  briefly  speak  of  certain  points 
raised  by  Mr.  Douglas,  I  want  to  say  that  there  is  no  disadvantage, 
either  as  regards  the  Panama  Canal  or  elsewhere,  in  the  matter  of  the 
registered  tonnage  of  American  shipping.  All  vessels,  as  far  as  their 
measurements  are  concerned  in  the  Panama  Canal,  are  treated  alike, 
the  Panama  Canal  rules  applying  to  every  vessel  of  every  nationality 
in  the  same  way,  and  as  regards  the  rest  of  the  world,  the  rules  used 
by  the  United  States  are  substantially  the  rules  of  Great  Britain, 
with  the  difference  that  in  certain  details  we  are  a  little  more  lenient 
than  Great  Britain  and  do  not  make  ships'  tonnage  quite  as  large  as 
her  rules  do.  In  that  respect  an  American  ship  would  be  at  an 
advantage  rather  than   a  disadvantage  wherever  any  impost  was 


36         SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

placed  upon  tonnage.  Mr.  Chamberlain,  the  Commissioner  of  the 
Bureau  of  Navigation,  is  here  and  he  has  that  matter  entirely  at  his 
tongue's  end  and  would  be  very  glad  to  give  the  information  in  detail. 

Tiie  Chairman.  Right  in  that  connection  I  will  say,  after  you  have 
concluded  your  statement,  Mr.  Secretary,  I  have  requested  Mr.  Cham- 
berlain to  appear  before  the  committee  and  I  would  be  very  glad  if 
every  member  would  be  present  at  that  time,  particularly  the  new 
members  of  the  committee.  He  will  tell  what,  if  any,  antiquated 
navigation  laws  we  have  and  if  there  are  any  discriminations  against 
American  shipping  in  the  matter  of  measurements  of  vessels  in  foreign 
ports. 

Secretary  Redfield.  May  I  add,  Mr.  Chairman,  in  that  connection, 
that  the  Bureau  of  Foreign  and  Domestic  Commerce  in  our  depart- 
ment has  caused  to  be  collected  the  navigation  laws  of  all  the  leading 
maritime  countries,  and  they  are  now  at  the  service  of  the  committee. 
In  so  far  as  they  relate  to  the  laws  of  foreign  countries  they  have  been 
verified  by  the  officials  of  those  countries,  and  for  the  first  time  the 
entire  subject  has  been  presented  in  one  pamphlet. 

Mr.  Hardy.  When  were  they  sent  to  the  Members  '^ 

Secretary  Redfield.  Day  before  yesterday  in  the  evening,  when 
they  first  came  out.  . » 

The  Chairman.  That  is  right. 

Secretary  Redfield.  I  may  say  also,  Mr.  Chairman,  that  a  few 
months  ago,  having  reference  to  what  Judge  Hardy  said  this  morning, 
I  had  in  my  office  a  group  of  gentlemen  representing  several  of  the 
largest  American  steamship  interests.  I  asked  them  what  changes 
they  desired  made  in  the  navigation  laws  and  received  no  answer. 
None  of  them  was  willing  to  suggest — none  of  them  did  suggest  any 
changes  as  desirable.  I  have,  as  Judge  Hardy  said  he  had  done, 
sought  for  a  year  past  patiently  to  get  from  any  steamship  company 
or  any  person  familiar  with  nautical  matters  a  statement  as  to  what 
change  they  desired  in  the  navigation  laws,  and  thus  far  I  have  failed 
entirely  to  get  a  definite  suggestion  as  to  what  was  wanted. 

Mr.  Hardy.  Right  at  that  point,  if  you  will  allow  me:  Neverthe- 
less, for  the  last  10  years  you  have  been  hearing  talk  about  our  mer- 
chant marine  disappearing  on  account  of  our  antiquated  navigation 
laws? 

Secretary  Redfield.  Yes,  indeed.  I  have  written  back  to  ask  the 
gentlemen  who  complained  of  the  navigation  laws  what  suggestions 
they  had  to  make  as  to  changes.  1  do  not  recall  receiving  a  reply. 
As  regards  the  facts  concerning  the  oriental  crew  of  the  steamship 
China  under  the  seaman's  law,  1  have  the  original  report  of  the  sur- 
veyor of  customs  of  the  city  of  San  Francisco,  and,  with  the  com- 
mittee's approval,  will  have  it  put  in  the  record.  I  will  read  the  section 
of  it  which  has  reference  to  this  matter.     It  is  dated  January  11,  1916: 

I  devoted  much  of  the  day  Wednesday  and  most  of  the  night  attf^ntively  listening 
to  the  questioning  of  the  (  hinese  cr^^w  by  the  officers  of  the  steamship  China  in  the 
presence  of  the  three  prot.  stants,  Messrs.  Patrick  Flynn,  Paul  Scharrenberg,  and 
Eugene  Steidle.  I  thoroughly  realized  the  importance  of  the  proceeding,  and  was 
keeyily  al'^rt  in  an  effort  to  be  completely  impartial  and  fair.  My  conclusions  were 
that  out  of  the  32  men  employed  in  the  deck  d<  partment  6  failed  the  requisite  knowl- 
edge of  the  language  of  thiir  officers,  also  1  man  in  the  steward's  department  failed  out 
of  the  57  employed,  and  28  men  in  the  engineer's  d'  partment  were  deficient  out  of  a 
total  of  65  employees.  The  following  day  I  was  pres-nt  at  the  examination  of  the  20 
Filipinos,  of  whom  12  were  s'^lected.  which  was  the  necessarv  number  to  fill  the  quota 
essential  in  the  engineer's  department.     That  afternoon  the  China  sailed  at  3  o'clock, 


SHIPPING  BOAED^  NAVAL  AUXILIARl',  AND  MERCHANT  MARINE.         37 

two  hours  after  the  scheduled  time.  Later  the  manner  of  conducting  the  hearing 
elicited  congratulations  both  from  the  labor  men,  -who  were  the  protesfants,  and  the 
owners  of  the  steamship  company.  In  truth,  the  steamship  company  people  publicly 
announced  that  they  immediately  intended  to  purchas?  three  additional  steamera 
in  view  of  the  treatment  accorded  them  by  the  Government  officers. 

Mr.  Hardy.  That  was  the  language  test  contamed  in  section  13  of 
the  seaman  bill  ? 

Secret aiy  Redfield.  Yes,  sir;  that  was  the  former  Pacific  Mail 
steamship  China,  with  presumably  the  same  crew  that  she  had  under 
the  Pacific  Mail  Co.  She  is  now"  ow^ned  by  the  China  Mail  Steams  hip 
Co.,  wdiich,  I  am  informed,  is  capitalized  by  Chinese  merchants  in 
(he  city  of  San  Francisco.  The}"  have  since  attempted  to  purcijase 
(he  Government  transport  Justin,  and  I  thiidv  they  intend  to 
purchase  it. 

Mr.  Hardy.  As  far  as  you  laiow ,  is  there  any  varying  from  a  right 
construction  of  this  law  to  make  it  more  lenient  ? 

Secretary  Redfield.  I  took  the  trouble  to  consult  the  statements 
made  in  debate  by  the  members  of  this  committee,  including  the 
statements  of  the  chairman  of  the  committee  and  yourself,  and  the 
conclusion  which  had  been  reached  by  the  law"  ofRcere  of  the  Depart- 
ment of  Commerce  and  by  myself  before  I  read  the  debates  w"as  con- 
firmed by  the  statements  made  by  this  committee  in  the  debates. 

Mr.  Hardy.  So  that  the  construction  placed  upon  that  bill  by 
your  department  was  the  construction  that  v/as  understood  to  apj)ly 
to  it  by  the  advocates  of  the  bill  when  it  was  passed  ? 

Secretary  Redfield.  It  was. 

Mr.  Hardy.  The  reason  I  asked  that  question  is  that  it  has  been 
occasionally  said  by  somebody  w"ho  has  been  abusing  the  bill  that 
your  department  has  failed  to  construe  what  the  huv  meant,  and 
that  it  clid  not  mean  w^hat  you  construed  it  to  mean. 

Secretaiy  Redfield.  I  have  heard  that  statement  made.  In  the 
matter  of  the  cost  of  operating  ships,  let  me  say  that  there  is  a  very 
large  amount  of  sw"eeping  and  general  statements  made  and  very  little 
detail  given.  The  cost  of  tw"o  ships  of  the  same  line,  of  the  same  size, 
and  of  the  same  w^ork  is  not  alike.  A  w^asteful  or  negligent  captain 
or  steward  can  radically  alter  the  cost  of  operating  a  ship.  It  is  quite 
as  important,  and  perhaps  in  some  respects  more  important,  to  know 
what  a  ship  costs  at  the  dock  as  it  is  to  know  what  it  costs  when  she 
is  at  sea.  To  illustrate  that,  let  me  say  that  I  have  an  acquaintance 
who  is  the  superintendent  of  one  of  the  large  steamship  companies 
which  utilizes  Norw^egian,  English,  and  American  freight  steamers. 
I  sent  £or  him,  because  I  knew  he  would  tell  me  the  truth,  and  I 
talked  to  him  very  frankly  about  the  cost  of  operating  the  vessels. 
He  said  what,  of  course,  is  obvious,  that  the  cost  of  operating  a  ship 
depends  very  largely  upon  her  equipment,  and  that  his  experience 
was  that  a  Nomvcgian  vessel  cost,  as  far  as  outlay  w"as  concerned, 
about  $500  a  month  less  than  an  American  ship  of  the  same  size  and 
capacity,  but  that  since  the  Norwegian  vessel  in  company  with  the 
European  vessels  generally  w"as  equipped  wdth  single  winches  for  each 
hatch  and  was  not  erpiipped  w"ith  side  ports,  the  American  vessel  took 
two  days  less  in  port  at  each  end  of  her  voyage,  and  consequently  in 
going  to  points,  say,  four  or  six  days  distant  made  a  complete  extra 
voyage  per  annum  more  than  the  Norwegian  ship,  and  as  a  result 
she  earned  as  much  as  the  Norwegian  vessel  did.  The  American 
ship,  I  neglected  to  state,  has  double  winches  and  is  equipped  with 


38         SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

side  ports.  Consequently  her  idle  time  at  the  dock  is  greatly  reduced. 
I  might  say  that  that  is  a  problem  upon  which  so  much  brains  has 
been  spent  in  connection  with  the  lake  traffic — to  reduce  the  idle  time, 
which  is  the  nonearning  time  of  the  ship.  Furthermore,  his  expe- 
rience was  that  upon  the  Norwegian  ship  it  was  impossible  to  get 
the  best  class  of  seamen  because  the  accommodations  were  so  bad 
better  men  sought  the  better  ships;  that  at  the  end  of  20  years  there 
was  not  much  left  of  the  Norwegian  ship,  whereas  the  American  vessel 
was  good  for  10  years  more,  under  ordinary  care;  that  from  every 
point  of  view,  as  a  practical  man,  speaking  for  himself  personally  and 
not  for  his  company,  he  would  rather  have  American  vessels  in  the 
freight  traffic  than  foreign  ships.     That  was  in  the  fall  of  1915. 

The  statement  was  made  that  we  are  not  able  to  build  within  40 
per  cent  or  50  per  cent  of  the  foreign  price.  I  may  have  something 
to  say  about  that  a  little  later  on,  but  I  point  out  to  the  committee 
that  ship  plates  are  absolutely  cheaper  in  the  United  States  in  or- 
dinary times  and  structural  steel  of  that  character  is  made  more 
cheaply  here  than  in  any  other  country  in  the  world,  our  capacity 
being  so  vastly  larger  than  that  of  Great  Britain,  Germany,  and 
France  put  together  that  we  produce  steel  of  that  character  more 
cheaply  than  it  is  made  in  other  countries. 

As  to  there  being  conditions  which  deter  American  capital  from 
entering  into  shipping  business,  I  shall  have  the  pleasure  of  pointing 
out  that  American  capital  is  entering  into  shipping  at  an  unprece- 
dented rate,  that  it  has  never  entered  into  it  as  rapidly  in  the  history 
of  our  country  as  it  has  in  the  past  year,  and  is  only  deterred  at 
present  by  the  inability  to  get  ships  built  as  fast  as  they  need  them. 

The  point  was  made  as  to  the  advantage  of  British  ships  all  over 
the  world,  through  the  presence  all  over  the  world  of  British  invest- 
ments. That  is  in  a  measure  true.  It  is,  of  course,  a  fact  that 
England  has  investments  outside  of  her  own  territories  of  about 
$20,000,000,000.  They  derive  a  great  advantage  from  dealing  in 
foreign  lands  with  Englishmen  or  Scotchmen.  The  remedy  for  that 
does  not,  however,  lie  within  the  scope  of  the  merchant  marine,  but 
is  to  be  sought  in  tlie  extension  of  American  banking  and  investment 
facilities  abroad,  and  that  process  is  going  on.  There  have  been 
American  banks  established  in  many  foreign  ports  in  the  past  year, 
due  to  the  Federal  reserve  law  and  new  American  investments  are 
being  made  in  various  parts  of  the  world. 

The  reason  why  the  Secretary  of  the  Navy  and  the  Secretary  of 
Commerce  were  put  upon  the  board  proposed  by  this  bill  is  because 
they  represent  the  two  great  maritime  departments  of  the  Govern- 
ment. We  need  hardly  say  what  the  Secretary  of  the  Navy  has  in 
the  way  of  vessels.  The  Department  of  Commerce  had,  upon  the 
first  of  the  year,  136  vessels  in  operation,  not  counting  smaU  launches, 
and  7  building,  making  143  ships  of  its  own  on  almost  all  the  oceans, 
and  designing  our  own  vessels  and  familiar  with  their  repair  and  con- 
struction. It  was  for  that  reason  thought  desirable  that  whatever 
might  be  gained  from  touch  with  the  civilian  maritime  world  through 
this  board  should  be  supplemented  by  all  that  the  Government  had 
in  the  way  of  maritime  work  of  its  own,  Ivtiowing  that  through  the 
Secretary  of  the  Treasury  we  should  be  able  to  get  the  assistance  of 
the  splendid  service  commanded  by  my  friend,  Capt.  Bertholf, 
and  also  the  aid  of  the  War  Department  running  its  own  fleet  of  trans- 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         39 

ports.  The  purpose,  then,  was  simply  to  unite  all  that  was  best  in 
private  as  well  as  in  public  knowledge  in  the  development  of  this 
scheme.  Speaking  for  myself,  if  I  may  do  so,  there  would  be  no 
objection  on  my  part  to  having  myself  ehminated  from  the  board,  if 
the  committee  thinks  it  best. 

The  Chairmax.  Well,  the  Department  of  Commerce  is  charged 
with  the  administration  of  our  navigation  laws,  is  it  not  ? 

Secretary  Redfield.  Yes;  it  is. 

The  Chairman.  And  presumably  knows  more  about  them  than  any 
other  branch  of  the  Government  ? 

Secretary  E-edfield.  The  suggestion  was  made  about  this 
$50,000,000  not  being  sufficient  to  go  a  great  ways,  but  I  think  it  was 
forgotten  that  this  money  may  be  used  in  large  part  over  and  over 
again,  and  we  should  be  very  glad  to  see  the  bill,  if  it  is  not  perfectly 
clear  in  that  respect,  made  so  in  this  way:  That  if  a  ship  is  sold  tho 
funds  received  from  the  sale  of  that  ship  may  be  utilized  for  the 
further  pursuance  of  the  objects  of  the  bill. 

The  Chairman.  I  will  say  at  this  point  that  I  have  an  amendment 
to  propose  to  make  that  perfectly  clear. 

Secretary  Redfield.  I  think  now  I  may  pass,  if  the  committee  will, 
to  the  condition  of  the  merchant  marme  at  the  present  time,  and 
certain  very  interesting  and  notable  developments  that  are  taking 
place  in  it  which  seem  to  make  this  an  opportunity  of  such  a  peculiar 
character  unlike  any  condition  wliich  any  of  us  had  ever  faced  con- 
nected with  the  marine,  such  as  would  seem  to  make  it  a  great  pity 
if  tliis  opportunity  is  not  seized  to  the  full.  I  may  say  that  in  drawing 
this  measure,  so  far  as  I  had  a  minor  part  in  it,  the  purpose  has  been 
to  draw  a  measure  which  did  permit  the  widest  possible  scope  of 
action,  with  a  declared  purpose,  subject  to  a  double  supervision  or  a 
triple  supervision,  if  that  may  be  possible,  namely,  that  the  acts 
should  be  subject  to  the  approval  of  the  President  on  the  one  hand 
and  that  on  the  other  hand  they  are  always  subject  to  the  review  of 
Congress  which  can  at  any  time  alter  or  amend  them,  and  that  all 
that  the  board  proposed  by  this  bill  can  do  must  be  done  in  the  open 
and  in  a  manner  subject  to  constant  correction  by  public  opinion. 
That,  in  brief,  is  the  purpose  of  this  measure. 

The  American  merchant  marine  has  added  to  itself  in  the  last  year 
more  than  was  lost  in  the  two  bad  years  of  the  war  between  the  States. 
It  never  was  as  large  as  it  is  to-day.  The  increase  in  it  was  never  as 
large  as  in  the  last  calendar  year.  It  grew  much  faster  than  it  ever 
grew  before.  We  never  needed  ships  as  badly  as  we  need  them  now. 
We  never  were  more  dependent  upon  foreign  ships  than  we  are  now. 
Never  did  tliis  dependence  rest  on  a  more  shaky  foundation.  Never 
had  we  so  much  of  a  marine.  Never  did  we  suffer  so  much  from  lack 
of  one.  Never  did  we  add  to  it  so  fast.  Never  was  our  present 
helplessness  to  add  to  it  sufficiently  so  marked. 

I  call  your  attention  to  an  excerpt  from  the  London  Economist  of 
November  13,  which  has  great  significance: 

In  future  the  government  may  requisition  for  the  carriage  of  grain  and  other  mer- 
chandise any  ship  registered  in  the  United  Kingdom,  and  after  December  1  no  British 
ship  of  over  500  tons  may  carry  cargo  from  one  foreign  port  to  another  without  first 
obtaining  a  license  from  a  committee  in  London.  All  British  shipping  is  liable  to  be 
requisitioned  for  commercial  purposes.  All  trade  in  British  bottoms  between  foreign 
ports  is  to  be  under  direct  government  control. 


40         FHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

These  are  revolutionary  measures  which  nothing  but  urgent  necessity  could  justify 
and  the  full  effects  of  which  it  is  impossible  to  foretell. 

I  have  in  my  hand  the  list  of  vessels  under  contract  in  private 
American  yards  on  February  1 . 

Mr.  Hardy.  Do  I  understand  that  article  to  mean  that  a  British 
vessel  is  not  allowed  to  trade  between  two  foreign  ports  without 
special  leave  of  the  British  Government? 

Secretary  Redfield.  On  November  10,  1915,  there  was  an  order 
of  council  prohibiting  British  ships  carrying  cargo  between  foreign 
ports  unless  licensed  by  the  board  of  trade. 

Mr.  Hardy.  I  just  wanted  that  clear. 

Secretary  Redfield.  There  were  under  construction  in  American 
yards  the  first  of  this  month  2.30  vessels  of  a  total  merchant  tonnage 
01  901,871  gi-oss  tons.  That  means  that  67  new  vessels  of  231,073 
gross  tons,  represent  the  new  orders  received  during  the  months  of 
December  and  January,  or  at  the  rate,  as  you  will  observe,  of  a  new 
vessel  every  day,  or  a  little  more.  As  a  matter  of  fact,  there  are  a 
few  yards  on  the  Pacific  from  which  we  have  not  yet  heard,  and  this 
is  perhaps  something  of  an  underestimate.  I  will  file  with  the  com- 
mittee a  statement  showing  the  merchant  and  Government  ship 
building  in  each  yard  on  the  1st  day  of  February,  1916. 

(The  statement  follows:) 

Kinds  of  vessels  included  in  the  statement  of  shipbuilding  for  Feb.  1,  1916. 


Class. 

Num- 
ber. 

Gross 
tons. 

Bulk  oil  vessels .   .  . 

64 

71 

10 

16 

19 

3 

5 

3 

2 

19 
13 

1440,962 

309, 741 

Passenger  and  cargo  combined 

49,378 

47,118 

17,290 

15,000 

3,454 

11,297 

925 

• 

Num- 
ber. 

Gross 
tons. 

Special  vessels: 

For  foreign  Governments 

4 

1 
5 

1 
1 
1 
1 
1 
3 
1 

15,500 

500 

1516 

""m 

300 
500 
900 
100 

Wrecking  tug .             

Yach  ts      

Holster 

L  igh  ter 

Elevator 

Trawlers 

Fireboat 

18,616 

Not  stated 

17,590 

Total 

230 

1901,371 

Incomplete. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         41 
Merchant  and  Government  shipbuilding,  Feb.  1,  1916. 


Name. 


New  York  Shipbuilding  Co : 

Newport  News  Shipbuilding  &  Dry  Dock  Co 

Fore  River  Shipbuilding  Corporation 

Wm.  Cramp  &  Sons  Ship  &  Engine  Building  Co 

Diihuque  Boat  &  Boiler  Works 

Charles  Barnes  Co 

Bath  Iron  Works 

Maryland  Steel  Co 

Harlan  &  Ilollinpsworth  Corporation 

Union  Iron  Works - . 

Staten  Island  Shipbuilding  Co 

Great  Lakes  Engineering  Works 

Great  Lakes  Towing  Co 

Baltimore  Dry  Docks  &  Shipbuilding  Co 

Manitowoc  Shipbuilding  &  Dry  Dock  Co 

A nierican  Shipbuilding  Co 

Moore  A:  Scott  Iron  Works 

Clinton  Shipbuilding  it  Repair  Co 

Johnson  Bros 

Howard  Ship  Yards  Co 

Seattle  Construction  A  Dry  Dock  Co.^ 

Lake  Torpedo  Boat  To 

Call  ornia  Shipbuilding  Co 

American  I^ridge  Co 

Ellicolt  Machine  Corporation 

Spedden  Shipbuilding  Co 

Hartmann-Oreiling  Co 

Pusey  &  Jones  Co }    6 

Chester  Shipbuilding  Co 7 

Chicago  Shipbuilding  Co I    1 

Toledo  Shipbnilc'ing  Co '    7 

United  Kngineering  Works '    1 

HerreshoU  Manufacturing  Co I    1 

Quintard  Iron  Works !    1 

Merrill-Stevens  Co 

Milwaukee  Bridge  Co I    1 

American  Shipbuilding  Co '    1 

James  li ees  t*i:  Sons  Co j    1 

Tampa  Foundry  &  Machine  Co j    1 


Merchant       Government 
construction,    construction. 


No. 


Gross 
tons. 


No. 


119,744 

124,856 

166,000 

72,600 

25 

300 

1 1,900 

71,300 

63,481 

140,658 

1,697 

42, 530 


Total 230    1901,471 


24,500    . 

1,000  , 

63,300  I. 

110,000  i. 

1560  L 


4,600 
19,000 


10,388 
750 


1, 684 

34,000 

2,100 

17,900 

3,500 

178 

900 


20 
2,000 


Displace- 
ment. 


Tom. 

61,495 

63,400 

» 31, 892 

4,450 

647 

720 

6,295 


1.000 


800 


1. 125 

11,750 
1,955 


620 


(2) 


170 


1176,319 


Merchant 
construction 

completed 

since  July  1, 

1915. 


No. 


Gross 
tons. 


24,470 
11,837 


6,621 
525 


39 


17,490 

6,685 

6,323 

1,535 

4,242 

325 

882 

2,122 

7,180 

222 

560 

94 


91, 113 


•  Incomplete.  ^  Not  reported.  3  Detailed  statement  not  available. 

Steel  merchant  vessels  under  construction  or  under  contract  on  Feb.  1,  1916. 

NEW  YORK  SHIPBUILDING  CO.,  CAMDEN,  N.  J. 


VesseL 

Gross 
tonnage. 

Speed. 

Owner. 

Trade. 

Probable  date 
of  laimch. 

Standard  Arrow 

Royal  Arrow 

Bristol 

10,250 
10, 250 

3,971 
10,250 

5, 188 
10,250 
10, 250 
10, 2.50 

8,500 

5,266 
750 

750 

750 

750 

5,266 

Knots. 
11.0 
11.0 
10.0 
11.0 
11.5 
11.0 
11.0 
11.0 
10.5 
10.5 

Standard  Transportation  Co 

do 

BuIkoiL... 
...do 

Spring,    1916 
Winter,  1916 

Coastwise  Transportation  Co 

Petroleum  Transport  Co 

Collier 

Bulk  oil.... 
do 

Afloat. 

No.  170 

Winter,  1916 

No.  172 

Gulf  Refining  Co 

Fall,        1916 

No.  173 

do 

do 

Spring,    1917 
Do. 

Sylvan  Arrow 

Standard  Transportation  Co 

do 

Broad  Arrow 

do 

..   .do 

Fall,        1917 

No.  176 

Darrow-Mann  Co 

Collier 

do 

Winter,  1916 

No.  177 

do 

Spring,    1917 
Spring,    1916 

Do. 

No.  178 

New  York  Central  and  Hudson 

River  Railroad  Co. 
do 

Carfloat 

do 

No.  179 

No.  180 

" 

do 

do 

Fall.        1916 

No.  181 

do 

...do 

Do. 

No.  182 

10.5 

Coastwise  Transportation  Co 

Collier 

Spring,    1917 

42         SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Steel  merchant  vessels  under  construction  or  under  contract  Feb.  1, 1916 — Continued. 
NEW  YORK  SHIPBUILDING  CO.,  CAMDEN,  N.  J.— Continued. 


• 

Vessel. 

Gross 
tonnage. 

Speed. 

Owner. 

Trade. 

Probable  date 
of  launch. 

No.  183 

3,289 

5,266 

765 

765 

765 

765 

5,188 

10,250 

Knots. 
10.5 
10.5 

Pocahontas  Navigation  Co 

Darrow-Mann  Co 

CoUier 

do 

Summer,  1917 

No   184 

Do. 

No   185    

New    York   Central   &    Hudson  1  Carfloat.... 

Winter,  1916 

No  186 

River  R.  R.  Co. 
do 

do 

Do. 

No  187 

.do 

do 

Spring,   1917 

No  1H8 

..do 

do 

Do. 

No  189 

11.5 
11.0 

Gulf  Refining  Co 

Bulk  oil.... 
do 

Winter,  1917 

No   190 

Petroleum  Transport  Co 

Spring,   1918 

Total,  23  vessels  of  119,744  gross  tons. 

FORE  RIVER  SHIPBUILDING  CORPORATION,  QUINCY,  MASS. 


Texas 

New  York. 
Cu'-adist.. 
No.  248.... 
Sucrosa    . . 

Mioiero 

No.  251 . . . . 
No.  253.... 
No.  25i.... 
No.  255.... 
No.26t.... 
No.  265.... 


6,000 

11 

6,000 

11 

5,000 

101 

6,000 

12 

6,000 

10\ 

5,000 

10\ 

6,000 

12 

6,000 

11 

6,000 

11 

3,000 

m 

6,000 

12 

6,000 

12 

The  Texas  Co 

do 

Cuba  Distilling  Co 

Lucken"  ach  Steamship  Co. 

Cuba  Distilling  Co 

do 

Luckenliach  Steamship  Co-. 

The  Texas  Co 

do 

Argentinian  Government... 
Luckenl  ach  Steamship  Co . 

do 

Spanish  Government 


Oil 

do 

Molasses.. . 

Freight 

Molasses 

do 

Freight 

Oil 

do 

Naval 

Freight 

do 

Submarine. 


Launched. 
Feb.  16,1916 
Apr.  15,1916 
June    1,1916 
Mar.     1, 1916 


Total,  13  vessels  of  06,000  gross  tons. 

HARLAN  &  HOLLINGSWORTH  CORPORATION,  WIL.MINGTON,  DEL. 


Gold  Shell 

Pearl  Shell 

Georce  E.  Paddle- 

fori. 
Benjamin  Brewster 

W.H.  'liiford 

No.  443 

No.  444 

No.  445 

No.  446 

No.  448 

No.  449 

No.  450 

No.  451 

No.  452 


5,605 

11 

5, 605 
5,347 

11 
U 

5,605 

5,605 

750 

10\ 
lO'i 
15' 

2,010 

10 

8,490 

10} 

5, 605 

2,  750 
5,605 

101 
10' 

11 

4,500 

12} 

4, 500 
1,404 

12} 

Shell  Co.  of  California. 
....do 


Petroleum  Transport  (^o 

Standard  Oil  Co.  of  New  Jersev. . 

....do "... 

AVilmington  Steamboat  Co 


Baltimore  &  Carolina  Steamship 

Co. 
Standard  Oil  Co.  of  New  Jersey. . . 


....do 

Vacuum  Oil  Co . 
....do 


Ocean  Steamsliip  Co.  of  Savannah 


.do. 


New  York  Central  R.  R.  Co. 


Bulk   oil 
tanker. 

do 

do 


do 

do 

Passenger 

and 

freii'ht. 

Freight 

Bunk     oil 

tanker. 
do 

Freii'ht 

Bulk  oil 
tanker. 

Freight 
and  pas- 
senser. 
do 

Ferrv 


Launched. 

Mar.  1,1916 
Feb.  15,1916 

Jime  1,1916 
Sept.  15, 1916 
Feb.     1,1916 


June    1, 1916 

Dee.     1,1916 

Jan.  1.5,1917 
Dec.  15,1916 
May     1, 1917 

Sept.    1,1917 


Apr.     1,1918 
Sept.    1,1916 


Total,  14  vessels  of  63,481  gross  tons. 

NEWPORT  NEWS  SHIPBUILDING  &  DRY  DOCK  CO.,  NEWPORT  NEWS,VA. 


Charles  Pratt... 

H.  H.  Rogers 

Edgar  F.  Lucken- 
bach. 

Ant'verpen 

Henry  ±i.  Mallory. . . 

Munalbro 

Wm.  G.  Warden 

F.  Q.  Barstow 


10,935 
10,935 
8,000 

10  V 
10  V 
10" 

8,374 
6,000 

i? 

4,387 
10, 900 
10,900 

10 

lOV 

10} 

Standard  Oil  Co.  of  New  Jersey. 

— d3 

Edgar  F.  Luckenbach 


Standard  Oil  Co 

Mallory  Steamship  Co . 


Munson  Steamship  Co . 

Standard  Oil  Co 

do 


OD  carrier.. 

do 

Freight 

Oil  carrier.. 
Freight  and 
passenger. 

Freisht 

Oil  carrier.. 
do 


Feb.,      1916 

Do. 
Apr.,       1916 

July  —,1916 
Oct.   —,1916 

Apr.  —,1916 
Nov.  — .  1916 
Dec.   —,1916 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         48 

Stetl  meixhant  veasch  under  conslnictioyi  or  under  contract  on  Feb.  1,  1916 — Coritinuad. 
NEWPORT  NEWS  SHIPBUILDING  &  DRY  DOCK  CO.,  NEWPORT  NEWS,  VA.— Contimied. 


Vessel. 


Gross 
tonnage. 


Speed. 


Owner. 


Trade. 


Probable  date 
of  launch. 


No.  198.... 
No.  199.... 
No.  200.... 
No.  201 ... . 

Torres 

EI  Mirante 
El  Capitan 
No.  205.... 
No.  206.... 


5,900 
5,900 
4,600 
10, 900 
5,125 
4, 500 
4, 500 
8,400 
4,600 


Knots. 
10 
10 
lOV 
10| 
11 
11 
11 
10.^ 

loi 


Crowell  &  Thurlow  Steamship  Co. . 

do 

Muns3n  Steamship  Line 

Standard  Oil  Co 

Southern  Pacific  Co 

do 

do 

.\ tlantic  F efinins  Co 

Munson  Steamship  Co 


Freight 

do 

do 

Oil  carriec. 

do 

Frei'iiht . . . . 

do 

Oil  carrier.. 
do 


Sept.  — ,  1916 
Dec.  —,1916 
Feb.  —,1917 
Aug.  —,1917 
Mav   —,1917 

"Do. 
June  —,1917 
July   —,1917 
Nov.  — ,  1917 


Total,  17  vessels  of  124,850  gross  tons. 

CHESTER  SHIPBUILDING  CO.,  CHESTER,  PA. 


Unnamed     

5,000 

5,000 
4,000 
5,000 

5,000 
5,000 
5,000 

For  foreign  account    

Oil    carry- 
ing. 
..  ..do 

June  —  1916 

Do 

....  do 

July   —,1916 
Oct     —  1916 

Do 

For  local  owners        

Frei2:hter  . . 
Oil    carry- 
ing. 
..  ..do 

Do 

For  foreign  account       

Do 

Do 

do 

Do 

do 

..  ..do  ... 

Jan.    — ,  1917 

Do 

do 

..  ..do  . 

Apr.  —,1917 

Total,  7  vessels  of  34,000  gross  tons. 

ELLIOTT  MACHINE  CORPORATION,  BALTIMORE,  MD. 


No.  6190-1 
No.  0190-2 
yo.  6190-3 


250 
2.50 
250 


11 

Pennsylvania  R.  R.  Co 

11 

do" 

11 

do 

Tan.  2.5,1916 
Feb.  25.1916 
Mar.  25,1916 


Total,  3  vessels  of  750  gross  tons. 
WILLLIM  CRAMP  &  SONS  SHIP  &  ENGINE  BUILDING  CO.,  PHILADELPHIA,  PA. 


No.  428. 
Jalis?o.. 


Coahuila.. 
No.  131.... 
No.  432.... 
No.  133.... 
No.  434.... 


No.  435 

Santa  Rosa.. 
Santa  Paula. 

No.  440 

No.  441 


7,100 

11 

2,900 

10; 

2,900 

loi : 

7,100 

11 

7,100 

11  ! 

2,700 

12 

8,000 

17    1 

8,000 

17 

6,  .300 

12 

6,300 

12 

7, 100 

11 

7,100 

11 

Petroleum  Transport  Co Bulk  oil 

Mexican  Navigation  Co Pass,    and 

freight. 

do do 

Sun  Co ; Bulk  oil 

do do 

Florida  East  Coast  Ry.  Co Car  ferry. . . 

Atlantic,    Gulf    &    West    Indies     Pass,    and 

Steamship  ("o.                                     freight. 
do do 


W.  R.Grace  &  Co 

do 

Petroleum  Transport  Co . 
do 


Freight 

do 

Bulk  oil.... 
do 


Launched. 
Do. 

Do. 
May    15,1916 
June  15.1916 
July   20,1916 
Mar.     1,1916 


Jan. 
Oct. 
Nov. 
Oct. 
Nov. 


2,1917 
2,1916 
1,1916 
1,1916 
2, 1916 


Total,  12  vessels  of  72,600  gross  tons. 

BALTIMORE  DRY  DOCKS  &  SHIPBUILDING  CO.,  BALTIMORE,  MD. 


No.  74 
No.  75 
No.  76 
No.  77 
No.  78 
No.  79 
No.  so 


3,500 

114 

3,  .500 

lU 

3, 500 

11* 

3,500 

lU 

3,500 

lU 

3,500 

m 

3,500 

Hi 

Trans-Atlantic  Motor  Ship  Co. 

do 

do 

do 

Christoffer  Hannevig 

do 

do 


Bulk  oil... 

do.... 

do.... 

do.... 

do.... 

do.... 

....do.... 


Apr.     1, 1916 

Do. 
Oct.     1,1916 

Do. 


Total,  7  vessels  of  24,500  gross  tons. 


44         SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Steel  vierchant  vessels  binder  conslniction  or  xinder  contract  on  Feb.  1,  1916 — Continued. 
MARYLAND  STEEL  CO.,  SPARROWS  POINT,  MD. 


Vessel               i     ^"""^^ 
^  ®^^®^-            1  tonnage. 

1 

Speed. 

Owner. 

Trade. 

Probable  date 
of  launch. 

Artisan 

5,800 
5,800 
3,450 
3,450 
3,450 
3,800 
3,800 
4,000 
10,000 
10,000 
7,150 
7,150 
3,450 

Knots. 
lO.i 
lOi 
9" 
10 
10 
12 
12 
10 
lOV 
10* 
10" 
10 
9 

American  Hawaiian  Steamshiip  Co. 
do 

Freight 

do 

Jan.    15,1916 
Feb.  26,1916 

Arborean 

Margaret 

A.  H.  Bull  Steamship  Co 

Munson  Steamship  Lo 

do 

do 

Mar.   15,1916 

Munsomo „.. 

Mav   15,1916 

Munplape . 

do 

Apr.   15,1916 
Julv   15, 1916 

Cornelia 

Bull  Insular  Steamship  Co. . 

do. 

Helen 

do 

do  .. 

Sept.    1,1916 
-Aug.  15,1916 
Nov.     1.1916 

No.  157 

.do  . 

A.  C.  Bedford 

Standard  Oil  I  0 

BulV  oil  . . . 
do 

W.  C.  Teazle 

do 

Jan.      1,1917 

Mavari 

Spanish-American  I.  Co 

do 

Freight 

do 

4-»r    —  1917 

Daiquiri. 

May   —^917 

Not.  164 

Christopher  Hannevi;:,  jr 

...  .do 

jTpb.  —,1917 

0  Total,  13  vessels  of  71,300  gross  tons. 

SPEDDEN  SHIPBUILDING  CO.,  BALTIMORE,  MD. 


John  T.  Donohue 

Northern  Transportation  Co 

Standard  Oil  Co 

Northern  Transportation  Co 

Tug 

Oil  barge... 
Tug 

June    1  1916 

Do 

Northern 

Dec.     1  1916 

AMERICAN  BRIDGE  CO.,  PITTSBURGH,  PA. 


590    

Crucible  Fuel  Co.        .  . 

Coal  trade.. 

do 

do 

do 

do 

Car  transfer 

do 

do 

do 

do 

do 

do 

Grain 

Pleasure. .. 

Car  transfer 

Sand.  . 

Mar.  —  1916 

590     

...  do 

590   

.do 

590   

..  .do 

590    

do 

960    

Lehigh  Valley  R.  R.  Co 

do 

May  —1916 
June  — ,  1916 

960    

960   

do    

Do. 

960    

do    

July  — ,  1916 
Do. 

580    

do 

580    

...do 

Aug.  — ,  1916 
Do. 

580    

do  .. 

160    

Smith-Hippen  Co 

F.D. Stout 

Korean's  Louisiana  &  Texas  R.  R. 

&  S.  S.  Co. 
Rogers  Sand  Co 

May  — ,  1916 
Feb.  — ,  1916 

38    

1,350    

Aug.  — ,  1916 
June  — ,  1916 

310    

Total,  16  vesse  lEof  10,388  gross  tons. 

MANITOWOC  SHIPBUILDING  CO.,  MANITOWOC,  WIS. 


Geo.  A.  Wallace, jr. . 


300 

300 
300 
100 


Bay  State  Fishirg  Co.,  Boston,    Trawler... 

Mass. 
do 1 do 

-do. 


City  of  Cleveland j  Fire  boat 


May  15,1916 

June  15,1916 
July  15,1916 
May   15,1916 


Total,  4  vessels,  of  1,000  gross  tons. 

AMERICAN  SHIPBUILDING  CO.,  CLEVELAND,  OHIO. 


No.  713 
No.  714 
No.  715 
No.  716 
No.  717 
No.  718 

No.  459 
No.  460 


7,000 

10 

7,000 

10 

7,000 

10 

7,000 

10 

6,400 

9J 

7,200 

11 

2,100 

n 

2,100 

9i 

At  Lorain  (Ohio)  yard. 


TnterlaVe  Steamship  Co.. 
Pittsburgh  Steamship  Co. 

Herbert  K.  f  a^-'es 

Pittsburgh  Steamship  Co. . 

M.  A.  Hanna  &  Co 

CarlD. Bradley 


At  Cleveland  yard. 


X.B..  Skaugaards. . 
Arthur  Mathiesen . 


Freight. 

do.. 

....do.. 

do.. 

do.. 

do.. 


.do. 
.do. 


Spring,   1916 

Do. 

Do. 

Do. 

Do. 
1917  delivery 


Spring,   1916 
Do. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         45 

Steel  merchant  vessels  under  construction  or  under  contract  on  Feb.  1,  1916 — C'outiniied, 
AMERICAN  SHIPBUILDING  CO.,  CLEVELAND,  OHIO— Continued. 


Vessel. 


No.  105. 
No.  IS !. 
No.  197. 
No.  198. 


No.  79. 


No.  524. 


Gross 
tonnage. 


2,100 
2,100 
2,100 
2,100 


2,100 


7,000 


Speed. 


Knots. 
10 

9i 
9\ 


9i 


10 


Owner. 


At  Detroit  yard. 


Geo.  Hall  Coal  Co. 

A.  O.  Lindvig 

do 

Erling  Lund 


do. 


At  Chicago  yard. 

Erling  I.und 

At  Superior  (  Wis.)  yard. 
Roy  M.  Wolvin do 


Trade. 


Freight . 

do.. 

do.. 

do.. 


Probable  date 
of  launch. 


Spring,  1916 
Do. 
Do. 
Do. 


Do. 


191C  delivery 


Total,  14  vessels  of  63,300  gross  tons. 

THE  HERRESHOFF  MANUFACTURING  CO.,  BRISTOL,  R.  L 

178 

J.  F.  Brown 

Pleasure. .. 

Apr.  — 

1916 

COWLES  SHIPYARD  CO.,  BUFFALO,  N.  Y. 

No  60     .          ... 

20 

8 

Harry  J.  Hutchings 

Mar.  — 

1916 

THE  CHARLES  BARNES  CO.,  CINCINNATI,  OHIO. 

Australia . 


300 


South  Australian  Government. . 


River  im- 
p  o  V  6  - 
ment. 


Fall,       1916 


HOWARD  SHIPYARDS  CO.,  JEFFERSONVILLE,  IND. 


450 

500 
550 
500 
500 
900 
1,200 


W.F.Mayo 

Baton  l.'oiige  Transportation  Co. . . 

L'nion  Ferrj'  Co , 

do..... 

.\mesville  Ferry  Co 

L.  &  J.  Ferry  Co 

I.  N.  Co.  of  New  York 


Ferry 

...do 

...do 

...do 

Passenger. 


Total,  7  vessels  of  4,600  gross  tons. 

QUINTARD  IRON  WORKS  CO.,  NEW  YORK,  N.  Y. 


Mary  Chilton 900 

17  '  Nantasket  Beach  Steamboat  Co 

Apr.     1, 1916 

DUBUQUE  BOAT  &  BOILER  WORKS,  DUBUQUE,  IOWA. 

No.  35 1             25 

Evansville  R.  R.  Co 

Pass 

Mar.  20,1916 

STATEN  ISLAND  SHIPBUILDING  CO.,  PORT  RICHMOND,  N.  Y. 

No.  675. 
No.  676. 
No.  677. 
No.  680. 
No.  681. 

No.  684. 


178 
178 
500 
300 
300 

241 


Magnolia  Petroleum  Co i  Towing 

Standard  Oil  Co I do 

International  Elevating  Co Elevator. . . 

Pennsylvania  R.  R.  Co Stm.  lighter 

New    York    Central    &    Hudson     House  bge 

River  R.  R.  Co. 
Lehigh  Valley  R.  R.  Co Tug. 


Launched. 
Feb.     5, 1916 


Total,  6  vessels  of  1,697  gross  tons. 
32910—16 -4 


46         SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 
Steel  merchant  vessels  under  construction  or  under  contract  on  Feb.  1,  1916 — Continued. 

BATH  IRON  WORKS,  BATH,  ME. 


Vessel. 

Gross 
tonnage. 

Speed. 

Owner. 

Trade. 

Probable  date 
of  launch. 

No.  69 

300 
800 
800 

Knots. 
29 

P.N.  Rouse 

Yacht 

Car  float... 
do 

Apr.  — ,  1916 

No  71 

No  72 

No.  73 

26 
26 

Yacht 

do 

No.  74 

Total,  5  vessels  of  1,900  gross  tons. 

UNION  IRON  WORKS  CO.,  SAN  FRANCISCO,  CAL. 


No.  123. 
No.  124. 
No.  125. 

No.  126. 

No.  127. 

No.  128. 
No.  129. 
No.  130. 
No.  131. 
No.  132. 

No.  133. 
No.  134. 
No.  135. 
No.  136. 

No.  137. 
No.  138. 
No.  139. 
No.  140. 
No.  141 . 


7,100 

11 

8,100 

11 

7,100 

11 

6,430 

11 

9,728 

16 

8,100 

11 

7,200 

11 

7,200 

11 

7,100 

11 

6,200 

11 

6,200 

11 

10,500 

11 

10,500 

11 

6,200 

11 

6,200 

11 

6,200 

11 

6,200 

11 

7,200 

11 

7,200 

11 

Union  Cil  Co.  of  California \  Oil  tanker. . 

Standard  Cil  Co.  of  Californli do 

Standard   Transportation  Co.  of' do 

Delaware. 

Rolph  Navigation  &  Coal  Co General 

cargo. 

Matson  Navigation  Co Cargo  and 

passenger. 

Standard  Cil  Co.  of  New  York I  Cil  tanker.. 

J.  W.  Van  Dyke do. 

....do : 

Vacuum  C  il  Co 

Walker- .\rmstrong  Co 


Rolph  Navigation  &  Coal  Co 

Standard  Gil  Co.  of  New  Jersey. . . 

...do 

Standard   Transportation  Co.  of 

Delaware, 
do. 


do 

do 

General 

cargo. 

do 

Cil  tanker.. 

do 

General 

cargo, 
.do. 


(Not  given) j do. 

(Not  given) 

Wilhelm  Jebsen 

(Not  given) 


-do. 
Oil  tanker. . 
do 


Feb.  5,1916 
July  5, 1916 
Aug.    5, 1916 


Apr. 
Nov. 


1,1916 
4, 1916 


Aug.  12,1916 
Nov.  18,1916 
Dec.  l';,19]6 
Jan.  —,1917 
Oct.     2, 1916 

Do. 
Jan.  2, 1917 
leb.  2,1917 
Nov.  25,1916 

Do. 
Jan.  25,1917 

Do. 
Mar.  5, 1917 

Do. 


Total,  19  vessels  of  140,658  gross  tons. 

TOLEDO  SHIPBUILDING  CO.,  TOLEDO,  OHIO. 


No.  131 
No.  132 
No.  133 
No.  134 
No.  135 
No.  136 
No.  137 


1,700 

7 

1,700 

7 

1,700 

7 

1,700 

7 

1,700 

7 

1,700 

7 

7,700 

10* 

Smith  Shipping  Co.  (Inc.).. 

do 

....do 

do 

....do 

do 

Gieat  Lakes  Steamship  Co. 


Freight. 

do.. 

do.. 

do.. 

do.. 

do.. 

do.. 


Apr.,  1916 

Do. 

May,  1916 

June,  1916 

July,  1916 

Aug.,  1916 

Do. 


Total,  7  vessels  of  17,900  gross  tons. 

CHICAGO  SHIPBUILDING  CO.,  CHICAGO,  ILL. 


No.  79. 


2,100 


9J     For  Norwegian  interests I  Passenger 

and  freight. 


June,       1916 


MOORE  &  SCOTT  IRON  WORKS,  OAKLAND,  CAL. 


No.  108. 


No.  109. 
No.  110. 


5,000 
5,000 


For  French  owners Hopper 

barge. 

Rolph  Navigation  Co Cargo 

Port  Costa  Steamship  Co do 


Total,  3  vessels  of  10,000  gross  tons. 

JAMES  REES  <fc  SONS  CO.,  PITTSBURGH,   PA. 


For  foreign  owners . 


River May,      1916 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         47 

Steel  iverchant  vessels  under  construct ioti  or  under  contract  on  Feb.  1,  1916 — Continued  . 
CLINTON  SHIPBUILDING  &  REPAIR  CO.,  PHILADELPHIA,  PA. 


Vessel. 

Gross 
tonnage. 

Speed. 

Owner. 

Trade. 

Probable  date 
of  launch. 

No.  29 

Knots. 

Newton  Supply  Co 

Hoister 

Coastwise . . 

Feb.  15,1916 

No.  30 

560 

James  J.  McNally 

June    1, 1916 

Total,  2  vessels  of  560  gross  tons. 

GREAT  LAKES  ENGINEERING  WORKS,  DETROIT,  MICH. 


No.  153. 

No.  154. 
No.  155. 
No.  156. 

No.  157. 
No.  158. 
No.  159. 

No.  ICO. 

No.  161. 
No.  1C2. 

No.  ia3. 


500 

10 

8,000 
4,810 
2,480 

10 
10 
10 

2,500 
2,500 
1,710 

10 
10 
10 

2,480 

10 

2,200 
2,550 

10 
10 

2,550 
7,700 
2,550 

ooo 

Merrltc  &  Chapman. 


Pittsburgh  Steamship  Co , 

Wyandotte  Transportation  Co . 
Adler  (Inc.) , 


Clyde  Steamship  Co. 

do 

J.  L.  Crosthwaite 


Adler  (Inc.) 

Argentina  Government. 


W  r  e  eking 
tug. 

Freight 

do 

Coast  col- 
lier. 

Coast  freight 

do 

Lake  and 
coast. 

Coast  col- 
lier. 

Oil 

Coast  col- 
lier. 

do 

Bulk  freight 

Collier 


Spring,    1917 
Do. 


Total,  13  vessels  of  42,530  gross  tons. 

UNITED  ENGINEERING  WORKS,  OAKLAND,  CAL. 


No.  15 

3,500 

9 

For  European  owners 

Freight.... 

Sept.    1,1916 

THE  PUSEY  &  JONES  CO.,  WILMINGTON,  DEL. 

No.  1306 

328 

328 
328 
100 
300 
300 

Pfinnsvlvania  R.  R.  Co 

Freight 

do 

Dec.   29,1915 

No.  1306 

do" 

Jan.    29, 1S16 

No.  1306  .   . 

do     

do 

Feb.  29,1916 

Winterthur 

Philadelphia  &  Reading  R.  R.  Co. 
W.  &  A.  Fletcher  Co 

Towing 

rto 

Mar.     1, 1916 

No.  1313 

Apr.     6,1916 

No.  1326 

Total,  6  vessels  of  1,684  gross  tons. 

TAMPA  FOUNDRY  &  MACHINE  CO.,  TAMPA,  FLA. 


2, 000   Central  Hudson  Steamboat  Co . 


Secretary  Redfield.  This  shows  that  the  merchant  tonnage  now 
building  is  considerably  more  than  double  the  amount  of  any  pre- 
vious year  in  the  history  of  the  country,  and  it  is  nearly  seven  times 
greater  than  the  amount  which  was  built  July  1,  1914,  just  before 
the  outbreak  of  the  European  war.  The  construction  for  the  Navy, 
and  for  other  branches  of  the  Government,  however,  is  not  as  much 
as  it  was  in  1913  and  1914,  and  therefore  the  progress  in  merchant 
ship  construction  is  doubly  noteworthy. 


48         SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

The  Commissioner  of  Navigation  says: 

war  losses  of  shipping. 

Februa'ry  9,  1916. 

The  most  complete  statement  of  the  losses  of  ships  during  the  war  has  been  carried 
from  week  to  week  in  Fairplay,  a  recognized  standard  British  weekly  shipping  pub- 
lication. Each  week  since  oarly  in  the  war  this  paper  has  published  a  list  of  vessels 
reported  during  the  week  as  sunk  by  submarines,  mines,  war  ships,  etc.  The  issue 
of  Fairplay  for  January  13  reports  the  tonnage  lost  up  to  that  date  at  1,816,001  gioss 
tons.  This  includi  s  ships  undi  r  all  flags,  neutral  as  well  as  bellig<  r  nt,  both  of  the 
allies  and  the  German  combination.  The  number  is  not  stated,  nor  is  it  very  impor- 
tant, as  it  includes  hundreds  of  small  trawlers  and  fishing  vessels  sunk  in  the  iSorth 
Sea.  As  the  lost  v(  ssels  are  reported  by  name  from  week  to  week,  if  it  were  worth 
while  the  total  number  could  be  counted  up.  Some  of  the  vessels  reported  in  this 
tabulation  were  doubtless  lost  through  ordinary  calls'^ s  and,  of  course,  it  is  possible 
that  some  war  loss'  s  have  not  been  included,  though  the  effort  has  evidently  been 
made  to  make  the  statement  complete.  I  believe,  therefore,  that  you  would  be  safe 
in  saying  that  the  shipping  aljsolutely  destroyed  since  the  beginning  of  the  war  in 
round  numbers  is  approximately  1,800,000  gross  tons. 

London  Syi-en  and  Shipping  for  January  5  devotes  several  pages  to  British  ships 
which  have  been  lost  through  the  war,  and  summarizes  these  losses  as  follows: 

Gross  tons. 

British  shipping  interned  in  German  ports 172,  554 

British  sli  ipping  captured  by  the  Turks 11,  570 

British  shipping  sunk  prior  to  February  18,  mainly  by  enemy  cruisers 272.  488 

British  shipping  sunk  since  the  blockade  was  declared,  missing  vessels,  etc.       762,  534 

Total 1,  219, 146 

The  same  issue  of  Fairplay,  to  which  I  have  already  referred,  states  that  the  total 
German  vessels  captured  or  sunk  by  the  allies  number  537,  of  1,263,539  gross  tons. 
As  you  will  recall,  the  allies  have  captm^ed  a  number  of  German  ships  as  prizes,  but 
have  sunk  very  few,  except  auxiliary  cruisers  such  as  the  Kaiser  Wilhelm  der  Grosse, 
the  Cap  Trafalger  and  similar  vessels.  In  the  British  submarine  blockaele  of  the 
Baltic,  however,  between  October  3  and  November  2,  22  German  merchant  ships 
were  sunk,  besides  several  captured.  The  loss  of  Scanelinavian  ships  in  the  so-called 
war  zone  has  been  very  heavy. 

E.  T.  Chamberlain, 

Commissioner. 

P.  S. — For  comparison,  note  that  from  ordinary  causes  the  losses  of  shipping  during 
1913  amounted  to  667,547  gross  tons;  in  1912,  to  748,965  gross  tons;  in  1911,  to  884,843 
gross  tons;  1910,  947,690  gross  tons. 

E.  T.  C. 

Secretary  Redfield.  I  will  file  with  the  committee  a  statement 
showing  the  comparison  of  vessels  building  in  the  United  States  on 
the  1st  of  July  for  each  of  the  last  15  years,  a  statement  showing  the 
merchant  vessels  under  construction  abroad,  and  also  a  statement 
dealing  with  the  war  losses  in  shipping,  which  for  the  purposes  of 
the  record  I  will  briefly  state  is  placed  by  the  recognized  Fnglish 
standard  paper,  called  L^  airplay,  at  something  in  exi-ess  of  1,800,000 
tons  up  to  January. 

(Tlie  statements  foUow:) 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         49 
Merchant  vessels  under  construct  ion  abroad. 


Austria- Hungary . 

Belgium 

British  colonies.. 

China 

Denmark 

France 

Germany 

Greece 

Holland 

Italy 

Japan 

Norway 

Portugal 

Russia 

Spain 

Sweden 

United  Kingdom. 


Sept.  30, 
1910. 


38, 620 
5,250 
10, 133 


Total    United    Kingdom 

and  colonies 

Other  countries 


Grand  total . 


525 
91,426 
139, 117 

500 
44, 153 
11,233 
37,112 
21,151 

700 


7,082 

10, 950 

1,154,197 


1,164,330 
407,819 


1,572,149 


Sept.  30, 
1911. 


50, 117 

9,414 

2,586 

6,146 

15,645 

125, 160 

273, 185 

■      490 

74,256 

19, 245 

22, 038 

18, 145 

»    220 


3,838 

4,740 

1,446,317 


Sept.  30, 
1912. 


Sept.  30, 
1913. 


66,000 
16, 680 
11,186 


22,578 
119,618 
467, 763 


103,080 
45,393 
48,219 
33, 786 


1,010 

6,300 

12, 740 

1,846,829 


68, 

14, 

36, 

5, 

25, 

249, 

535, 

128, 
56, 
64, 
41, 


June  30, 
1914. 


92, 767 

5,792 

36, 574 


116,137 
69, 098 
91,510 
38, 776 


1915-16. 


(3) 

(5), 


1,448,903 
622, 639 


1,858,015 
943, 167 


2,071,542 


2,801,182 


12, 128 

2,830 

16, 665 

1,987,254 


2,024,177 
1,222,573 


3, 246, 750 


20, 667 
4,429 
17,001 
1,722,128  1,506,925 


1,758,702 
1,255,677 


3,014,379 


1  Fully  employed  for  two  or  three  years. 
*  Almost  wholly  engaged  in  naval  work. 
3  Filled  with  orders  up  to  1917-18. 


*  Short  of  coal. 

6  Busy  with  naval  and  merchant  work. 

'  Yards  full;  sending  orders  to  United  States. 


Comparison  of  steel  vessels  building  in  the  United  States,  1900-1915. 


Date. 


Merchant. 


Lake. 


Num- 
ber. 


Gross 
tons. 


Seaboard. 


Num- 
ber. 


Gross 
tons. 


Total. 


Num- 
ber. 


Gross 
tons. 


Government. 


Num-  Displace- 
ber.  1    ment. 


Total. 


Num- 
ber. 


Tons. 


Aug.  15,1900. 
June  15, 1901. 
July  1,1902.. 
Julv  1,1903.. 
Julv  1,1904. . 
July  1,1905.. 
July  1,1906.. 
Julv  1,1907.. 
Julv  1,1'JOS. . 
July  1.1909. . 
July  1, 1910. . 
July  1,1911.. 
July  1,1912.. 
July  1,1913.. 
July  1,1914.. 
July  1,1915.. 


70,119 
81,780 
124,537 
103,020 
400 
104,067 
175,472 
253,949 


41,395 
59, 692 
71,769 
78,353 
40, 849 
39,337 
15,951 


207, 561 

273,865 

222  949 

146|655 

94, 588 

86, 836 

159,299 

149, 524 

14,775 

127,453 

86,075 

28, 626 

192,960 

169, 5S0 

104,631 

294, 138 


68 
89 
104 
88 
57 
76 
111 
134 
13 
65 
99 
79 
131 
134 
41 
76 


277, 680 
355, 645 
34  r,  486 
255,675 

94,988 
190,903 
334,771 
403,473 

14,775 
168,848 
145, 767 
100,395 
271,313 
210, 429 
143, 968 
310,089 


47 
71 
67 
47 
38 
39 
29 
45 
82 
52 
45 

130 
85 

123 
58 
69 


113,329 
281,148 
269, 890 
334, 147 
331,435 
308, '.02 
237,814 
151,993 
136,091 
164, 184 
184,096 
119,449 
234, 923 
230, 673 
142,910 
190, 790 


115 

160 
171 
135 

95 
115 
140 
179 

95 
117 
144 
209 
216 
257 

99 
145 


391,009 
636, 793 
617,376 
589,822 
426,423 
4J9, 605 
572, 585 
555,466 
150, S66 
333, 032 
329, 863 
219,844 
506,236 
441,102 
2S6, S78 
500,879 


The  Chairman.  Loss  of  British  shipping  ? 

Secretary  Redfield.  All  shipping.  Of  course  that  does  not  in- 
clude any  interned  shipping. 

Then  I  have  also  a  statement  here  of  the  requirements  of  the  Italian 
law  as  regards  licenses  for  shipping  trade,  which  may  be  of  some 
interest  to  the  committee. 


50        SHIPPING  BOARD,  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE. 

(The  statement  follows :) 

[Ps.  23-25,  hearing  before  a  subcommittee  of  the  Committee  on  Commerce  United  States  Senate,  62d 
Cong.,  2d  sess.,  on  S.  J.  Res.  112,  S.  6976,  and  S.  7038,  "To  promote  safety  of  navigation  on  water,"  Thurs- 
day, June  6, 1912.] 

LICENSE   FOR  TRADE. 

The  essential  parts  of  the  Italian  emigration  act  of  1901,  so  far  as  they  have  a  bearing 
on  the  first  three  sections  of  S.  6976,  are  found  in  article  13  of  that  law.  That  article 
provides  for  the  license  of  a  person  or  corporation  to  engage  in  the  emigration  business, 
provided  he  can  furnish  transportation  through:  (a)  Italian  steamship  company; 
(6)  foreign  steamship  companies;  (c)  Italian  steamsliip  owners,  either  an  individual  or 
several  furnishing  different  ships;  (d)  foreign  shipowners,  chartering  to  Italians  or 
foreigners.     The  text  of  the  law  then  provides: 

"Art.  13.  *  *  *  (c?)  The  articles  of  incorporation  of  foreign  steamship  companies 
shall  be  recorded  upon  paying  a  fixed  duty  of  500  to  3,000  lira,  in  proportion  to  their 
capital  stock.     (Lira-franc=19.4  cents.  United  States.) 

"Any  authorization  which  shall  increase  such  capital  stock  shall  be  recorded  on 
payment  of  a  fixed  duty,  the  amount  of  which  shall  be  determined  proportionately  to 
the  duty  paid  for  the  registration  of  the  deed  of  incorporation,  in  proportion  to  the 
original  capital  stock  of  the  company. 

"Foreign  companies,  owners,  and  charterers  shall  be  licensed  only  on  condition  that 
they  appoint  as  their  representatives  an  Italian  subject  residing  in  the  Kingdom,  or  an 
Italian  firm  legally  constituted,  and  provided  they  submit  to  the  laws  and  by-laws  of 
the  Kingdom,  and  to  all  subsequent  amendments  thereto. 

"Such  license  shall  hold  good  for  12  months  and  may  be  renewed  subject  to  the  pay- 
ment each  year  of  a  duty  of  1,000  lira,  and  a  security  ofnot  less  than  3,000  lira  in  Gov- 
ernment bonds,  as  may  be  determined  by  the  foreign  oflSce,  in  proportion  to  the  im- 
portance of  the  business  it  may  cover. 

"The  application  for  the  granting  of  such  a  license  implies  the  acceptance  of  all  the 
obligations  imposed  on  the  carrier  by  tliis  law. 

"The  foreign  office  after  hearing  the  council  of  emigration  may  by  an  official  decree 
deny,  limit,  or  withdraw  such  license. 

"The  secm-ity  shall  guarantee  in  the  first  place  the  carrying  out  of  all  the  obligations 
assumed  by  the  carrier  and  liis  representative  toward  the  emigi'ants,  and,  secondly, 
the  payment  of  all  pecuniary  penalties  to  which  the  carrier  or  his  representative  may 
be  liable  under  this  law.  Such  security  shall  be  made  good  whenever  it  may  have 
been  impaired;  if  not  made  good  the  license  shall  be  null  and  void.  It  shall  be 
refunded,  excepting  when  suit  may  be  pending,  six  months  after  the  carrier  shall 
have  ceased  to  act  in  this  capacity." 

The  regulations  under  the  act  (Part  III)  provide,  among  other  matters: 

Art.  42.  In  order  to  obtain  a  license  as  carrier,  steamship  companies,  syndicates  of 
Italian  owners,  owners  or  charterers,  in  whose  name  the  license  is  to  be  made  out, 
shall  send  in  their  application  to  the  commissioner  general,  indicating: 

1.  Name,  gross  and  net  tonnage,  speed,  and  flag  of  the  steaners  which  the  applicant 
offers  for  the  transport  of  emigrants,  and  the  approximate  number  of  emigrants  that 
each  steamer  can  carry. 

2.  The  transoceanic  voyages  the  applicant  proposes  to  undertake  and  the  usual 
ports  of  call. 

3.  The  proposed  price  of  passage,  according  to  voyages  and  steamers,  for  the  trans- 
port of  ordinary  passengers  and  of  emigrants. 

To  this  application  must  be  attached  also: 

(a)  Documents  stating  who  is  authorized  to  sign  for  the  firm  in  matters  referring 
to  emi, 'ration  and  all  obligations  resulting  therefrom  in  the  case  where  the  applica- 
tion is  made  by  an  Italian  steamsliip  company. 

(b)  Articles  of  incorporation  duly  registered,  certificate  from  qualified  harbor  mas- 
ter stating  what  steamers  the  owners  offer,  and  a  certificate  from  the  civil  court  nam- 
ing the  persons  authorized  to  sign  for  the  firm  when  the  request  is  made  by  a  syndicate 
of  Italian  steamship  owners. 

(c)  An  authentic  copy  of  articles  of  incorporation,  duly  verified,  when  the  appli- 
cation is  made  by  foreign  steamsliip  companies. 

(d)  A  certificate  from  the  harbor  master  stating  the  qualification  of  the  owner  of 
the  steamers  named  in  the  application  if  made  by  an  Italian  owner. 

(e)  A  declaration  from  a  competent  foreign  authority,  duly  verified,  stating  that 
the  applicant  manages  the  steamers  named  in  the  application  if  made  by  a  foreign 
owner. 


SHIPPING  BOARD^  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE.         51 

(/)  The  charter  party  for  the  ship,  duly  authenticated,  when  the  application  is 
made  by  an  Italian  or  foreign  charterer  or  by  any  company  or  owner  who  besides 
thoir  own  ships  charter  steamers  for  the  transport  of  emigrants. 

(f/)  An  authentic  copy  of  the  articles  of  incorporation  containing  the  members  of 
the  Italian  firm  who  are  authorized  to  sign  for  same,  in  the  case  of  the  latter  having 
been  appointed  to  act  for  a  foreign  company,  owner,  or  charterer. 

(h)  All  other  documents  that  the  applicant  may  consider  useful  in  showing  the 
quality  and  importance  of  the  emigration  business  lie  intends  to  carry  on. 

F'oreign  companies,  owners,  or  charterers  shall  also  produce  an  authentic  copy  of 
the  power  of  attorney,  duly  registered,  nominating  their  special  agent,  who  shall 
reside  in  P^ome,  Genoa,  Naples,  or  in  Palermo,  as  well  as  an  undertaking  to  abide 
by  Italian  laws  and  regulations  in  all  matters  connected  with  emigration  and  result- 
ing therefrom. 

Art.  44.  *  *  *  When  foreign  carriers  shall  so  request  in  their  application,  they 
shall  have  the  option  of  depositing  with  the  cassa  deposit!  e  prestiti  in  State  bonds  a 
special  security  guaranteeing  the  fulfillment  of  the  law  in  force  regarding  the  trans- 
port of  pas33ngers  not  classified  as  emigrants,  as  per  article  91  of  the  Mercantile  Marine 
Code,  in  the  place  of  the  one  pro\'ided  for  by  article  68  of  the  regulations  approved 
by  royal  decree  May  20,  1897,  N.  178,  and  October  19,  1898,  N.  454. 

Th3  amount  of  such  guaranty  shall  be  determined  by  the  minister  of  marine  and 
shall  remain  deposited  until  four  months  after  the  final  transport  of  such  passengers 
or  until  other  action  is  taken  on  the  part  of  the  same  minister  which  will  release  same. 

Art.  46.  In  order  to  obtain  a  license  as  emigi-ant  carrier,  foreign  companies  shall 
pay  for  the  registration  of  their  articles  of  incorporation  a  fixed  sum  of  500  lire  if  their 
paid-up  capital  stock  shall  not  exceed  5,000,000  lire.  Above  this  the  registration 
duty  shall  be  increased  by  100  lire  for  every  additional  million  or  fraction  of  a  mil- 
lion capital  stock. 

******* 

Art.  94.  All  steamers  for  which  is  made  application  to  carry  emigrants  on  trans- 
oceanic voyages,  whether  national  or  foreign,  shall  comply  with  the  standard  of  sea- 
worthiness as  to  speed,  safety,  internal  fittings  and  apparatus  prescribed  by  the  law 
and  the  regulations  of  this  act. 

The  emigra'nt  carriers  and  the  captains  in  command  of  the  steamers  shall  be  respon- 
sible for  all  infringements  which  may  be  made  in  respect  of  the  conditions  of  the 
steamers.  Such  responsibility  shall  not  be  lessened  by  the  fact  of  the  ordinary  or 
special  inspections  of  the  steamers  by  the  Government  authorities. 

Art.  95.  The  said  steamers  shall  pass  survey  and  inspection  of  hull,  engine,  and 
boilers  as  per  article  77  of  the  code  for  the  mercantile  marine. 

Foreign  steamers  wliich  shall  only  call  at  Italian  ports  provided  they  have  been 
inspected  in  accordance  with  the  laws  of  the  countries  to  which  they  belong,  and 
that  such  survey  has  been  \'is6ed  by  the  Italian  consul,  shall  not  be  required  to  be 
inspected  in  Italy. 

Art.  97.  *  *  *  1.  There  shall  be  at  least  one  life  belt  for  every  emigrant  and 
other  person  on  board,  and  same  shall  be  placed  near  the  respective  berths. 

2.  The  lifeboats  which  the  steamers  are  compelled  to  carry  shall  be  placed  under 
davits,  completely  ready  to  be  put  into  the  water,  and  corresponding  in  number  and 
capacity  to  what  is  specified  in  table  (G)  (British  table). 

If  the  normal  number  of  boats  under  davits  shall  not  be  sufficient  to  hold  all  persons 
on  board,  considering  that  each  adult  person  or  each  couple  of  children  from  1  to  10 
years  of  age  shall  be  allowed  10  cubic  feet,  additional  boats  in  wood  or  metal,  or  life 
rafts,  of  a  system  approved  by  the  commission  mentioned  in  article  139  of  the  present 
by-law  shall  be  added  thereto. 

******* 

(The  regulations  cover  about  100  pages,  and  cover  sanitary  details  and  many  other 
matters.) 

The  Chairman.  That  is  in  connection  with  the  license  features  o 
this  bill? 

Secretary  Redfield.  Yes.  The  vessels  which  are  now  being  con- 
structed in  this  country  are  divided  as  follows:  Sixty-four  tankers, 
71  cargo  boats,  10  passenger  and  cargo  boats,  16  colliers,  19  car 
floats,  and  50  of  other  classes,  a  total  of  230,  amounting  to  901,471 
gross  tons. 

Nearly  half  of  the  tonnage  is  made  up  of  oil  tankers.  The  General 
Board  of  the  Navy,  in  their  statement  as  to  the  vessels  necessary  to 


52         SHIPPING  BOAKD,  NAVAL  AUXIT.IARY,  AND  MERCHANT  MARINE. 

support  our  fleet,  put  no  limit  on  the  number  of  oil  vessels  required 
as  auxiliaries  for  the  Navy,  stating  that  they  desire  "  as  many  as 
possible."  The  number  of  colliers  desired  to  keep  the  Navy  up  to  its 
present  size  in  time  of  war  would  be  250. 

The  geographical  distribution  of  the  tonnage  now  building  is  as 
as  follows:  The  Delaware,  65  vessels,  292,000  gross  tons;  the  Chesa- 
peake, 43  vessels,  221,000  gross  tons;  Pacific  coast,  31  vessels,  173,000 
gross  tons;  Great  Lakes  and  rivers,  64  vessels,  142,000  gross  tons: 
New  England,  19  vessels,  68,000  gross  tons;  others,  8  vessels,  4,000 
gross  tons;  making  an  aggregate  of  230  vessels  and  901,000  tons. 
Of  these  16  are  over  10,000  tons;  33,  7,000  to  10,000  tons;  47,  5,000 
to  7,000  tons;  10,  4,000  to  5,000  tons;  and  16,  4,000  to  5,000  tons. 

There  is  one  yard  which  is  advertising  that  it  can  fill  an  order  for 
a  vessel  in  the  last  quarter  of  1916,  the  present  year  (that  means  in 
December) ;  another  ship  in  two  months  thereafter  and  another  in 
two  months  thereafter  and  another  in  two  months  thereafter.  This 
is  the  most  daring  statement  that  I  have  seen.  It  comes  nearer  to 
the  present  time  than  any  other  yard.  This  is  a  new  yard,  just 
organized  to  build  standardized  ships  all  alike,  and  with  that  excep- 
tion— and  that  exception  is  not  likely  to  last  many  days — I  doubt 
if  it  is  possible  to  obtain  a  ship  in  this  country,  at  least  mitil  the 
latter  part  of  1917. 

Our  department  is  now  building  vessels  in  Boothbay  Harbor,  Me.; 
Wilmington,  Del.;  Jacksonville,  Fla. ;  Long  Beach,  near  Los  Ange- 
les, Cal.;  Seattle,  Wash.;  and  Manitowoc,  Wis.  We  have  thus  had 
to  scatter  our  requirements  in  that  way  in  order  to  get  ships  con- 
structed at  all.  The  condition  of  the  ship-building  industry  in  this 
country  is  that  of  very  serious  congestion,  and  will  be  for  a  great 
while  to  come. 

Now,  Mr.  Chairman,  the  present  situation  is  quite  as  remarkable 
for  certain  novel  developments  in  the  merchant  marine  as  it  is  for 
its  extraordinary  activities.  In  the  early  part  of  last  year,  I  am 
glad  to  say,  through  the  assistance  of  one  of  our  commercial  attaches, 
the  Spanish  market  for  coal  was  opened  to  the  United  States,  and  a 
market  which  takes  3,000,000  tons  a  year  became  available  for  the 
first  time  to  us.  We  were  at  once  faced  with  the  fact  that  we  could 
not  get  the  coal  carried.  Incidentally,  it  may  be  of  some  importance 
to  note  that  one  of  the  ocean  fleets  that  are  building  now  is  for  a  coal 
company.  I  took  up  the  question  with  the  American  Bureau  of 
Shipping,  which  as  you  know  is  perhaps  our  most  severe  classification 
society,  and  which  represents  the  great  marine  insurance  companies, 
as  to  whether  the  well-known  New  England  coast  schooners  could  be 
used  in  the  trans-Atlantic  trade.  I  was  assured  at  first  that  they 
could  not  get  insurance  and  so  could  not  be  used.  In  answer  to 
my  question  as  to  whther  they  were  not  the  cheapest  known  ocean 
carriers  for  bulk  trade  for  long  distances  they  told  me  that  they  were. 
There  was  nothing  as  cheap.  And  to  make  the  story  short,  after 
some  negotiations  they  did  arrange  to  insure  the  big  wooden  schooners 
south  of  the  Ime  from  Cape  Finisterre  to  Chesapeake  Bay.  We  have 
been  sending  out  those  vessels,  carrying  4,000  or  5,000  tons  of  coal 
each,  to  Spain  from  Chesapeake  Bay.  We  could  send  more,  however, 
if  we  had  them.  That  led  me  to  ask  these  gentlemen  why  if  the 
American  coast  schooner  was  the  cheapest  kiiown  carrier  of  bulk 
freight  we  didn't  build  steel  schooners,  and  why  we  didn't  put  into 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  aiARTNE.         53 

thorn  internal-combustion  engines  which  would  drive  them  at  low 
speed,  and  if  they  would  not  be,  when  thus  made,  the  cheapest  ocean 
carriers  in  the  world.  On  consideration  they  answered  in  the  affirm- 
ative. The  correspondence  is  here.  The  matter  dropped  until  last 
fall.  Last  fall  the  firm  of  Cox  &  Stevens  in  New  York  designed  a  type 
of  vessel  on  those  lines,  and  very  promptly  thereafter  the  Smith  Ship- 
ping Co.  of  New  York  undertook  their  construction  in  the  yard  of  the 
Toledo  Ship  Building  Co.,  placing  a  contract  for  two  of  these  vessels 
at  first,  with  the  privilege  of  taking  two  more,  and  then  taking  the 
two,  and  then  shortly  after  taking  two  more,  so  that  there  are  under 
construction  in  that  yard  six  of  this  new  type  of  vessel,  of  which  the 
drawings  are  here. 

Mr.  Edmonds.  For  ocean  work  ? 

Secretary  Redfield.  For  ocean  work,  transoceanic  service. 

Mr.  Edmonds.  How  would  you  get  them  through? 

Secretary  Redfield.  Through  the  Welland  Canal.  They  are 
built  several  feet  short  of  the  canal-lock  length  in  order  to  get  through 
the  Welland  Canal.  I  am  so  interested  in  this  development  of  this 
ocean  work  that  I  had  our  superintendent  of  marine  construction, 
Mr.  E.  C.  Gillette,  go  to  the  Toledo  yards  and  look  into  the  matter 
himself.  He  reported  favorably  to  me  on  the  construction  of  the 
vessels  and  gave  an  estimate  of  their  operating  cost,  and  that  state- 
ment by  him,  as  of  December  9,  I  shall  be  very  glad  to  place  in  the 
hands  of  the  committee. 

(The  statement  referred  to  follows:) 

December  9,  1915. 

Toledo  Shipbuilding  Co.  has  contract  and  will  construct  (5  auxiliary  steel  schooners, 
each  havins:  4  masts,  400  horsepower  Bolinder  internal-combustion  propoUing  engine 
and  steam  boiler  for  auxiliary  winches,  etc. 

Contract  will  amount  to  about  ?225,()00  for  each  boat  completed,  but  their  contract 
price  is  for  the  hull  and  installation  of  machinery,  which  is  to  be  furnished  by  the 
owners.  Engines  cost  §16,000  each,  or  .$40  par  horsepower,  plus  other  steam  winches, 
boilers,  etc. 

Vessels  are:  Length  over  all,  2GI  feet;  beam,  43  feet  6  inches;  depth,  23  feet  6 
inches;  displacement  at  18  feet  draft  in  salt  water,  4,300  tons;  cargo  capacity,  3,000 
tons.     (One  thousand  tons  of  steel  in  vessel.) 

Calculations  are  for  a  steaming  radius  of  3,099  miles. 

They  built  similar  vessels  in  1912,  same  length  and  beam,  but  27  feet  6  inches  deep, 
for  8211,000,  fitted  with  steam  propulsion  of  1,200  horsepower,  which  were  put  in 
complete,  boilers,  engines,  auxiliaries,  etc.,  at  a  total  cost  of  $30  per  horsepower. 
Ten  par  cent  should  be  added  for  increase  in  cost  of  material  approaching  approxi- 
mately 8230,000.  Mr.  Calder  says  cost  of  vessels  about  same  comparing  steam  with 
oil  propulsion  on  account  of  extra  cost  of  sails,  masts,  auxiliary  gear,  and  machinery. 

If  vessels  can  be  run  between  ports  where  oil  is  obtainable,  the  oil-propalled  is 
probably  cheaper,  but  builders  question  reliability  of  oil  engines.  Crew  about  same; 
reduced  engine-room  force  offset  by  extra  men  needed  to  handle  sails. 

1200    horsepower  steam.  8  knots  per  hour  )3000  miles. 

IJ  pounds  coal  per  horsepower  hour.  

375 

1800  pounds  coal  per  horsepower  hour. 
375  hours  steaming. 

9000 
12e00 
5400 


2240)675000(301  tons  coal  consumed. 

6720  $2.  50  cost  coal  per  ton  on  Lakes. 


3000  $752.  50  cost  coal  for  3000  miles =25  cents  per  mile. 
2240 


54         SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

400  horsepower  oil  engine,  at  |  pint  per  horsepower=25  gallons  per  hour. 
375  hours. 
25 

1875 
750 

42  gallons=l  barrel)9375  gallons  consumed(223+ 

84 

97 
84 

135 
126 

9 

224  barrels  oil  consumed,  at  $1  per  barrel=$224;  cost  of  oil  for  3000  miles  full 
power=$0.074|  per  mile. 

The  builders  suggest  obtaining  a  prospectus  from  the  Smith  Shipping  Co.,  116 
Broadway,  N.  Y.,  the  owners  of  the  boats  to  be  built. 

Builders  do  not  know  the  complement  of  the  crew,  but  would  say  offhand: 

1  captain,  estimated $175 

3  mates,  1  at  |100,  2  at  §80 260 

3  quartermasters,  estimated,  $35 105 

3  engineers,  estimated,  1  at  $125,  2  at  $90 : 305 

3  oilers,  estimated,  $40 120 

9  sailors,  $30 270 

5  galleymen,  estimated,  1  at  $50,  2  at  $35,  2  at  $25 170 

27  Total per  month. .  1,  405 

E.  C.  Gillette. 

Mr.  Hardy.  Will  you  give  us  the  dimensions  and  tonnage  of  those 
vessels  ? 

Secretary  Redfield.  About  3,000  tons  cargo  capacity,  Judge 
Hardy,  and  the  vessels  are  261  feet  long  over  all,  43  feet  6  inches  beam, 
23  feet  6  inches  in  depth,  with  a  light  draft  of  10  feet  and  a  loaded 
draft  of  about  18  feet.     They  are  very  powerful  cargo  carriers. 

Mr.  Edmonds.  What  machinery,  tlr.  Secretary? 

Secretary  Redfield.  The  machinery  is  the  Bolinders  oil  engine,  and 
if  my  understanding  of  it  is  correct  that  engine  uses  0.55  of  a  pint  per 
horsepower-hour,  costmg  not  more  than  2^  cents  per  gallon. 

Iklr.  Hardy.  Is  there  any  reason  why  they  can't  build  vessels  of  a 
larger  type  of  that  style  ? 

Secretary  Redfield.  No,  sir;  none  that  I  know. 

Mr.  Edmonds.  Do  you  have  the  cost? 

Secretary  Redfield.  $225,000.  They  were  offered  a  premium 
over  that. 

Mr.  Edmonds.  That  includes  engines  and  everything? 

Secretary  Redfield.  As  I  recall  it,  these  vessels  in  comparison 
with  the  cheapest  type  of  Norwegian  vessel,  are  operated  in  the  pro- 
portion of  15  to  25  or  40  per  cent  less. 

But  we  found  on  gomg  to  the  Pacific  coast — 'Mr.  Gillette  went 
there  at  my  request — that  this  same  tj'pe  of  vessel  had  already  been 
developed  there  on  a  larger  scale.  I  wdl  give  you  the  drawings  of 
those  ships  on  the  Pacific  coast.  These  are  larger  vessels,  270  feet  in 
length,  and  built  for  lumber,  carrying  2,500,000  feet  each,  and  being 
47  feet  breadth  of  beam.  This  drawing,  also,  I  am  very  glad  to 
leave  with  the  committee  and  to  call  vour  attention  to  the  fact  that 


SHIPPING  BOAED,  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE.         55 

this  one  is  a  very  handsome  ship,  and  that  smce  we  got  that  drawing 
a  few  weeks  ago  five  of  them  have  been  put  under  construction. 
There  are,  therefore,  now  11  of  this  new  type  of  vessel,  which  was 
in  its  present  form  unheard  of  so  far  as  my  knowledge  goes  up  to  the 
1st  of  October.  There  are  11  under  construction  now,  steel  schoon- 
ers with  the  internal-combustioji  oil  engine,  which  is  a  well-known 
type  of  engine.  This  drawing  [indicating]  which  I  have  here  will 
illustrate  the  novelty  oi  the  t^^pe  of  ship  more  than  anythmg  else 
because  of  the  very  heavy  steel  construction  which  is  shown  there, 
intended  for  ocean  work. 

I  have  here  also  a  letter  from  Seattle,  dated  December  26,  1915, 
speaking  of  what  can  be  done  with  a  wooden  vessel  of  this  type  in 
the  trans-Pacific  trade  to  Sydney,  Austraha,  carrying  a  cargo  to 
Sydney,  going  to  New  Castle  for  coal,  and  coming  back.  The  entire 
cost  of  operation  and  of  construction  is  here  in  this  statement.  I 
will  file  it  with  the  committee  for  their  information.  I  simply  want 
to  point  out  to  the  committee  that  this  estimate  of  the  cost  of  opera- 
tions which  was  sent  in  to  me  voluntarily  points  out  that  on  a  total 
expense  for  the  round  Pacific  voyage  of  $15,473  there  were  net  earn- 
ings of  S29,176. 

(The  letter  follows:) 

Seattle,  Wash.,  December  26,  1915. 
Mr.  E.  A.  Brand, 

Assistant  Chief  of  Bureau  of  Foreif/n  and  Domestic  Commerce, 

Department  of  Commerce,  Washington,  D.  C. 
Dear  Sir:  Tliinking  that  the  data  might  be  of  use  to  you  there,  I  am  taking  the 
liberty  of  inclosing  copy  of  an  estimate  of  the  cost  of  construction  and  operation  of  a 
wooden  auxiliary  oil  motor  powered  sailing  lumber  schooner,  similar  to  these  planned 
by  the  Canadian  interests. 

The  figures  gi\'en  on  the  cost  of  construction  and  outfitting  have  been  carefully 
compiled  by  the  most  expert  man  in  the  wooden  hull  construction  line  on  the  Pacific 
coast  and  take  into  full  consideration  the  greatly  increased  cost  of  materials  since 
November  1. 

Those  given  on  the  cost  of  operation  are  taken  from  the  actual  operation  of  similar 
vessels  already  in  long  service  under  varjdng  conditions,  and  those  dealing  with  the 
lumber  end  have  been  secured  and  checked  by  experts  here,  being  based  upon  actual 
performances.     Hoping  to  be  of  service,  I  am, 
Yours,  very  respectfully, 

P.  L.  Bell. 

Vessel:  Dimensions,  250  by  44  by  17  feet  (depth  of  hold);  wooden  hull,  heavy  con- 
struction; material,  fir  with  galvanized  fastenings;  rigged,  fore-and-aft  4-masted  bald- 
headed  schooner;  1  deck;  engines,  two  160  brake  horsepower  direct  reversible,  model 
Ml. 2  cylinder. 

Bolinder  fuel-oil  motors,  marine  type. 

Speed,  average,  with  engines  fully  loaded,  7J  to  8  knots  per  hour. 

Gross  tonnage,  1,400;  net  tonnage,  1,250. 

Dead  weight  carrying  capacity,  2,000  tons;  lumber  carrying  capacity,  1,500  feet  b.  m. 

Cost  of  hull,  spars,  ironwork,  sails,  rigging,  anchors,  chains,  etc $82,  500 

Cost  of  engines 23, 500 

Cost  of  propellers,  stern  gear,  shafting,  etc 1,  250 

Labor  installing,  piping,  pumps,  whistle,  etc 2, 000 

Fuel  tanks — 750  barrels,  31,500  gallons,  120  tons,  giving  cruising  radius  of  56 
days  of  24  hoiu-s  with  engines  alone,  vessel  fully  loaded,  or,  with  efficiency 
of  sails  added  (25  per  cent),   70  days— tanks  cost  installed,  inspection 

requirements 3,  750 

Water  tanks,  100  barrels,  installed 500 

1  gallon  fuel  oil,  7.58  pounds;  1  barrel  fuel  oil,  42  gallons;  1  barrel  fuel  oil, 
320  pounds;  1  ton  fuel  oil,  6.25  barrels. 
2  double  drum  friction  winches,  anchor  hoist,  bilge  pump,  installed,  either 

steam  or  oil  motor  power 4,  850 

Auxiliary  engine,  lights,  dynamo,  wiring,  etc 1, 500 


56         SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MEECHANT  MAEINE. 

Miscellaneous  equipment,  nautical  instruments,  bedding,  stores,  etc.,  spare 
lines  and  gear $6,  000 

Total  cost  ready  for  sea 125,  850 

Engine  room  and  operating  expense. 

Fuel  consumption  guaranty,  12  gallons  per  hour,  cost $0.  26 

Lubricant,  per  hour,  cost .06 

»  

Cost  per  hoiu-,  one  engine .32 

Cost  per  hour,  twin  engine .64 

Cost  per  24  hours 15.  36 

Cost  per  month 460.  80 

Less  25  per  cent  efficiency  of  sails 115.  20 

Actual  cost  of  operation  per  month 345.  60 

Fuel  oil  at  $1  per  barrel  of  42  gallons;  lubricant  at  41  cents  per  gallon. 

Engine  room  crew  and  supplies. 

1  chief  en2;ineer $111.  00 

1  first  assistant  engineer 90.  00 

1  second  assistant  engineer 75.  00 

Provisions,  30  days 60.  00 

Supplies,  paint,  grease,  etc 10.  00 

345.  00 

Food,  per  day  per  man .65 

Food,  per  month  per  man 30.  00 

Food,  per  month,  11  men 220.  00 

SuppUes , 10.  00 


230.00 


Crew. 


1  captain 125.  00 

1  mate 100.  00 

1  mate 75.  00 

1  cook 50.  00 

1  boy 25.  00 

Encjine-room  force 345.  00 

6  sailors,  at  $50 300.  00 

Supplies 230.  00 

Expenses  per  month  in  port,  loading  and  discharging i,  250.  00 

Expenses,  engines  per  month 345.  00 

Total  expense  per  month  at  sea,  running  time 1,  595.  00 

Expenses  per  day  in  port,  loading  and  discharging 4] .  65 

Expenses  per  dav  at  sea,  running  time 53.  20 

Depreciation,  5  per  cent  on  $125,850 6,  292.  50 

Depreciation,  per  month 524.  35 

Insurance,  7  per  cent 8,  809.  50 

Insurance,  per  month 734. 10 

Insurance  liability,  1^  per  cent 1,  887.  75 

Insurance  liability,  per  month 157.  30 

Repairs,  per  year 2,  500.  00 

Repairs,  per  month 208.  35 

Total  per  vear 19.  6*^9.  75 

Total  per  month 1,  640.  80 

Total  per  day 54.  70 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         57 

Port  and  canal  charges. 

Canal  tolls per  net  ton. .  $1.  20 

Canal  pilotage per  foot  draft. .  1.  00 

Pilotajie.  New  York,  Norfolk,  Sj^dney 

Harbor  dues,  buoy  charges,  etc. ,  according  to  port 

Stevedoring: 

PugPt  Sound  mill  jioints.  contract  price per  M  feet. .  .  85 

Sydney,  discharging  lumber do .60 

New  Orleans,  discharging  lumber do .60 

Sydney,  coal.  loading per  ton. .  .  60 

Sydney,  coal,  trimming do .20 

Norfolk,  coal,  trimming do .30 

Norfolk,  coal,  loading do .08 

Seattle,  coal,  di'^charging do .40 

Victoria,  coal,  discharging do .50 

Seattle,  lumber,  loading per M feet..  1.  ^5 

Estimate  of  cost  per  thousand  feet  lumber,  round  trip  to  S'idney  uith  lumber  and  return  with 
coal  from  Newcastle,  N^ew  South  Wales. 

Distances: 

Seattle  to  Port  Townsend •. miles. .        40 

Port  Townsend  to  Sydney do 6,  786 

Total  distance do 6,  826 

Note. — Vessel  equipp3d  with  two  sets  double  drum  friction  winches  and  hatches 
arranged  to  load  250  M  feet  of  lumber  per  day.  This  calculation  is  based  upon  work- 
ing intensity,  and  does  not  take  into  consideration  the  time  lost  waiting  for  lumber 
to  be  delivered  alongside  by  the  mill 

Siattle  to  Sydney:    Distance,  6,826  miles,  at  192  knots  per  day;    speed 

maintained,  8  knots  per  hour days. .  36 

Loading  1,500  M  feet  of  lumber,  250  M  feet  per  day do 8 

Discharging do 6 

Total do. . . .  14 

14  days,  at  $41.65  per  day $583. 10 

36  days,  at  S53.20  per  day 1,  915.  20 

Pilotage,  Sydney,  4  cents  per  net  registered  ton  (1,250) 50.  00 

Wharfage,  Sydney,  1  cent  per  net  registered  ton  (1,250)  per  day 75.  00 

Stevedoring: 

Loading,  Puget  Sound,  85  cents  per  M  feet 1,  270.  00 

Dischareing,  Svdney,  60  cents  per  M  feet 900.  00 

Delay,  four  days,  at  S41.65 166.  60 

Harbor  and  light  dues,  8  cents  per  net  registered  ton 100.  00 

General  agency  and  customs 50.  00 

5, 109.  90 
Managing  agency  fees,  2^  per  cent  on  1 ,500  M  feet,  at  90,'s cond . .        821.  25 

Total  expense 5,  931. 15 

Cost  of  lajTing  down  1,000  feet  of  lumber,  Sydney 3.  95 

Plus  insurance,  depreciation,  and  repairs,  54  days,  at  $54.70  (.$2,953.80). . .  5.  92 

Sydney  to  Newcastle,  1  day,  at  ?53.20 5.3.  20 

Pilotage,  2  cents  per  net  registered  ton  light 25.  00 

Harbor  and  light  dues  (six  months) 100.  00 

General  agency  and  customs 50.  00 

Loading  coal,  2,000  tons  at  10  cents 200.  00 

Trimming  coal,  2,000  tons,  at  20  cents 400.  00 

Delay,  2  days,  loading  1,  at  .|41 .65 124.  95 

36  days,  at  $53.20 1,  915.  20 

Discharging,  Seattle,  at  40  cents  per  ton 800.  00 

Discharging  5  days,  at  $41.65  ($208.25) 3,  668.  35 

3,  876.  60 


58         SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Cost  of  laying  down  1  ton  of  coal  at  Seattle $1.  83 

Plus  insurance,  depreciation,  and  repairs,  45  days,  at  $54.70 3. 17 

Agency  fees  of  2^  per  cent,  conditional 

Earnings : 

1,500  M  feet  of  lumber  at  90/s  ($23.10) 34,  650.  00 

2,000  tons  of  coal,  at  $5  per  ton 10,  000.  00 


Total  earnings 44,  650.  00 

Total  expenses: 

Voyage  out  with  lumber,  plus  insurance,  etc 8,  884. 95 

Voyage  back  with  coal,  plus  incurance,  etc.,  and  agency  fee 6,  588. 10 

Total  expense 15,  473. 05 

Net  earnings 29, 176.  95 

Time  for  round  trip,  99  to  100  days;  3  round  trips  per  year.  Approximately  net 
income  of  vessel  per  year,  $90,000. 

Notes. — When  considering  speeds,  it  should  be  borne  in  mind  that  the  Bolind'  r 
engine  is  rated  on  brake  hors  power  and  not  on  "indicated  hors  power"  nor  the 
theoretical  rating  of  the  gas  engine.     The  rating  of  this  engine  means  the  effective 

Eower  delivered  on  the  tail  shaft.  Notice  size  of  screws  fitted  to  the  twin  160-brake 
ors  power  engines  in  the  Fingal. 

It  will  be  readily  seen  that  this  estimate  depends  upon  the  ability  of  this  vess  1 
to  maintain  an  average  speed  of  8  knots  an  hour.  Such  a  vess?l,  equipped  with  these 
economical  and  reliable  fuel-oil  motors,  occupjdng  small  space,  not  exceeding  from 
3  per  cent  to  4  per  cent  of  the  entire  hold  space — the  fuel  tankage  required  not  excec  d- 
ing  200  tons — is  able  to  do  this,  as  has  been  shown  by  the  actual  operation  of  some 
30  and  more  large  vessels  thus  equipped  and  in  operation  for  some  time. 

There  is  absolute  proof  that  such  a  vess  4  thus  equipped  and  as  herein  described 
can  maintain  an  average  speed  of  8  knots  throughuot  a  voyage,  combining  the  sail 
power  with  that  of  the  engine,  the  sails  having  been  found  to  be  from  20  per  cent  to 
35  p'^r  cent  efficient,  according  to  the  rig  and  voyage. 

Ihis  calculation  gives  coal  as  the  return  cargo  from  New  South  Wales,  as  cargoes 
of  coal  can  always  be  had,  and  as  it  also  shows  a  minimum  rate  in  order  to  make  this 
calculation  conservative. 

To  convey  some  idea  of  what  is  being  done  in  this  line  we  call  attention  to  the 
number  of  vessels  now  under  construction  in  the  United  States  of  this  character. 

Add  salary  of  captain  and  one  engineer  during  repair  period  of  the  year. 

Secretary  Redfield.  The  expense  of  running  the  ship  is  there 
included,  so  that  in  this  respect  we  are  facing  an  entirely  novel  condi- 
tion in  our  merchant  marine  in  constructing  a  new  type  of  ships, 
developed  out  of  old  types. 

That  is,  however,  not  the  most  remarkable  feature  that  awaits  the 
United  States,  if  we  act  with  reasonable  promptness  at  this  time. 
I  should  hesitate  to  make  a  statement  which  I  am  about  to  lay  before 
the  committee  if  it  did  not  come  from  an  authority  which  will 
hardly  be  questioned,  and  it  is  so  important  in  the  future  of  American 
shipbuilding  that,  as  I  suggested,  I  will  venture  to  read  it  if  I  have 
the  chairman's  permission. 

American  Bureau  of  Shipping, 

New    York,  January  22,  1916. 
Hon.  William  C.  Redfield, 

Secretary  Department  of  Commerce,  Washington,  D.  C. 
My  Dear  Mr.  Secretary:  As  you  are  not  likely  to  be  in  this  city  prior  to  Febru- 
ary 23,  and  knowing  your  sincere  desire  to  facilitate  the  development  of  American 
commerce,  I  take  the  liberty  of  submitting  the  following  for  your  kind  consideration. 
*  *  *  *  -X-  *  * 

_  The  present  type  of  construction  has  brought  about  a  ship  of  a  comparatively  square 
bilge  supported  internally  by  margin  plates  of  the  double  bottom,  which  in  turn 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         59 

accommodates  any  accumulation  of  bilge  water  and  concentrates  its  flow  to  whatever 
type  the  pumping  system  may  be  adapted. 

This  class  of  construction  requires  the  cutting  of  all  frames  at  the  bilge  and  imiting 
them  with  the  floors  by  means  of  gusset  plates,  thus  doing  away  with  the  expensive 
and  cumbersome  method  of  bending  frames  in  one  piece  from  keel  to  gunwale.  All 
of  the  members,  therefore,  of  the  modern  ship  anticipates  comparatively  straight 
pieces  with  the  exception  of  the  stem,  cant  frames,  and  stern  frame. 

It  is,  therefore,  now  possible  to  readily  ship  on  flat  cars  or  by  water  transportation, 
all  the  members  ready  for  assembling  of  any  vessel  of  the  type  herein  referred  to. 

The  best  method  of  construction  now  anticipates  the  punching  of  all  rivet  holes 
from  one-sixteenth  inch  to  one-eighth  inch  scant,  preparatory  to  the  members  being 
assembled  when  the  punch  holes  of  scant  diameter  are  reamed  with  pneumatic  tools, 
after  the  plates  and  members  are  assembled  and  service-bolted:  all  riveting  being 
done  with  pneumatic  holders  on  and  pneumatic  riveters,  preceding  which  all  holes 
are  reamed  by  pneumatic  tools  and  are  therefore  made  fair  in  position.  Two  men 
with  one  of  these  reamers  will  ream  and  make  fair  to  standard  sizes,  from  1,400  to 
1,600  holes  a  day. 

Secretary  Redfield.  The  description  follows  closely  the  construc- 
tion of  steel-frame  buildings. 

With  these  conditions  before  us  it  seems  to  me  that  the  time  has  arrived  when 
g'-eat  steel  companies  should  undertake  the  preparation  and  fabrication  of  cargo 
ships  complete,  in  batches  of  at  least  10  of  a  kind,  to  be  reassembled  and  riveted  up 
on  our  river,  lake,  or  seacoast  in  the  same  way  and  manner  in  which  such  companies 
are  now  supplying  the  members  for  elevated  railroads  and  bridge  construction;  the 
plates  for  such  vessels  first  to  be  approved  by  the  classification  society  representing 
the  underwriting  interest,  which  in  turn  would  insure  the  lowest  rates  of  insurance 
on  the  vessel  when  constructed  under  superintendence  and  svu'vey. 

Several  shipyards  in  existence  on  the  line  of  the  Ohio  and  Mississippi  Rivers  could 
thus  be  utilized  to  great  advantage  in  assembling  vessels  of  the  type  referred  to, 
which  would  insure  the  utilization  of  a  type  of  labor  of  the  greatest  value  at  seasons 
when  not  properly  employed  in  agriculture. 

I  incline  to  the  belief  that  the  right  type  of  man  might  take  up  this  matter  with  some 
of  the  subordinate  companies  of  the  United  Steel  Co..  and  carry  it  through  to  a  very 
successful  issue;  and  the  time  and  circumstances  seem  to  be  opportune  for  such  an 
undertaking. 

The  model  of  such  vessels  should  first  be  tested  in  the  Governmental  tank  at  Wash- 
ington, which  would  give  lines  of  least  resistance  in  specific  displacement. 

Steam,  reciprocating,  turbine,  or  internal  combustion  engines  could  be  contracted 
for  on  specific  lines  suitable  to  the  vessels,  during  the  progress  of  their  construction  and 
in  this  way  standard  units  of  commerce  of  assured  excellence  could  be  produced 
which  would  offer  the  greatest  facility  to  owners,  merchants  or  shippers,  on  assured 
lines  of  efficiency. 

Should  you  kindly  consider  this  brief  outline  worthy  of  consideration,  it  will  fur- 
nish me  great  plea.«ure  to  facilitate  any  ideas  which  you  may  have  upon  the  subject 
in  the  interest  of  all  concerned. 
Very  truly  yours, 

E.  Platt  Stratton. 

Secretary  Redfield.  The  suggestion  was  of  such  original  character 
that  I  submitted  it  at  once  to  the  naval  constructor,  Bureau  of  Light- 
houses, and  he  replied  under  date  of  January  29th,  "I  beg  to  state 
that  I  have  considered  the  proposition  as  outlined  therein,  and  in  my 
opinion  it  is  entirely  feasible,  provided  that  a  suitable  type  of  design 
of  vessel  to  meet  the  commercial  demand  be  settled  upon,"  and  the 
report  proceeds  in  approval. 

I  then  returned  the  matter  to  the  American  Bureau  of  Shipping 
and  asked  them  if  they  would  be  kind  enough  to  reconsider  it  with 
a  great  deal  of  care  and  advise  me  finally  what  I  could  with  some 
confidence  lay  before  this  committee  as  a  statement  shov/ing  the 
possibilities  in  it  as  a  method  of  constructing  vessels.  You  are  all 
aware,  gentlemen,  that  the  structural  steel  industry  is  an  American 
industry.     The  buildings  of  Europe  are  not  built  of  structural  steel. 


60         SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

They  do  not  build  steel  frame  buildings,  as  we  build  them,  iii  any- 
other  country.  I  say  never,  meaning  very  rarely,  if  ever.  It  is  an 
American  industry,  which  we  have  carried  to  a  greater  height  of 
perfection  than  any  other  country,  and  if  it  is  possible,  as  these 
practical  gentlemen  say,  to  utilize  this  method  of  constructing  hulls, 
there  is  no  country  in  the  world  prepared  to  compete  with  us  in 
that  way. 

In  response  to  my  inquiry  I  received  this  letter,  dated  February 
8,  of  which  I  will  read  a  brief  portion: 

If  any  one  of  the  great  steel  companies  of  this  country  could  be  induced  to  start  out 
on  the  plan  herein  enunciated  for  cargo  ships,  I  think  that  within  two  years  we  could 
be  launching  vessels  from  one  to  five  thousand  tons  cargo  capacity,  in  many  sections 
of  the  country.  There  are  many  wooden  shipyards  on  our  coast,  bays,  and  tributaries 
where  the  assembling  of  ships  could  be  very  advantageously  conducted,  with  far  less 
difficulty  and  much  more  expedition  than  our  ocean-going  fleet  of  a  half  century  ago 
was  hewn  out  and  assembled  from  material  existent  within  our  forests. 

And  then  follows  his  formal  statement  in  detail  of  the  method  of 
constructing  tha  vessels. 

[By  E.  Piatt  Stratton,  supervisor  of  the  American  Bureau  of  Shipping.] 

Signs  multiply  of  a  disposition  in  the  United  States  so  to  standardize  the  construction 
of  cargo  types  of  steamships  as  greatly  to  reduce  their  cost.  This  tendency  is  to  be 
encouraged  in  every  way  possible,  since  its  successful  development  will  go  a  long  way 
toward  making  the  United  States  entirely  independent  of  other  countries  in  the  con- 
struction of  the  ships  in  its  foreign  carrying,  as  the  country  always  has  been  independ- 
ent of  foreign  countries  in  the  construction  of  ships  for  its  domestic  carrying. 

In  the  construction  of  ships  for  the  carriage  of  passengers  and  freight  and  in  the 
construction  of  the  higher-class  swift  leviathans  that  carry  passengers,  mails,  and 
express  standardization  is  not  practicable;  but  in  the  construction  of  the  higher  types 
of  ships  the  United  States  is  not  so  far  behind  shipyards  of  other  countries  in  the  matter 
of  cost  as  it  is  in  the  construction  of  the  purely  cargo  type  of  ship. 

SOME   CONSTRUCTION   DETAILS. 

Cargo  steamships  of  from  1,000  to  10,000  deadweight  capacity  on  a  block  coefficient 
of  from  75  to  80  per  cent  of  the  cube  of  their  length,  breadth,  and  depth,  and  a  standard 
rate  of  speed  not  to  exceed  12  knots,  is  the  trend  and  the  type  most  useful  for  general 
trade.  Such  vessels  are  now  built  with  double  bottoms  for  water  ballast,  which  have 
become  more  and  more  of  a  necessity  to  facilitate  the  handling  of  the  ships  when 
light  or  in  motion  without  cargo.  Double  bottoms  also  offer  great  facihty  for  the 
storage  and  use  of  any  of  the  varieties  of  liquid  fuel,  which  frequently  are  found  to 
be  more  advantageous,  if  not  more  profitable,  than  coal,  particularly  when  the  cost  of 
stowing  it  in  the  ship's  bunkers  and  the  cost  of  firing  it  with  man  power  is  considered. 

Vessels  of  this  type  of  construction  have  I  rought  a  out  an  arrangement  to  protect 
cargoes  from  bilge  water,  through  flat;  floors,  full  or  square  bilges  supported  internally 
by  the  margin  plates  of  the  double  bottoms,  which  in  turn  form  gutters  or  bilges. 
This  meihod  of  construction  necessitates  the  b'eaking  of  the  continuity  of  all  ships' 
floors  and  frames  at  the  turn  of  the  bilge,  properly  flanged  "gusset  plates"  supplying 
the  necessary  strength  at  the  points  where  they  are  reunited.  This  does  away  com- 
pletely with  the  heretofore  expensive  and  somewhat  cumbersome  method  of  rolling 
frames  in  great  lengths  and  then  reheating  and  banding  them  preparatory  to  their 
being  assembled  in  position  to  receive  the  plating  of  the  ship. 

The  methods  of  metal  ship  construction  heretofore  in  use  has  involved  the  making 
of  templates  for  each  plate,  angle,  and  shape  used  in  the  vessel's  construction  and  a 
vast  amount  of  work  in  the  shipyard  involving  fitting,  bending,  punching,  failing, 
and  riveting.  In  vessels  of  large  dimensions  many  of  these  separate  parts  are  of  such 
weight  and  size  as  to  require  machinery  and  gangs  of  workmen  to  handle  them  in 
the  different  processes  of  assem  Ung,  fitting,  and  riveting  them  when  in  their  proper 
positions  in  the  ships. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         61 

THE    GREAT    STEEL    PLANTS    SHOULD   TAKE    HOLD. 

In  this  connection,  think  what  would  be  the  cost,  detention,  and  protracted  delay 
if  our  elevated  railroad  structures,  bridges,  fireproof  hotels,  storehouses,  and  rpilroad 
depots  were  built  after  such  a  manner.  The  only  condition  that  seems  to  justify 
such  a  method  in  ship  construction  is  the  necessity  of  constructing  the  vessel  where 
and  when  as  an  assembled  mass  it  may  be  launched  where  it  will  receive  its  eouip- 
ment  and  fittings  af  oat,  all  of  which  go  to  make  the  complete  and  perfect  cargo  ship, 
or,  as  President  'Wilson  has  characterized  it,  "a  national  shuttle  of  industry."  The 
opportunity  is  now  open  for  some  of  our  great  steel  plants  to  prepare  models  of  a  series 
of  cargo  steamships  of  standard  designs  and  varying  tonnage,  submitting  the  models 
to  tank  experiments  in  advance,  say,  under  the  supervision  of  the  Navy  Department, 
in  order  to  secure  vessels  with  lines  of  least  resistance;  also  having  tables  of  scantlings 
approved  by  the  national  inspection  service  and  the  American  underwriters,  thus 
assuring  the  lowest  rates  of  marine  insurance  on  the  vessels  w  hen  completed.  At  the 
mills  all  parts,  whether  plates,  angles,  or  shapes,  would  be  of  standard  dimensions, 
sheared  and  punched  to  standard  templates,  all  holes  being  punched  and  left  from 
one  sixteenth  to  one-eighth  of  an  inch  scant  to  allow  for  reaming  to  standard  gauge. 
When  the  parts  shall  have  been  assembled  for  service,  bolting  and  riveting  at  the  point 
or  place  of  final  fabrication,  the  reaming  of  holes,  riveting,  chipping,  and  calking,  all 
then  being  done  by  pneumatic  tools. 

Such  methods  would  insure  the  prompt  rehabilitation  of  many  of  the  Nation's 
original  shipbuilding  plants  for  this  assembling  and  fabrication  of  hundreds  of  slipsof 
various  sizes,  which  could  not  by  any  other  method  be  dealt  vith.  it  can  therefore 
be  readily  understood  that  the  work  at  the  coast  or  in  the  shipyard  would  only  be 
one  of  assembling  and  riveting  up  the  parts  furnished  by  the  steel  mills  to'  the 
raih-oads  for  delivery  at  the  point  of  fabrication. 

DUPLICATION    OF  PARTS. 

The  motive  power  for  such  standardized  vessels  for  fixed  rates  of  speed  can  be 
reliably  furnished  as  specialties  of  manufacture  in  duplication  in  the  same  manner 
in  which  standard  types  of  ])umps,  turbines,  and  internal  combustion  engines  are  now 
manufactured  and  supplied  by  such  establishments  as  the  General  Electric  Co.,  the 
Westinghouse  Co.,  William  Cramp  &  Sons,  W.  &  A.  Fletcher  Co.,  and  the  Babcock  & 
Wilcox  Co.,  as  well  as  other  boiler  companies  that  now  supply  large  installations  of 
boiler  equipment. 

Such  methods  of  ship  construction  and  equipment  anticipate  the  utilization  of  many 
of  our  original  wooden  shipyards,  since  the  chief  requirements  will  be  facilities  for 
assembling  the  various  parts  of  the  ship  and  launching  the  hull  when  fully  fabricated, 
for  there  are  still  many  valuable  sl!i])building  locations  along  the  water  front  of  the 
Ohio  and  Mississippi  rivers,  and  the  co?st,  bays  and  tributaries,  at  points  where  labor 
is  to  be  found  in  abundance  and  of  a  character  that  can  be  utilized  to  the  greatest 
advantage. 

STEEL   MILLS   AS   INITIAL   SHIPBUILDING   PLANTS. 

Our  country's  great  steel  works  now  possess  the  facilities  in  capacity,  if  not  in  detail, 
for  furnishing  the  finest  shipbuilding  n  aterial  at  as  low  prices  as  that  of  any  other 
country. 

The  perfection  of  the  various  details  in  skip  construction  herein  referred  to  in 
outline  will  doubtless  quickly  bring  the  Ihiited  States  to  the  front  as  the  first  si  ip- 
building  nation  of  the  earth  in  the  production  of  standard  cargo  carriers  unequalled  by 
any  other  nation  possessed  of  like  con  nercial  facilities,  to  wl  if  h  our  unlin  itcd  quan- 
tities of  cheap  materials  will  greatly  contribi'te.  ^A  ith  cargo  carriers  thus  under  such 
good  headway  our  shipyards  will  graduaUy  becop  e  expert  in  the  construction  of  all 
of  the  types  of  merchant  ships  that  go  to  n  ake  up  a  general  marine.  The  opportunity 
and  all  of  the  accessories  necessary  for  success  are  now  ours. 

Secretary  Redfieid.  It  was  not  ¥  ith  ai^y  idea,  Mr.  Chairman,  of 
this  nature  that  we  did  what  was  done  in  the  way  of  developing  this 
bill.  This  has  all  come  up  since  the  matter  was  thought  of,  and  is 
simply  a  very  interesting  illustration  of  what  has  been  possible  in 
other  lines  of  work,  and  what  new  types  of  vessels  may  be  possible 
hereafter. 

32910—16 5 


62         PHIPPI^'G  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

The  Chairman.  These  developments  are  matters  that  this  Ameri- 
can Shipping  Boar4  can  take  advantage  of  in  developing  these  new 
types  ? 

Secretary  IIedfield.  Yes;  we  are  now  building  a  vessel  for  the 
Lighthouse  Service  which  could  have  been  constructed  under  this 
new  method  if  we  had  knovai  of  it,  and  if  there  was  anybody  ready 
to  take  it  up,  and  in  so  doing  we  would  have  saved  very  largely,  I 
think,  in  the  cost  of  our  construction. 

Mr.  Hardy.  Is  there  any  reason  why  such  building  might  not  be 
done  in  competition  with  the  world  ? 

Secretary  Redfield.  I  can  see  no  reason  why  any  country  in  the 
world  coulcl  compete  with  us  in  construction  of  that  kind. 

Mr.  Hardy.  .So  at  least  that  class  of  vessels  does  not  need  to  be 
protected  ? 

Secretary  Redfield.  I  thhik  other  peoples  would  need  to  be  pro- 
tected against  this  class  of  vessels. 

Mr.  Edmonds.  No  legislation  is  needed. 

Secretary  Redfield.  None. 

Mr.  Hardy.  One  question  is  suggested  to  me.  Could  that  same 
process  of  construction  be  utilized  in  the  building  of  larger  than  5,000- 
ton  vessels  ? 

Secretary  Redfield.  Yes;  these  call  for  5,000  tons.  It  should  be 
as  good  for  20,000.  It  is  only  a  question  of  size  of  parts.  The  process 
is  the  same. 

Mr.  Hardy.  You  said  there  could  be  vessels  up  to  5,000  tons? 

Secretary  Redfield.  That  was  simply  because  they  could  be  turned 
out  quickly. 

Mr.  Edmonds.  I  want  to  say,  Judge,  that  I  spent  a  day  on  a 
Chinese  vessel  of  8,000  tons  which  had  one  of  those  oil-burning 
engines.     I  got  fuU  of  oil  seeing  it  operate 

Mr.  Hardy.  It  was  built  like  this  ? 

Mr.  Edmonds.  No;  it  had  8,000  tons  capacity. 

Mr.  Hardy.  What  I  was  wondering  about  was  this  new  method  of 
construction. 

Mr.  Edmonds.  That  would  be  true  of  any  ship.  I  did  not  bring 
that  up  as  a  matter  of  comparison  with  steel.  Steel  could  go  in  any 
ship. 

Secretary  Redfield.  Any  ship  of  that  construction. 

Mr,  Edmonds.  For  freight  carrying? 

Secretary  Redfield.  Yes. 

Mr.  Byrnes.  Has  one  been  built  in  this  way  ? 

Secretary  Redfield.  No.  I  wish  we  had  known  about  this. 
The  suggestion,  however,  comes  from  practical  ship  men. 

Mr.  Edmonds.  And  is  approved  by  the  naval  constructor  ? 

Secretary  Redfield.  Yes;  entirely  so. 

I  will  place  before  the  committee  a  report  of  Mr.  Adrian  H.  Boole, 
of  the  Interstate  Commerce  Commission,  who  at  the  request  of  the 
Secretary  of  the  Treasury  has  been  studying  existing  conditions  in 
the  steamship  trade  in  this  country,  and  it  is  accompanied  by  volu- 
minous and  interesting  tables.  I  will  say  that  the  substance  of  that 
is  that  in  ton-carrying  capacity  available  in  the  year  ended  June  30, 
1915,  in  our  ports  we  were  short  as  compared  with  the  previous  year 
about  4,500,000  tons  carrying  capacity,  at  a  time  when  the  demand 
on  us  was  greater  than  ever  before  in  our  history.     There  were  more 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         63 

ships  and  they  made  more  voyages.  But  they  were  so  slow  that 
the  total  number  of  tons  capacity  that  left  our  ports  was  about 
4,500,000  short  of  what  it  was  in  the  previous  year,  and  though  we 
were  at  once  in  the  greatest  need  of  shipping  we  were  at  once  in  the 
greatest  possible  lack,  and  that  condition  is  accentuated. 

Report  on  Tabulations  Compiled  in  Foreign  STEAiMsnir  Investigation, 

January  29,  1916, 
To  the  Secretary  of  the  Treasury. 
The  Secretary  of  Commerce, 

The  Chairman  of  the  Interstate  Commerce  Commission; 
Pursuant  lo  the  request  set  fortli  in  a  letter  from  the  Pre?ident.  datedJuly 22. 1915, 
to  the  chairman  of  the  Interstate  (  ommerce  Commission,  there  has  :  een  a  cooperative 
endeavor  etween  the  Treasury  Department,  the  Department  of  Commerce,  and  the 
commission  to  inqiiire  into  the  matter  of  ocean  transportation  etween  this  country 
and  Central  and  South  jXmerica.  The  participation  of  the  commission  in  this  mat- 
ter has  een  neces.-aiily  limited,  since  it  has  een  held  that  the  powers  of  the  com- 
mission do  not  extend  to  commerce  overseas.  A  preliminary  examination  was  made 
1  y  the  commission's  examiners  of  certain  records  in  the  "freight  offices  of  several 
interstate  railroads  in  New  York  (  ity  paititipating  in  for?i2:n  commerce  for  the  pur- 
pose of  ascertniniag  whether  the  records  of  the  cariiers  srbject  to  the  act  to  regulate 
commerce  would  furni-h  any  information  on  the  si  bject  and  to  determine  whether 
or  not  there  was  a  full  complirnce  with  the  requirements  of  the  act  in  connection 
with  the  matters  involved  in  this  inquiry.  The  asic  data,  which  i=!  presented  here- 
with in  ta  ular  form,  have  een  compiled  chiefly  •  y  forces  of  the  Treasury  Depart- 
ment and  the  Department  of  Commerce. 

This  report  errbraces  the  commercial  movement  of  shipping  to  and  from  28  ports 
in  the  United  States  and  all  foreign  countiies  except  Canada  for  the  12  months  ended 
July  ".1.  1!)14,  and  the  12  months  ended  July  31,  1915.  The  movement  of  shipping 
to  and  from  Canada  is  omitted  ecause  (1)  approximately  75  per  cent  of  the  wateiv 
1  orne  traffic  was  canied  on  the  Great  Lakes  in  vessels  which  ordinaiily  are  unavail- 
a  le  for  over-sea  commerce:  and  (2*  of  the  remaining  25  per  cent  moving  over  river 
and  ocean  routes  fully  four-fifths,  consisting  of  ulk  cargoes  of  coal,  oil,  and  lumber, 
was  canied  in  seagoing  l.arges,  schooners,  and  small  steamers  wholly  unfitted  for 
over-sea  service. 

The  tabulations  of  vessel-tons  entered  and  cleared,  herein  shown,  represent  91  per 
cent  for  the  first  12  months  and  90  per  cent  for  the  second  12  months,  of  the  entries  and 
clearances  reported  by  the  Department  of  Commerce,  for  the  two  fiscal  years  endecl 
June  30,  1914  and  1915,  respectively,  when  excluding  Canada.  The  difference  irt 
results  here  stated  is  explained  by  the  facts  that  different  fiscal  periods  are  used  and, 
in  the  present  report,  all  vessel  movements  between  minor  United  States  ports  and 
foreign  countries  are  eliminated  as  well  as  entries  and  clearances  at  coaling  and  way- 
ports  on  voyages  to  or  from  other  domestic  ports. 

The  vessel  movement  is  based  upon  ana  confined  to  entries  and  clearances  from  and 
to  foreign  countries  and  the  following-named  ports  of  the  United  States,  viz:  Portland, 
Me.;  Boston,  Mass.;  New  York,  N.  Y.;  Phil.adelphia,  Pa.;  Baltimore,  Md.;  Newport 
News,  Ya. ;  Norfolk.  Va.;  Charleston,  S.  C.;  Savannah,  Ga.;'-  Fernandina,  Fla. ;  Jack- 
sonville, Fla.;  Key  West,  Fla.;  Tampa,  Fla.;-'  Pensacola,  Fla. ;^  Mobile,  Ala., ^  New 
Orleans,  La.;'  Port  Arthur,  Tex.;  Galveston,  Tex.;  Port  Aransas,  Tex.;  Sabine,  Tex.* 
San  Diego,  Cal.;  Los  Angeles  (San  Pedro),  Cal.;  San  Francisco,  Cal.;  Astoria,  Oreg.; 
Portland,  Oreg. ;  Port  Townsend,  Wash.;  Seattle,  Wash.,  and  Tacoma,  Wash. 

It  is  believed  the  comparisons  herein  made  will  fairly  illustrate  the  mercantile  con^ 
ditions  prevailing  for  two  equal  periods,  existing,  respectively,  immediately  before 
and  after  the  outbreak  of  the  great  war. 

The  subject  matter  is  presented  under  six  separate  headings  in  the  following  order; 

(1)  Number  of  vessels. 

(2)  Yessel-ton  efficiency.'' 


1  Includes  entries  and  clearances  at  Brunswick,  Ga. 

2  Includes  entries  and  clearances  at  Port  Tampa,  Fla. 
»  Includes  entries  and  clearances  at  Gulfport,  Miss. 

*  The  term  "\essel-ton  eTiciency,"  as  used  in  this  report,  expresses  in  units  of  100  cubic  feet  (1-ton  reg- 
istry) the  amount  of  vessel  space  made  available  for  frei}.'ht  and  pa.ssenpers  bj'  the  number  of  vovages 
performed  durinir  a  <jiven  period.  A  vova'^e,  as  used  in  this  report,  constitutes  one  entry  and  one  clearance 
in  the  United  States  of  one  vessel  on  the  same  vo^'a^e. 


64         SHIPPING  BOARD.  NAVAL  ATTXTTJARY,  AND  MERCHANT  MARINE. 

(3)  Currents  of  trade  (ocean  routes) . 

(4)  Imports  and  exports. 

(5)  Ocean  freight  rates. 

(6)  Marine  insurance. 

The  data  of  which  this  report  is  intended  to  be  an  explanation  are  eet  forth  in 
six  appendices  comprising  14  tables  which  accompany  and  form  a  part  of  the  report. 
These  appendices  are  as  follows: 

Appendix  A.  Number  and  net  tonnage  of  sail  and  steam  vessels  engaged  in  foreign 
trades  of  the  United  States. 

Table  I.  Vessels  in  service  during  years  ended  July  31,  1914,  and  1915. 

Table  II.  Vessels  in  service  during  year  ended  July  31,  1915,  only. 

Table  III.  Foreign  vessels  admitted  to  American  registry  under  act  of  August 
18,  1914. 

Table  IV.  Vessels  withdrawn  for  causes  of  war. 
Appendix  B.  Entries  and  clearances  of  sail  and  steam  vessels  in  foreign  trades  of  the 
United  States. 

Table  I.  Distribution  by  domestic  ports. 

Table  II.  Distribution  by  foreign  countries. 

Table  III.  Distribution  by  sail  and  steam  vessels. 

Table  IV.  Distribution  by  each  domestic  port  and  foreign  country. 
Appendix  C.  Foreign  commerce  of  the  United  States. 

Table  I.  Values  of  principal  imports  and  exports. 
Appendix  D.  Ocean  freight  rates  by  months. 

Table  I.  Charter  rates. 

Table  II.  Berth  rates. 
Appendix  E.  War-risk  insurance  rates  of  premium. 

Table  I.  Rates  published  by  the  United  States  Bureau  of  War  Risk  Insurance. 

Table  II.  Rates  quoted  by  insurance  companies  on  war  risks. 
Appendix  F.  Passenger  movement  between  United  States  and  foreign  countries. _ 

Table  I.  Aliens  admitted,  departed,  debarred,  deported,  and  citizens  arrived 
and  departed,  by  ports. 

NUMBER   OF   VESSELS. 

Recorded  entries  and  clearances  of  merchant  vessels  at  the  28  United  States  ports 
under  review,  for  the  two  peiiods  stated,  shows  that  during  the  first  yearthere  were 
in  service  59?.  in'li^■i'hlal  sail  and  2,7.'^0  indl\idual  steam  vessels,  aggregating  505,818 
tons  net  register  of  sail  and  7,829,832  tons  net  regi.?ter  of  steam  A'essels,  a  total  of  3,323 
vessels,  wiih  an  aggregate  carrying  power  for  one  voyage  of  8,335,650  tons  of  100  cu  ic 
feet  each. 

During  the  second  year  there  were  in  ser^ire  747  individual  sail  and  3.350  individual 
steam  vessels  aggregating  736,459  tons  net  register  of  sail  and  8.618,336  tons  net  register 
of  steam  vessels,  a  total  of  4.C97  vessels,  with  an  aggregate  carrying  power  for  one  voyage 
of  9,354.795  tons  of  100  cubic  feet  each.  The  increase  during  the  second  year  as  com- 
pared v.-ith  the  first  year,  stated  in  per  cent,  is  as  follows: 


Increase  in— 


Ve"?el  units 

Carrying  power. 


Sail 
vessels. 


Per  cent. 
25.97 
45.60 


Steam 
vessels. 


Per  cent. 
22.71 
10.08 


Total  sail 

and  steam 

vessels. 


Per  cent. 
23.29 
12.23 


For  the  first  year  there  were  774  less  vessels  of  1,019,145  less  net  registered  tons 
employed  in  American  foreign  commerce  than  there  were  the  second  year.  The  fact, 
however,  that  23.29  per  cent  more  vessels  of  but  12.23  per  cent  more  carrying  power 
were  in  the  service  the  second  year,  suggests,  as  indeed  the  fact  is,  that  the  rearrange- 
ment of  vessels  in  the  two  periods,  resulted  in  the  substitution  the* second  year  of 
smaller  and  slower  vessels  in  the  aggregate,  for  those  in  service  the  first  year.  The 
average  carrving  capacity  per  vessel  decreased  from  2,508  tons  the  first  year  to  2,283 
tons  the  second  year. 

Considering  separately  sail  and  steam  vessels,  it  will  be  seen  that  the  carrying  power 
of  sail  vessels  increased  "in  greater  ratio  (45.60  per  cent)  than  the  number  of  sail  vessels 
25.97  per  cent)  while  the  carrying  power  of  steam  vessels  incteased  in  a  much  less 


SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MERCHANT  MxVEINE.         65 

ratio  (10.08  per  cent)  than  did  the  number  of  steam  vessels  (22.71  per  cent),  showing 
that  much  larger  sail  vessels  and  smaller  steam  vessels  were  impressed  in  service  the 
second  year. 

Table  I  of  Appendix  A  shows  the  subdiA'ision  of  vessels  according  to  nationality. 
It  appears  that,  of  the  total  carrying  power  of  all  vessels  engaged  in  American  foreign 
commerce  for  the  two-year  periods  under  review,  the  percentage  under  American 
registry  was  but  7.fi3  the  first  year,  while  for  the  second  year  it  was  11.99.  Confined 
to  steam  vessels  only,  these  percentages  were  5.75  and  9.72  respectively,  while  for 
sail  vessels  the  corresponding  percentages  were  36.76  and  38.64.  Thus,  more  than 
one-third  of  all  sail  vessels  in  service  during  both  years  were  under  American 
registry. 

With  respect  to  vessels  under  foreign  registry,  more  than  one-half  of  the  total  carry- 
ing capacity  for  both  years  was  under  British  registry,  and  although  the  number  and 
carrying  capacity  increaeed  during  the  second  year,  the  proportionately  greater 
increase  in  vessels  of  other  nations  reduced  the  relative  importance  of  British  vessels 
engaged  in  American  commerce  from  57.88  per  cent  the  first  year  to  54.13  per  cent 
the  second  year. 

Considering  now  the  tonnage  engaged  in  American  commerce  under  British  registry 
in  connection  with  the  total  tonnage  contributed  by  all  belligerent  nations,  reference 
to  this  table  will  show  that,  while  the  percentage  of  tonnage  under  British  registry 
did  not  materially  decrease  during  the  second  year,  the  total  percentage  of  vessel 
tqnnage  contributed  by  all  belligerent  nations  dropped  from  80.59  per  cent  the  first 
year  to  66.04  per  cent  the  second  year. 

The  following  summary  will  show  the  actual  increase  in  carrying  power  of  vessels 
flying  flags  of  nations  contributing  100,000  tons  or  more  to  the  foreign  shipping  of  the 
United  States  during  either  year: 


Nationality  of 
vessels. 

1914 

1915 

Increase. 

Nationality  of 
vessels. 

1914 

1915 

Increase. 

Greek 

Net  tons. 
22, 207 
33,058 
184,455 
121,6  2 
446, 303 
636,288 
252,888 

Net  Ions. 
186, 556 
170,888 
395,458 
268,024 
790,273 

1,121,843 
442,996 

Per  cent. 

740 

417 

114 

120 

78  , 

76 

75 

French 

Net  tons. 
200,815 
100, 301 

Net  tons. 
337,419 
146,629 
178,087 

5,064,575 
(') 

Per  cent. 
68 

Swedish 

46 

Dutch 

Danish 

Norwesiian 

American 

Japanese 

British 

Ger:ran 

Austrian 

126,683 
4,825,051 
1,051,701 

148,877 

41 

a 

2  100 

2  100 

Italian 

1  There  were  193,575  tons  enterini?  and  50,505  tons  clearing  United  States  ports  immediately  after  July  31, 
1914,  of  German  registry,  as  shown  in  TaMe  3  of  Appendix  B.  Since,  however,  only  a  few  of  the  vessels 
clearin;;  co  npleted  their  voyages,  the  entire  tonnage  of  German  vessels  is  omitted  as  an  inconsequential 
factor  in  the  American  trades. 

2  Decrease. 

The  extent  to  which  removals  and  substitutions  of  vessels  took  place  during  the 
two  periods  under  review  is  shown  as  follows: 


Vessels  in  service. 

1914 

1915 

Number. 

Net  tons. 

Number. 

Net  tons, 

Prior  to  Aug.  1, 1914,  onlv 

1,074 

2,756,866 

Su^>sequent  to  July  31, 1914,  only 

1,848 
2,249 

3, 776,  OH 

Prior  to  and  later  than  Aug.  1, 1914 

2,249  1    5,578,784 

5, 578, 784 

Total 

3  323      s  s.^";  fi.=in 

4,097 

9,354,795 

It  will  be  seen  that  1,074  vessels  engaged  in  American  commerce  the  first  year  were 
withdrawn  therefrom  the  second  year.  Of  these,  368  were  withdrawn  on  account 
of  war  expedients  and  706  for  other  reasons,  such  as  transference  to  other  trades, 
wrecks,  collisions,  fires,  and  obsolescence.  To  replace  these  1,074  vessels  and  such 
others  as  were  in  service  for  short  periods  during  1915  and  thereafter  withdrawn, 
there  were  placed  in  service  during  the  second  year  1,848  vessels. 

Table  II  of  Appendix  A  shows  in  detail  the  number  and  net  registry  tonnage  of 
vessels  thus  placed  in  foreign  trade  of  the  United  States  from  the  following  sources: 


66         SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

(1)  New  eonstruclion  of  American  and  foreign  vessels;  (2)  diverted  from  coastwise 
and  other  trades;  and  (3)  admitted  to  American  registry. 

Of  newly  constructed  vessels,  aggregating  169  of  480,106  net  registry  tons,  but  8  of 
30,342  tons  net  registry  were  built  for  American  owners;  the  remainder,  161,  of  449,764 
tons  net  registry  were  built  for  foreign  owners. 

Other  additions  to  American  foreign  commerce  during  the  second  year  under  con- 
sideration were  contributed  by  the  transference  of  enrolled  vessels  in  coastwise 
trades  through  the  exchange  of  registries  for  enrollments.  One  hundred  and  eighty- 
five  vessels,  both  sail  and  steam,  aggregating  222,862  tons  net  registry,  were  trans- 
ferred in  this  manner.  Some  of  these  vessels,  however,  remained  in  foreign  serAice 
for  but  short  periods,  when  they  were  again  reentered  in  the  coastwise  trades.  The 
number  here  stated  includes  several  very  old  vessels,  built  in  the  eighties  or  seventies, 
or  even  earlier. 

But  14  foreign  vessels,  aggregating  21,806  net  tons  registry,  were  added  to  United 
States  trades  after  admission  to  American  registry  under  the  ship  registry  act  of  August 
18, 1914.  While  150  foreign  vessels,  of  341 ,905  net  tons  registry,  were  admitted  to  Amer- 
ican registry  under  this  act  during  the  second  12  months'  period  under  review,  the 
record  shows  that  118  of  these,  aggregating  286.307  tons  net  registry,  were  already  en- 
gaged in  American  commerce  prior  to  change  of  registry,  and  18  did  not  engage  in  the 
American  commerce  under  review  after  change  to  American  registry.  Instances  of 
these  latter  are  the  steamship  Evangeline,  wliich  continued  in  Canadian  trade,  the 
steamers  Foxton  Hall  and  Sacramento  which  sank  after  obtaining  American  registry, 
the  steamer  Gargoyle,  which  was  seized,  and  the  Glenpoole,  which  was  laid  up,  all 
before  engaging  in  American  commerce  after  receiving  American  registry. 

Tabulation  of  the  132  vessels  admitted  to  American  registry,  just  referred  to,  dis- 
tributed with  respect  to  their  former  registries,  is  shown  in  Table  III  of  Appendix  A. 
This  number  includes  vessels  such  as  the  steamship  Connnunipaw ,  admitted  on  July 
8,  1915,  the  bark  Paolina,  admitted  on  July  26,  1915,  and  others  which,  although 
admitted  prior  to  August  1,  1915,  were  under  American  registry  too  short  a  period  to 
figure  materially  in  our  foreign  trade  as  American  vessels. 

Table  IV  of  Appendix  A  shows  in  detail  the  abnormal  withdrawals  of  vessels  from 
commerce  of  the  United  States,  due  to  war  expedients. 

Comparing  now  the  character  of  all  vessels  engaged  in  American  commerce  for  the 
two  periods  under  review,  in  the  light  of  the  foregoing  analysis,  a  study  of  all  Tables 
in  Appendix  A  will  show  that  the  mthdrawal  and  replacement  of  foreign  vessels  re- 
sulted (1)  in  a  greater  diffusion  of  nationalities  and  (2)  in  the  substitution  of  an  inferior 
merchant  marine  of  greatly  decreased  working  efficiency. 

VESSEL-TON    EFFICIENCY. 

The  number,  character,  carrying  capacity,  and  nationality  of  vessels  engaged  in 
American  commerce  having  been  shown,  the  service  rendered  in  vessel-ton  efficiency 
is  important  in  considering  the  extent  to  which  American  foreign  commerce  was 
affected  by  withdrawals  and  decreased  number  of  voyages. 

During  the  first  12  months  preceding  beginning  of  the  war  there  were  11,700  voy- 
ages from  and  to  foreign  ports,  by  3,323  vessels.  The  vessel-ton  efficiency  performed 
on  both  incoming  and  outgoing  trips  by  593  sail  vessels  aggregated  531,326  ship-tons 
on  the  incoming  and  468,117  ship-tons  on  the  outgoing  trips.  By  2,730  steam  vessels 
there  were  31,715,814  ship-tons  on  the  incoming  and  31,187,577  ship-tons  on  the 
outgoing  trips,  making  a  total  of  32.247,140  sliip-tons  incoming  and  31,655,694  ship- 
tons  outgoing  of  100  cubic  feet  each  for  the  period. 

During  the  second  12  months  immediately  following  commencement  of  the  war 
there  were  but  11,560  voyages  from  and  to  foreign  ports  by  4,097  vessels.  The  vessel- 
ton  efficiency  performed  on  both  incoming  and  outgoing  trips  by  747  sail  vessels 
aggregated  652,201  ship-tons  on  the  incoming  and  721,314  ship-tons  on  the  outgoing 
trips.  By  3,350  steam  vessels  there  were  26,931,956  ship-tons  on  the  incoming  and 
26,740,456  ship-tons  on  the  outgoing  trips,  making  a  total  of  27,584,157  ship-tons 
incoming  and  27,461,770  ship-tons  outgoing  of  100  cubic  feet  each  for  tliis  period. 

Stated  in  per  cents,  the  decrease  in  vessel-ton  efficiency  the  second  year  was  13.2 
for  vessels  entering  and  14.5  for  vessels  clearing.  This,  notwithstanding  the  fact  that 
there  was  an  increase  that  year  of  12.23  per  cent  in  the  carrying  power  of  all  vessels. 
This  decrease  was  attributable  to  four  distinct  causes,  (1)  to  longer  periods  of  time 
consumed  at  loading  and  discharging  ports,  (2)  to  more  sail  vessels  and  slower  steam 
vessels,  (3)_  to  longer  ocean  routes  traversed  to  escape  war  zone,  and  (4)  to  detention 
from  exercise  of  the  "right  of  search"  by  belligerents. 

The  following  summary  will  show  the  United  States  territorial  spheres  in  which 
the  vessel-ton  efficiency,  first  shown,  operated,  both  as  to  arrivals  and  departures  and 
the  per  cent  of  increase  or  decrease  thereof: 


SHIPPIXG  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         67 


1914 

1915 

Increase  or  decrease. 

Net  ton- 
nage. 

Net  ton- 
nage. 

Net  ton- 
nage. 

Per 
cent. 

North  Atlantic: 

Entries 

Clearances 

19,865,362 
18,589,741 

3,529,530 
4,290,969 

6,685,507 
6,624,949 

2,166,741 
2,150,035 

14,755,906 
13,878,317 

4,803,998 

5,587,787 

6,219,497 
6,197,515 

1,804,756 
1, 798, 151 

5, 109, 456 
4,711,4^4 

1,274,468 
1,296,818 

466,010 
4£7,434 

361,985 
351,884 

S5.7 
25.3 

South  Atlantic: 

Entries 

36.1 

Clearances 

Gulf: 

Entries 

Clearances 

Pacific: 

Entries 

Clearances 

30.2 

7.0 
6.4 

16.7 
16.4 

Italic  denotes  decrease. 

This  summary,  as  indicated  by  the  per  cents,  shows  that  the  most  marked  decreases 
in  vessel-ton  efficiency  were  at  North  Atlantic  ports,  next  at  Pacific  coast  ports,  and 
least  at  Mexican  Gulf  ports.  Reference  to  Table  I  of  Appendix  A  will  show  that  of 
all  ports  the  greatest  reductions  were  at  Boston,  New  York,  and  Philadelphia,  which  to 
some  extent  were  offset  by  increases  in  vessel-ton  efficiency  at  the  South  Atlantic 
ports  of  Baltimore,  Newport  News,  and  Norfolk,  and  at  some  ports  on  the  Mexican 
Gulf. 

Table  II  of  Appendix  B  shows  that  during  the  first  year  the  ton-efficiency  of  vessels 
under  American  registry  was  but  10  per  cent  of  the  total  ton  efficiency  of  all  vessels, 
i.  e.,  3,218,568  of  32,247,140  tons  for  entries  and  3,057,488  of  31,655,094  tons  for  clear- 
ances, while  during  the  second  year  it  increased  to  16  per  cent  of  a  much  less  total  ton 
efficiency  of  all  vessels,  i.  e.,  4,390,909  of  27,584,157  tons  for  entries  and  4,527,543  of 
27,461,770  tons  for  clearances. 

The  increase  in  American  vessel-ton  efficiency,  i.  e.,  1,172,341  tons  for  entries  and 
1,470,055  tons  for  clearances  was  employed  the  second  year  to  some  extent  in  our 
trades  with  Germany,  Portugal,  Russia,  and  the  Scandinavian  countries,  but  to  a 
greater  extent  in  our  Central  and  South  American  trades.  The  increase  here  shown  in 
American  tonnage  was  insufficient,  however,  to  make  up  the  great  retrenchment  in 
vessel-ton  efficiency  of  British  and  German  vessels.  While  such  retrenchment  was 
made  up  in  part  by  increased  efficiency  of  other  vessels,  there  still  remained  the  deple- 
tion shown  in  our  total  foreign  mercantile  movement.  Stated  in  detail,  with  respect 
to  continental  groups,  the  decreases  were  as  follows: 


West  Indies  and  the  Bermudas: 

Entries I  5, 100, 631 

Clearances I  4, 730, 985 

Central  A  merican  States:  i 

Entries \  4, 135, 471 

Clearances I  3, 853, 207 


SOUTH  AMERICA. 

Argentina: 

Entries 

Clearances 

Brazil: 

Entries 

Clearances 

Chile: 

E  ntries 

Clearances 

Colombia: 

Entries 

Clearances 

Other  South  America: 

Entries 

Clearances 


608, 843 
465,952 

879,695 
517,861 

405, 188 
374, 678 


65,713 

495,991 
388,793 


3,168,171 
2,901,709 


421,840 
410, 562 

514, 555 
624,671 

397. 730 
268,551 

99,589 
48,422 

355, 237 
374,339 


187, 003 
65,390 

366, 140 
106, 810 

7,468 
106,  m 

9,701 

17, m 

140,754 
14,454 


30.7 
11.9 

41.6 
20.6 

1.8 

S8.S 

10.8 
S6.S 

S8.4 
3.7 


68         SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


SOUTH  AMERICA— continued. 
Europe: 

Kntries 

Clearances 

Asia: 

Entries ?.. 

Clearances 

Oceania: 

Entries 

Clearances 

Africa: 

Entries 

Clearances 


1914 


Net 
tonnage. 


18, 349, 242 
18,993,148 

1,296,266 
1,262,319 

406,175 
551, 215 

479, 750 
451, 823 


1915 


Net 
tonnage. 


,583,024 
,  890, 470 

,  210, 303 
,151,865 

427, 721 
552, 219 

660,889 
418,460 


Increase  or  decrease. 


Net 


1, 766,318 
e,  102, 678 

85, 963 
110,454 

21,546 
1,004 

181, 139 


Per 

cent. 


9.6 
11.1 


5.3 
.2 


37.8 
7.4 


Italic  denotes  decrease. 

Table  ITT  of  Appendix  B  sliows  tliat  a  greater  proportion  of  ship  tons  entered  and 
cleared  by  sail  vessels  during  the  second  year  than  during  the  first  year.  The  increase 
in  sail-vessel  units,  i.  e.,  from  593  the  first  year  to  747  the  second  year,  indicates  the 
ext.reinity  to  which  American  commerce  exerted  itself  the  second  year  to  secure  bot- 
toms for  its  over-seas  transportation. 

As  already  shown,  with  774  more  vessels,  sail  and  steam,  in  serv^ice  the  second  year 
the  total  thereof,  i.  e.,  4.097,  contributed  4,662.983  less  vessel  tons  entered  and 
4,193,924  less  vessel  tons  cleared  than  did  3,323  vessels  the  year  before. 

CURRENTS   OF  TRADE. 

(Ocean  routes.) 

Reference  to  Table  IV  in  Appendix  B  will  show  that  during  the  first  year  embraced 
in  this  report  there  were  433  established  currents  of  trade  from  and  to  foreign  countries 
and  the  28  ports  in  the  United  States  herein  considered.  During  the  second  year  75 
of  these  routes  were  abandoned  and  70  were  added,  so  that  but  428  were  in  operation 
that  year.  While  the  dislocation  of  these  currents  of  trade  are  shown  in  the  above 
table  in  connection  with  other  features,  for  convenience  they  are  here  stated  in 
detail: 


Eliminated. 

Added. 

Countries. 

Num- 
ber of 
routes. 

Ports. 

Num- 
ber of 
routes. 

Ports. 

EUROPE. 

Austria-Hungary 

Belgium  

5 
12 

Portland,  Me.:  Boston,  Mass.; 
Newport  News,  Va.;  Nor- 
folk, Va.;  Galveston,  Tex. 

Newport  News,  Va.;  Charles- 
ton, S.  C;  Savannah,  Ga.; 
Fernandina,  Fla.;  Jackson- 
ville,   Fla.;    Tampa,    Fla.; 
Pensacola,     Fla.;     Mobile, 
.\la.;    Port    Arthur,    Tex.; 
Sabine,  Tex.;  Astoria,  Oreg.; 
Portland,  Oreg. 

None 

5 

3 
2 

None. 

Denmark 

France 

3 
11 

Tampa,   Fla.;   Sabine,   Tex.; 
Tacoma,  Wash. 

Charleston,  S.  C;  Fernandina, 
Fla.;      Jacksonville,      Fla.; 
Tampa,  Fla.;  Mobile,  Ala.; 
Sabine,    Tex.;   San   Pedro, 
Cal.;   Astoria,  Ore?.;   Port- 
land, Ores.;  Port  Townsend, 
Wash.:  Tacoma,  Wash. 

C:  Mobile,  Ala.:  San  Pedro, 
Cal.;  Tacoma,  Wash. 
Key  West    Fla  •  San  Pedro 

Germanv 

Cal.;  Astoria,  Oreg. 
Portland,  Me.;  San  Diego,  Cal 

SHIPPING  BOAKD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         69 


Countries. 


Eliminated. 


Num- 
ber of 
routes. 


Ports. 


Added. 


Num- 
ber of 
routes. 


Ports. 


Greece. 


Italy 

Netherlands. 


Norway.. 
Portugal . 
Russia... 


Spain... 
Sweden. 


United  Kingdom. 
Other  Europe 


NORTH  AMERICA. 

Central  American  States 
Mexico 


West  Indies 

Other  North  America. 


SOUTH  AMERICA. 

.\rgentine 


Brazil. 
Chile.. 


Colombia 

Other  South  America. . 

ASIA. 

Asia 

OCEANIA. 

Oceania 


AFKICA. 


Africa. 


Total. 


None. 


None 

Port  Townsend,  Wash . 


Jacksonville,  Fla;  Tampa,  Fla, 


Portland,  Me.;  Boston,  Mass.; 

Tampa,  Fla.;  Mobile,  Ala.; 

Sabine,  Tex. 
Boston,  Mass.;  Norfolk,  Va.; 

Savannah,  Ga.;  Galveston, 

Te.x. 
None 


Fernandina,  Fla.;  Key  West, 
Fla.;  Tampa,  Fla.;  Pensa- 
cola,  Fla.;  Sabine,  Tex. 

Fernandina,  Fla.;  Port  Aran- 
sas, Tex. 
Tampa,  Fla 


Port  Arthur,  Tex.;  Port  Aran- 
sas, Tex. 

Portland,     Me.;      Pensacola, 
Fla.;  Portland,  Oreg. 

Portland,  Oreg 

None 


Portland,  Me;  Savannah,  Ga.; 
Fernandina,  Fla.;  Jackson- 
ville, Fla.;  Tampa,  Fla.; 
Astoria,  Oreg.;  Seattle, 
Wash. 

Portland,  Me.;  Charleston, 
S.C;  Tampa,  Fla.;  Astoria, 
Oreg. 

Jacksonville,  Fla 


Charleston,  S.  C . 
Tacoma,  Wash . 


Tampa,  Fla.;  San  Diego,  Cal.. 


Port  Arthur,  Tex.;    Sabine, 
Tex. 


75 


Philadelphia,  Pa.;  Baltimore, 
Md.;  Newport  News,  Va.; 
Norfolk,  V'a.:  Savannah,  Ga.; 
New  Orleans,  La. 

Portland,  Ores;. 

Jacksonville,  Fla. 

Norfolk,  Va.:  Savannah,  Ga.; 

Mobile,  Ala.;  San  Francisco, 

Cal. 
Port  Arthur,  Tex.;  Galveston, 

Tex. 

Tacoma,  Wash. 


Portland,  Me.;  Port  Arthur, 
Tex. 

Charleston,  S.  C;  Savannah, 
Ga.;  Mobile,  Ala.;  I'ort  Ar- 
thur, Tex.:  Galveston,  Tex.; 
San  Francisco,  Cal. 

Key  West,  Fla. 

Portland,  Me.;  Baltimore,  Md.; 
Savannah,  Ga.;  Key  West, 
Fla.;  New  Orleans,  La.;  Sa- 
bine, Tex.;  Astoria,  Oreg. 


Savaruiah,  Ga.;  Sahioe,  Tex.; 
San  Diego,  Cal.;  Seattle, 
Wash.;  Tacoma,  Wash. 

None. 

A.storia,  Oreg.;  Tacoma,  Wash. 
Baltimore,  Md.;   Jacksonville, 
Fla.;  New  Orleans,  La. 


Tacoma,  Wash. 


San  Pedro,  Cal. 


Portland,  Me.;  Newport  News, 
Va.;  Galveston,  Tex.;  Ta- 
coma, Wash. 

Newport  News,  Va.;  Norfolk, 
Va.;  Port  Arthur,  Tex. 

San  Pedro,  Cal.;  Seattle,  Wash 


Newport  News,  Va.;  New 
Orleans,  La.;  Sabine,  Tex. 

Portland,  Me.;  Mobile,  Ala.; 
Galveston,  Tex.;  Sau  Diego, 
Cal. 


Key  West,  Fla. 


The  resultant  effect  upon  our  commerce  of  these  changes  in  ocean  trade  currents 
can  only  be  fully  determined,  however,  when  considering  in  connection  therewith 
the  still  further  factor  of  vessel-ton  efficiency  in  the  respective  ocean  routes  them- 
eelves.  By  some  sailings  were  greatly  increased,  while  by  others  they  were  materially 
reduced.     For  example,  from  Baltimore,  during  the  first  year,  there  were  718  depar- 


70         SHIPriXG  BOARD,  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE. 

tures  to  foreign  countries,  while  during  the  sec-ond  year  there  were  1,005.  From 
Boston,  during  the  first  year,  there  were  446  departures,  while  during  the  second 
year  there  were  but  319.  The  total  number  of  voyages  for  the  two  periods,  however, 
varied  but  140 — i.  e.,  from  11,700  for  the  first  year  to  11,560  for  the  second  year — so 
the  only  test  for  determining  the  effect  upon  commerce  is  that  of  vessel-ton  efficiency, 
the  result  of  which  has  already  been  stated . 

IMPORTS   AND   EXPORTS. 

WTiile  the  number  of  vessel-tons  entered  and  cleared  must  necessarily  be  the  maxim* 
measures  of  cargo  imports  and  exports,  they  are  not  dependable  indices  of  the  actual 
amounts  in  weights  or  other  measures  of  cargo  received  or  shipped ,_  as  vessels  arrive 
and  sail  with  empty  space.  It  is  therefore  possible  to  only  approximate  the  volume 
of  cargo  moved  from  vessel-ton  entries  and  clearances. 

Furthermore,  Government  statistics  of  total  imports  and  exports  are  expressed  in 
monev  values,  without  stating  the  weight  or  number  of  packages  (except  in  the  case 
of  certain  commodities).  Because  of  this  and  the  almost  impossible  task  of  correctly 
computing  the  volume  of  trafF.c  (when  carried  at  ocean  rates  based  upon  vessel  space 
occupied), where  no  weight  is  stated,  it  has  been  impracticable  to  do  other  than  adopt 
the  practice  just  alluded  to,  followed  by  the  Department  of  Commerce,  of  making 
comparisons  in  cash  values. 

AVhile,  therefore,  such  comparisons  have  been  made  as  are  possible  by  this  method, 
and  are  shown  in  Table  I  of  Appendix  C,  it  is  proper  to  state  that,  as  the  prices  of 
staple  imports  and  exports  vary  from  week  to  week,  the  results  therein  shown,  while 
indicating  increases  or  decreases  in  money  values,  do  not  necessarily  reflect  increases 
or  decreases  in  cargo  volume  movement.  •         .       .         . 

Thi3  is  particularly  true  for  the  two-year  periods  under  review  in  this  report.  For 
example,  the  price  of  wheat  increased  from  91  cents  per  bushel  in  July.  1914.  to  $1.60 
per  bushel  in  January,  1915,  while  the  price  of  cotton  decreased  from  12.5  cents  per 
pound  to  7.7  cents  per  pound  for  same  months.  Nor  are  these  differences  altogether 
accounted  for  by  ocean  freight-rate  advances  actually  taking  place.  It  will  be  seen 
that  the  price  of  wheat  went  up,  while  the  price  of  cotton  went  down,  although  ocean 
freight  costs  increased  in  both  instances.  A  still  further  anomaly  is  that,  vdth  a  mate- 
rial curtailment  in  vessel-ton  clearances,  the  exports  actually  made,  expressed  in  cash 
values,  increased  over  28  per  cent  the  second  year  as  compared  with  the  first  year. 

However,  reference  to  Table  I  of  Appendix  C  will  show  that  imports  decreased 
in  value  $251,621,292,  or  about  14.4  per  cent,  which  is  only  slightly  higher  than  the 
percentage  of  decrease  in  vessel-tons  entering,  i.  e.,  from  32,247,140  to  27,584,157 
ship-tons. 

As  an  aid,  therefore,  in  deducing  the  relation  of  cargo  movement  to  A-essel  move- 
ment. Table  I  of  Appendix  ('  has  been  prepared. 

OCEAN    FREIGHT   RATE   ADVANCES. 

Since  August  1, 1914,  many  letters  have  been  received  from  exporters  and  importers 
throughout  the  country-  by  the  Departments  of  Tommerce,  State,  Treasury,  and  the 
Interstate  Commerce  Commission,  protesting  against  onerous  ocean  freight  rate 
advances.  These  protests  are  supported  by  daily  published  rate  quotations  author- 
ized by  steamship  agents,  which  show  that  an  advance  in  ocean  freight  costs  has 
prevailed  during  the  second  12  months  under  review. 

It  is  estimated  that  seven-ninths  of  American  foreign  commerce  is  carried  under 
vessel  charter  rates;  that  is,  a  rate  based  on  some  fixed  unit  for  use  of  the  entire  ves- 
sel. Such  commodities  as  oil,  coal,  phosphate,  lumber,  and  grain  shipped  in  bulk 
and  bale  cotton  represent  this  class  of  ocean  fixtures.  These  rates  fluctuate  with 
great  frequency  through  the  influence  of  many  factors,  such  as  the  dead  weight  and 
measurement  of  carrying  capacity,  of  the  vessel  offered,  whether  sail  or  steam,  the 
insurance  rating,  whether  for  liner  or  tramp  and  whether  a  return  cargo  is  obtainable 
at  port  of  discharge. 

Considering,  in  a  general  way.  full  cargo  charters  before  and  after  outbreak  of  the 
war,  the  weekly  reviews  published  in  Shipping  Illustrated  point  to  liberal  offerings 
of  vessels  at  fairly  steady  rates  up  to  the  beginning  of  August,  1914.  By  the  middle 
of  August  a  large  number  of  steamers  were  chartered  for  coal  to  South  America  at 
prices  of  100  per  cent  over  those  asked  prior  to  August  1. 

Other  rate  advances  of  30  per  cent  on  coal  and  grain  cargoes  were  made  to  the  West 
Indies  and  quantities  of  other  goods  ready  for  shipment  to  these  markets  were  held 
in  warehouses  in  consequence.  At  the  beginning  of  December,  however,  rates  de- 
clined matfirially,  due  to  an  increase  in  the  number  of  vessels  available  and  the  firm 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         71 

establishment  of  war-risk  insurance.  While  for  a  time,  charter  rates  declined  to 
nearly  the  same  levels  prevailing  before  the  war,  further  advances  were  made  in 
October,  1914.  Rates  continued  to  increase  during  November  and  December.  By 
the  middle  of  January,  1915,  rates  had  reached  a  greater  level  than  at  any  other  time 
in  history.  Not  imtil  June  were  there  indications  of  a  break  in  charter  rates,  as  the 
demand  for  boats  fell  off  considerably,  but  by  the  end  of  July,  1915,  owners  of  vessels 
were  holding  off  in  anticipation  of  still  higher  rates  which  soon  became  effective. 

Table  I,  Appendix  D,  shows  the  rates  of  specific  charters  and  are  considered  repre- 
sentative for  the  months  indicated.  Where  no  rate  is  shown  for  any  particular  month 
it  indicates  either  that  no  charters  were  reported  or  that  charters  were  negotiated  at 
private  terms  and  not  published. 

Berth  rates  are  the  charges  made  by  regular  steamship  lines  for  specific  shipments 
of  various  commodities  and  are  usually  m_ade  from  week  to  week,  according  to  the 
supply  and  demand  of  cargo  and  its  relation  to  the  supply  and  demand  of  vessel  space. 

Table  II  of  Appendix  D  shows  the  increases  in  berth  rates  from  month  to  month 
for  the  vears  ended  July  31,  1914,  and  July  31,  1915. 

Such  factors  as  increase  in  tlip  cost  of  fuel  and  ship  stores,  extra  stevedores  expenses 
for  tiering  cargo  before  its  final  handling  and  for  unloading  and  loa<ling  vessels  at 
night,  resulting  from  congested  terminals,  and  increases  in  vessel  insurance,  are  ele- 
ments of  expense  that  must  be  ascertained  before  the  propriety  of  the  charter  and 
berth  rates  cliarged  may  be  determined. 

Foreign  vessel  owners  in  the  North  Atlantic-European  trades  were  able  to  and  did 
make  up  m^any  times  in  freight  rates  their  revenue  losses  from  the  falling  off  of  pas- 
senger traffic,  wliich  normally  represents  the  preponderance  of  revenue  of  the  four 
groups  of  foreign  steamship  lines  dominating  these  trades.  The  statement  of  Ileceiver 
Franklin  of  the  International  Mercantile  Marine  Oo.  to  Chairman  Bannard  of  the 
bondhold-^rs  committee  (representing  the  4h  per  cent  mortgage  and  collateral  trust 
bonds)  of  that  company,  March  9,  1915,  is  as  follows: 

"Since  October  1.  1914,  howevtr,  owing  to  the  abnormal  conditions  of  the  freight 
market  brought  about  by  the  war  in  Europe  and  owing  also  to  the  fact  that  a  number 
of  the  company's  steamers  have  been  chartered  by  the  British  Government,  the 
earnings  have  substantially  increased,  with  the  result  that  although  the  passenger 
business  which  in  normal  times  is  a  most  important  earning  factor  of  the  company's 
business  has  been  practically  at  a  standstill,  the  earnings  of  the  company  from  freight 
and  charters  were  so  large  that  at  the  end  of  the  year  the  total  earnings  were  not  only 
sufficient  to  pay  the  interests  wMch  had  accrued  upon  all  its  outstanding  bonds  but 
indicated  a  surplus  of  between  two  and  three  million  dollars  in  excess  of  that  amount, 
without,  howeA  er,  makine  any  allowance  for  depreciation." 

Und'^r  normal  conditions  the  influence  of  vess^^l-ton  retrenchment  would  be  strong- 
est in  those  routes  or  currents  of  trade  wh'^rein  vcssd  curtailment  was  most  pro- 
nounced, both  as  to  vessel  units  and  vcssd-tons,  as  the  two  factors — (1)  reduced 
vess  '1  space  and  (2)  incr'^ascd  cargo  demand  for  space — are  controlling  in  the  rise 
or  fall  of  ocean  transportation  rates;  but,  as  already  pointed  out  in  this  report,  the 
greatest  reduction  in  v<  ss  1-ton  efficiency  during  the  S'^cond  12-month  period  occurred 
at  the  North  Atlantic  ports  of  Boston,  New  York,  and  Philadelphia,  and  coincident 
therewith  there  was  an  almost  corresponding  increas"^  in  ves3<^hton  efiiciency  at  the 
South  Atlantic  ports  of  Baltimore,  Newport  News,  Norfolk,  New  Orleans,  Port  Arthur, 
and  Galveston.  Yet  the  increase  in  ocean-freight  costs  was  even  greater  at  the  south- 
ern than  at  the  northern  ports. 

The  North  Atlantic-European  trades  the  fijst  year  were  served  by  liners  of  the  largest 
and  most  modern  types  engaged  in  regular  pass^ngrr  trades  for  both  saloon  and  emi- 
grant patrons.  These  vess  Is,  for  the  most  part  registered  under  flags  of  th?  warring 
nations,  wer.^  the  first  to  be  permanently  withdrawn  from  commercial  usage,  while 
the  South  Atlantic-European  trades  of  the  United  Stati  s  were  for  the  most  part 
served  by  tramp  vess'ls  of  Norwegian,  Dutch,  and  Danish  registrj^  and  vess-la 
under  th'^se  flags  Avere  only  stopped  from  trading  temporarily  at  the  outs^^t  of  hostili- 
ties until  fairly  understandable  conditions  were  ascertained.  The  dimunition  of 
vess-'l  tonnage  in  the  North  Atlantic  trades  did  not  therefore  affect  the  volume  of 
freight  space  to  the  same  extent  that  it  affected  passenger  traffic. 

While  the  loss  of  pass^mger  revenue  under  conditions  where  combination  freight 
and  pass-^nger  steamers  must  continue  to  operate  is  a  material  factor  and  would  tend 
to  increase  freight  rates,  yet  in  the  trades  under  review  the  passenger  vessels  were 
chartered  to  belligerent  governments  for  admiralty  uses  and  their  places  w^ere  taken 
by  smaller  and  cheap'^r  freight  steamers,  so  the  necessity  for  recoiiping  passenger 
revenue  by  advancing  freight  rates  was  nonexistant. 


v; 


^HIPPING  BOARD,  NAVAL  AUXILIAEY,  AND  MERCHA^^T  MARINE. 


The  following  summary  Avill  show  the  falling  off  in  pass-nger  traffic  to  and  from  the 
Unitod  States,  the  details  of  which,  prepared  by  the  Bureau  of  Immigration,  are 
stated  in  Table  I  of  Appendix  F. 


Arrivals,  all  classes 

Departures,  all  classes. 


Year 
ending 
July  31, 

1914. 


1,638,549 
1,019,624 


Year 
ending 
July  31, 

1915. 


639,333 
502, 210 


Decrease 
for  year. 


999,216 
517,414 


Per  cent 
decrease. 


A  further  factor  to  be  considered  in  connection  with  the  advance  in  ocean  freight 
rates  is  that  the  dislocation  of  trade  currents,  previously  shown,  created  dispropor- 
tionate demands  for  vessel  space  in  some  routes  that  reacted  upon  other  routes,  which 
enables  vessel  owners  to  advance  ocean  freight  prices  to  levels  out  of  all  proportion  to 
prevalent  conditions  justifying  the  same.  The  extent  to  which  this  has  been  done  is 
very  fully  shown  in  the  joint  report  made  to  Congress  by  the  Secretaries  of  the  Treas- 
ury and  of  Commerce  (Senate  Document  673,  Parts  1  and  2). 

The  greatest  falling  off  in  vessel-ton  efficiency,  both  incoming  and  outgoing,  during 
the  second  year,  occurred  in  our  trades  with  the  Latin-American  republics,  i.  e.,  25 
per  cent  incoming  and  18  per  cent  outgoing.  The  decrease,  for  the  corresponding 
period,  in  vessel-ton  efficiency  from  and  to  Europe,  was  but  9.6  per  cent  incoming 
and  11.1  per  cent  outgoing;  yet  reference  to  Tables  I  and  II  of  Appendix  D  will  show 
that  much  greater  freight  advances  took  place  in  the  European  trade  groups  than  in 
those  with  the  Latin-American  republics. 


MARINE   INSURANCE. 

Subdivided,  this  subject  embraces  two  distinct  forms  of  marine  insurance  (1)  Sea 
risks,  which  cover  perils  of  the  sea  and  include  particular  average  (act  of  God)  and 
general  average  (voluntary  sacrifice,  the  act  of  man):  and  (2)  war  risks. 

Sea -risk  policies  do  not  cover  losses  at  sea  resulting  from  the  belligerent  acts  of 
warring  nations;  but  wdth  aids  to  navigation  destroyed  or  removed  in  war-zone  waters 
the  hazard  under  sea-risk  policies  becomes  correspondingly  greater  and  justifies  a 
somewhat  higher  prem.iura. 

A  perusal  of  weekly  insurance  notes  appearing  in  "Shipping  Illustrated"  for  the 
two-year  periods  herein  considered,  indicates  that  on  vessels  and  cargoes  traversing 
war-zone  waters  slight  increases  in  sea-risk  premiums  were  made  after  commencement 
of  the  war.  These  increases  were  doubtless  to  compensate  for  the  extra  hazards 
involved  in  navigating  waters  where  aids  to  navigation  had  been  either  destroyed  or 
removed. 

There  were  instances  where  materially  increased  sea-risk  premiums  were  charged, 
occasioned  by  the  impressment  in  foreign  trades,  regardless  of  war-zone  waters,  of 
vessels  unfitted  structurally  for  overseas  traffic.  Such  increased  premiums  were 
charged  on  vessels  taken  from  the  Great  Lakes  and  from  the  coastwise  trades  and  placed 
in  foreign  overseas  trades,  and  in  such  cases  the  insurance  rates  on  sea-risk  policies 
increased  from  2\  and  5  per  cent  (the  usual  rates,  according  to  the  rating,  on  vessels 
built  for  trans-ocean  voyages)  to  from  6  to  12  per  cent  on  cargoes  and  vessels  taken  from 
the  coastwise  and  Great  Lakes  trades. 

War  risk  policies  in  times  of  peace  are  often  included  in  s"a-risk  underwritings  by 
the  insTtion  of  a  war-risk  rider  in  the  st^a-risk  policy.  With  the  advent  of  war, 
however,  the  question  of  securing  vessels  for  the  delivery  of  cargoes  through  or 
within  war-zone  waters  became  acute,  partly  because  of  the  hazard,  partly  because 
many  vess'^ls  were  withdrawn  from  all  commercial  trades.  This  was  due  to  two 
caus'^s:  First,  the  requisitioning  by  belligerent  governments  of  large  numbers  of 
their  merchant  vess'^ls  for  admiralty  purposes;  and,  second,  the  actual  hazards  of  the 
voyage — capture,  soizuros  and  distentions,  mine  risks,  etc.  This  condition  was  only 
partly  relieved  by  the  inauguration  of  government  war  risk  underwritings.  While 
government  war  risk  underwritings  were  promptly  pro\'ided  by  the  United  States, 
such  underwritings  were  confined  to  vess-'ls  of  American  registry.  There  were  in- 
sufficient vrss  Is  under  American  registry  to  move  our  trade,  and,  as  a  result,  war- 
risk  rates  for  single  voyages  increas'i^d  from  1^  per  cent  to  5  per  cent,  and  in  some 
cases  considerably  more. 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         73 

An  example  of  exceptionally  high  rates  paid  on  cotton  shipments  to  Germany  waa 
reported  from  London  in  Febraury,  1915,  i.  3.,  that  70  guineas  per  cent  had  been  paid 
at  Lloyd's  to  insure  against  condemnation  in  a  prize  court  of  a  cotton  steamer  flying 
the  American  flag  and  bound  for  Germany.  The  hull  of  this  steamer  was  insured  for 
$165,000,  at  a  rate  of  al)out  20  per  cent,  w  hile  $750,000  value  of  its  cargo  was  insured 
by  the  United  States  War  Lisk  Bureau  at  3  per  cent. 

It  should  also  be  noted  that  war  insurance  rates  on  hulls  and  cargo  destined  to  special 
ports  where  danger  from  mines  and  other  caases  of  war  involved  exceptional  peril 
have  continually  fluctuated  and  at  times  been  suspended.  Thus  there  was  a  suspen- 
sion of  war-risk  insurance  on  vessels  and  cargo  to  Calcutta  when  in  September,  1914, 
the  acti\ity  of  the  German  cruiser  Emden  in  the  Bay  of  Bengal  made  shipping 
to  and  from  that  port  very  hazardous.  The  United  States  Bureau  of  War- Risk  Insur- 
ance has,  since  its  inception,  reserved  to  itself  the  right  to  decline  any  risks  to  certain 
ports,  or,  if  accepted  to  name  such  rates  as  in  its  judgment  might  seem  adequate. 
Among  such  ports  may  be  mentioned  those  in  the  LTnited  Kingdom  and  on  the  conti- 
nent of  Europe  north  of  Bordeaux  and  South  of  Christianssand.  Also  ports  on  the 
Kattegat  and  (or)  Baltic  Sea  and  (or)  adjacent  waters.  Also  ports  on  the  Adriatic 
Sea,  Black  Sea  or  Bosphorus,  and  the  port  of  Smyrna,  as  well  as  the  colonial  possessions 
of  Germany  and  Turkey. 

The  rates  quoted  from  time  to  time  bv  the  United  States  Bureau  of  War- Risk  Insur- 
ance are  shown  in  Table  I  of  Appendix  E.  This  table  does  not,  however,  include 
rates  to  the  special  ports  referred  to. 

The  insurance  rates  shown  in  Table  II  of  same  appendix  are  taken  from  the  New 
York  Journal  of  Commerce  and  indicate,  for  specific  ports,  fluctuations  in  war-risk 
insurance  premiums  as  quoted  by  insurance  companies.  These  rates  cover  general 
cargo  only  and  exclude  full  cargoes  of  flour,  grain,  coal,  rubber,  sugar,  and  copper. 
Shipments  to  Denmark,  Greece,  Netherlands,  Norway,  and  Sweden  are  subject  to 
neutrality  clauses.  For  the  purpose  of  convenience  in  locating  any  rate  they  are  ar- 
ranged in  22  groups,  as  follows: 

Groups. 

Denmark,  all  ports 1 

France : 

Channel  ports 2 

Havre  and  West  Coast 3 

Mediterranean  ports 4 

Oreece,  all  ports 5 

Italy,  ports  as  indicated 6 

Netherlands,  all  ports 7 

Norway: 

Sta\^anger  and  North 8 

South  of  Stavanger 1 

Portugal,  all  ports 3,  9 

Russia,  Archangel 10 

Spain,  all  ports 3,  6, 11 

Sweden: 

Stockholm 12 

Other  ports  not  beyond  Malmo 1 

United  Kingdom,  ports  as  indicated 13 

Central  American  States,  ports  as  indicated 14 

West  Indies,  ports  as  indicated 15 

Other  North  America,  ports  as  indicated 16 

South  America,  ports  as  indicated 17 

Asia: 

China  and  Japan 18 

India 18, 19 

Straits  Settlements 20 

Oceania,  ports  as  indicated 18, 1 1 

Africa,  ports  as  indicated 22 

The  dates  shown  are  those  on  which  rates  were  published.  WTiere  no  rate  is  shown 
for  any  particular  date  it  should  be  understood  that  the  last  preceding  rate  quoted  is 
still  in  effect. 


74         SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

SUMMARIZATION. 

Table  I  of  Appendix  A,  shows  that  for  the  first  year  but  7.63  per  cent  of  the  total 
merchant  shipping  employed  was  under  the  American  flag,  while  80.59  per  cent  was 
under  flags  of  nations  now  at  war.  Thus,  11.78  per  cent  was  contributed  by  nations 
that  year  which  to-day  are  neutral.  For  the  second  year — during  pendency  of  the  war, 
while  the  increase  in  vessels  amounted  to  774  over  the  preceding  12  months  period 
(with  a  total  carrying  power  of  1,019,145  net  tons,  equal  to  an  increase  of  12.23  per 
cent),  but  66.04  per  cent  of  the  increased  tonnage  was  contributed  by  the  nations 
engaged  in  war,  11.99  per  cent  was  contributed  by  vessels  of  American  registry,  and 
21.97  per  cent  by  those  of  neutral  countries. 

The  falling  off  of  vessels  ser\-ice  the  second  year  was  due,  in  large  measure,  to  the 
withdrawal  of  German  and  British  vessels,  which  during  the  first  year,  performed  the 
carrjdng  service  in  the  most  important  United  States  commercial  trades,  i.  e.,  from 
and  to  the  three  large.st  North  Atlantic  ports  of  Boston,  New  York,  and  Philadelphia. 
The  fact  that  with  more  vessels  of  greater  aggregate  tonnage  the  second  year,  a  materially 
lesser  se^^dce  was  performed  is  noted,  because  where  the  ownership  thereof  was  under 
beligerent  flags  the  vessel-ton  efficiency  dropped  from  80.59  per  cent  to  66.04  per 
cent.  While  some  shipo^vners  transferred  coastwise  vessels  to  foreign  trade  and  the 
United  States  Government  admitted  to  American  registry  foreign  vessels  with  a  re- 
sulting increase  in  its  merchant  marine  of  76.31  per  cent  over  the  tonnage  employed 
during  the  first  12-months  period,  yet  this  increase  only  enabled  the  United  States  to 
increase  its  y)ercentage  in  carrying  power  of  vessels  in  its  total  foreign  commerce  from 
7.63  to  11.99  per  cent. 

Respectfully  submitted. 

Adrian  H.  Boole, 

Special  Agent. 


SHIPPING  BOARD,  NAVAL  AUXILIAKV,  AND  MERCHANT  MARINE.         75 


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c:T3  tc 


76        SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Table  II. — Number  and  net  tonnage  of  sail  and  steam  vessels  in  the  foreign  service  of 
the  United  States  during  year  ended  July  SI,  1915,  and  not  in  the  service  during  year 
preceding. 

SAIL  VESSELS. 


Admitted  to 

New  construc- 
tions. 

Diverted  to  foreign  trade  from— 

Total 
se 

placed  in 

Nationality  of  ves- 
sel. 

istry. 

Coastwise  trade. 

Other  trades. 

rvice. 

Num- 
ber. 

Net 
tons. 

Num- 
ber. 

Net 
tons. 

Num- 
ber. 

Net 
tons. 

Num-       Net 
ber.       tons. 

Num- 
ber. 

Net 
tons. 

9 

11,416 

1 

97 

125 

108,992 

135 

120, 505 

Argentinian 

1          1.081 

1 

1 
1 

67 
2 

33 

21 
3 

84 
1 
4 

13 
4 
2 
1 

1,081 

1 

1 

65 

2 

33 

21 

3 

83 

1 

4 

13 

4 

2 

1 

1,996 

240 

80, 039 

2,699 

61,142 

26, 438 

271 

111,459 

1,111 

4,415 

15, 804 

1,925 

2,746 

998 

1,996 

Brazilian    

240 

British 

2 

564 

80, 603 

Danish    

2,699 

French    

61, 142 

26,438 

271 

1 

617 

112,076 

1,111 

4,415 

15, 804 



1,925 

Swedish      

2,746 

Uraguayan    

998 

Total  foreign 

3 

1,181 

235 

312,364 

238 

313,545 

Total  American 
and  foreign 

9 

11,416 

4 

1,278 

125 

108,992 

235 

312,364 

373 

434,050 

STEAM  VESSELS. 


5 

10.. ■^90 

7 

30, 245 

60 

113,870 

72 

154,505 

1 

9 
15 

481 

1 
1 
1 

2,761 

18,522 

25,462 

1,265,091 

1,653 

3,0S7 

902 

151,4^1 

196, 514 

124,302 

142, 192 

20',  451 

72,  f  80 

4,2  5 

271,102 

2,  ''73 

3,327 

57,913 

2,229 

59, 829 

130,375 

1,112 

1 
9 
15 

570 

1 

1 

1 

128 

99 

43 

i" 

25 

4 
196 

1 

2 
24 

1 
29 
89 

1 

2,761 



18,522 

25,462 

British 

89 

305, 112 

1,570.203 

1,653 

Costa  Rican 

3,087 

Cuban 

902 

Danish 

1 

i2 
11 
2 
8 
2 
3 

20.974 
24,5f'7 

4,713 
22, 157 

7,499 

116 

172, 405 

Dutch           

88 

41 

f8 

85 

22 

4 

173 

1 

2 

24 

2\ 

83 

1 

221,081 

129, 015 

Cree''                 

1*^4, 349 



20S, 050 

13,ir8 

85, 848 

4,215 

23 

32,079 

303, 181 

2, '73 

3,327 

57,913 

1 

2,229 

2 

6 

4,321 
13, 993 

64, 150 

S"  edisb      

144, 3r,8 

1,112 

Total  foreign .  . . 

158 

448,583 

1,245 

2, 738, 873 

1,403 

3,187,456 

1 

Total  American 
andforeiTU 

5 

10,390 

1C5 

478, 828 

60       113,870   1,245 

2,738,873 

1,475 

3,341,901 

SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AXD  MERCHANT  MARINE. 


77 


Table  II. — Number  and  net  tonnage  of  sail  and  steam  vessels  in  the  foreign  service  of 
the  United  States  during  year  ended  July  Si,  1915,  and  not  in  the  service  during  year 
preceding — Continued . 

TOTAL  ALL  VESSELS. 


Admitted  to 

American  reg- 

istrj'. 

New  construc- 
tions. 

Diverted  to  foreign  trade  from— 

Total 
se 

placed  in 

Nationality  of  ves- 
sel.' 

Coastwise  trade. 

Other  trades. 

rvice. 

Num- 
ber. 

Net 
tons. 

Num- 
ber. 

Net 
tons. 

Num- 
ber. 

Net 
tons. 

Num- 
ber. 

Net 
tons. 

Num- 
ber. 

Net 
tons. 

American 

14 

21,806 

8 

30,342 

185 

222,862 

207 

275,010 

Argentinian 

2 

10 

16 

546 

1 

1 

1 

118 

88 

3,842 

20, 518 

25, 702 

1,345,130 

1, 653 

3,087 

902 

154, 130 

IQfi  ^M 

2 

10 

16 

637 

1 

1 

1 

130 

99 

76 

76 

108 

25 

7 

280 

2 

6 

37 

1 

33 

91 

2 

3  842 

Belgian 

20  518 

Bra  ilian 

25  702 

British 

91 

305,676 

1  650,806 

Ctiilean 

1,653 

Costa  Rican 

.............. 

3,087 

Cuban 



902 

Danish 

12 
11 
2 
8 
2 
3 

20,974 
24,567 

4,  713 
22, 157 

7,499 
13, 168 

175  104 

Dutch 

221  081 

French 

74  !     iS5;444 
68       142, 192 
106  1     227,889 
22         79  fisn 

190  157 

Greek 

164,349 

235,388 

85,848 

4,536 
415,257 

3,784 

Italian 

Mexican 

7 
256 

2 

6 
37 

1 
31 
85 

2 

4,536 

382, 561 

3,784 

7,742 

73,717 

2,229 

61,754 

133, 121 

2,110 

Norwegian 

24 

32,696 

Peruvian 

Portrguese 

■ 

7,742 

Russian 

............... 

73,717 

Siamese 

2,229 
66, 075 
147  114 

Spanish 

2 
6 

4.321 
13,993 

Swedish 

Uraguayan 

2  110 

Total  foreign 

161 

449, 764 

1,480 

3,051,237 

1,641 

3,501  001 

Total  American 
and  foreign 

14 

21, 806 

169 

480, 106 

185 

222,862 

1,480 

3,051,237 

1,848 

3,776,011 

Includes  a  vessel  of  2,707  tons  net  register,  Southerner,  laid  up  in  New  York,  and  a  vessel  of  4,278  tons  net 
register,  Oceana,  disabled. 

Includes  4  vessels  (13.294  tons  net  register)  built  for  coastwise  and  diverted  to  foreign  trade.  One  of 
these  vessels,  the  Gulflight,  of  3,202  tons  net  register,  was  destroj'ed  during  the  year. 

Table  III. — Number  and  net  tonnage  of  vessels  in  the  foreign  trade  of  the  United  States 
admitted  from  foreign  to  American  registry  under  act  of  Aug.  18,  1914,  during  year 
ended  July  SI,  1915. 


Former  registry. 

Sail  vessels. 

Steam  vessels. 

Total  all  vessels. 

Number. 

Net  tons. 

Number. 

Net  tons. 

Number.        Net  tons. 

Belgian 

2 
2  62 

3  555                    9                   ^  F>?.!i 

British 

127 
1 

127,441 
1,332 

s 1761887 

89  1              204  328 

Chilean 

1  t                1,332 

5  i                11,047 

27  1               78  .")68 

Cuban 

5 
S27 

11,047 

3  78,568 

German 

Italian 

1 

1,198 

1                    1198 

Me.xican 

4 
1 
1 

3,989 

442 

3,059 

4  '                 3*089 

Norwegian 

1 

595 

2                    i;637 
1                   3,059 

Roumanian 

Total 

130 

130,566 

U02 

« 277, 547 

132               308, 113 

1  Includes  1  vessel  330  tons  net  register  wrecked. 

2  Includes  1  vessel  1,8.';6  tons  net  register  seized  and  1  vessel  2,139  tons  net  register  sunk  by  mine. 
'  Includes  2  vessels  4,4."4  tons  net  register  seized. 

•  Includes  3  vessels  6,310  tons  net  register  seized  and  1  vessel  2,139  tons  net  register  sunk  by  mine. 


32910—10- 


-G 


78         SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Table  IV. — Number  and  net  tonnage  of  sail  and  steam  vessels  in  the  foreign  service  of 
the  United  States  withdrawn  for  causes  oficar  during  year  ended  July  31,  1915. 

SAIL  VESSELS. 


Nationalitj^  of  vessel. 

Interned  or 
laid  up. 

Taken  under 

Government 

charter. 

o„j,«^  ^,  «„^        Destroyed  or 
tured  ^'    disabledhybel- 
tured.               ligerents. 

Total  with- 
drawn. 

Num- 
ber. 

Net  tons. 

*>  am- 
ber. 

Net  tons. 

Num- 
ber. 

Net  tons. 

Num- 
ber. 

Net  tons. 

Num- 
ber. 

3 

Net  tons. 

British 

3 
3 

6,014 

6,014 

French            



6,352  1        3 

6,352 

9 

31 

19, 594 
937 

4 

7,191 

13 
5 

26,785 

4 

6,733 

7,670 

1 

Total  foreign.. 

Total   Ameri- 
can and  for- 
eign  

10         20,531 

4  !        7, 191 

10 

19.099  !       24 

46. 821 

10         20.  .=531 

1 
1 
4  i         7.191 

10 

i 
19,099  1      24 

46,321 

1 

STEAM  VESSELS. 


American 

1                  1 

3 

5,789 

3 

6,718 

6 

12,507 

,                                    1 

39 
I  1 
95 

119,892 

1,908 

315,916 

1 

2,170 

40 

2 

199 

3 

1 
218 
1 
4 
3 
1 

122, 062 

1 

41 
2 

885 

116,563 

2,905 

2,793 

British 

49 

227,731 

14 
1 

41,540 
829 

701,750 

3,734 

1 

1 

3,834 

3,834 

178 

21 

740,014 
1,135 

38 

114,897 

2 

8,4.57 

863,368 

1,135 

1 

944 

3 
2 
1 

6,759 
2,960 
1,023 

7,703 

1 

4,844 

7,804 

Swedish 

1,023 

1 

Total  foreign . . 

314 

1,178,865 

51 

236,409 

55 

160,380 

52 

139,552 

472 

1,715,206 

Total  Ameri- 
can and  for- 
eign  

314 

1,178,865 

51 

236, 409 

58 

166, 169 

55 

146, 270 

478 

1,727,713 

TOTAL,  ALL  VESSELS. 


American 



3 

5,789 

3 

6,718 

6 

12,507 

39 
11 
95 

119,892 

1,908 

315,916 

1 

2,170 

40 
2 

202 
3 
4 

231 
1 
9 
3 
1 

122,062 

Belgian 

1 
44 
2 
3 
2 

88.5 

122,577 

2,905 

6,352 

8,457 

2,793 

British 

Danish 

49 

227,731 

14 
1 

41,540 
829 

707,764 
3,734 

1 

3,834 

10. 186 

German 

187 

2  1 
31 

759,608 

1,135 

937 

42 

122,088 

890, 153 

1 

1.135 

1 

1 

944 

7 
2 

1 

13,492 
2,960 
1,023 

15.373 

1 

4,844 

7.804 



1,023 

" 

Total  foreign.. 

324 

1,199,396 

51 

236,409 

59 

167,571 

62 

1.58,651 

496 

1.762,027 

Total   Ameri- 
can and  for- 
eign  

324 

1,199,396 

51 

236.409 

62 

173.360 

65 

165,369 

502 

1,774.534 

•  At  Cronstadt  blockaded. 

*  At  Ensenada;  formerly  a  German  steamer. 
3  .\t  Riga  blockaded. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         79 

Appendix  B. 

Table  I. — Net  tonnage  of  sailing  and  steam  vessels  entered  and  cleared  at  the  leading  ports 
of  the  United  States  during  the  years  ended  July  31,  1914  and  1915,  distributed  with 
respect  to  domestic  ports  of  entries  and  clearances. 

ENTRIES. 


Leading  ports. 


Atlantic  coast: 

Portland,  Me 

Boston,  Mass 

New  York,  N.  Y 

Philadelphia,  Pa 

Baltimore,  Md 

Newport  -  'ews,  Va 

Norfolk,  Va 

Charleston,  S.  C 

Sav annah ,  Ga.i 

I'ernandina,  T  la 

Jack"sonville,  Tla 

Gulf  coast: 

Key  West.  Tla 

Tampa,  'la.* 

Pensacola,  "  la.'' 

Mobile,  Ala.3 

New  Orleans,  La.s 

Port  Arthur,  Tex 

Galveston,  Tex 

Port  Aransas,  Tex 

Sabine,  Tex 

Pacific  coast: 

San  Diep:o,  Cal 

Los  Angeles  (San  Pedro),  Cal 

San  "  rancisco,  Cal 

Astoria,  Oreg 

Portland,  Oreg 

Port  To  wnsend.  Wash 

Seattle,  Wash 

Tacoma,  Wash 

Total 


Year  ended  July  31- 


1914 

1915 

Number. 

Net 
tonnage. 

Number. 

Net 
tonnage. 

Net 
tonnage. 

Per  cent. 

76 

315,096 

66 

214,919 

100, 177 

31.8 

617 

2,2.57,647 

542 

1,541,533 

716,114 

31.7 

3,747 

14,680,310 

3,739 

11, 148, 853 

3,631,457 

24.1 

1,137 

2, 612, 309 

898 

1,850,601 

761,708 

29.2 

669 

1,5^2,499 

931 

1,966,644 

414,145 

26.6 

216 

547,375 

454 

1,224,343 

676, 968 

123.7 

286 

709,301 

476 

1,122,548 

413,247 

58.3 

127 

239,370 

68 

108,326 

131,044 

54.7 

161 

360, 036 

194 

351, 260 

8,776 

2.4. 

32 

50, 025 

7 

5,082 

44,943 

89.8 

52 

70,924 

22 

25, 795 

45, 129 

63.& 

596 

580, 714 

423 

422,800 

157,914 

27. » 

168 

312,023 

64 

63, 833 

248, 190 

79.  S 

219 

372,073 

81 

124,003 

248,070 

66.7 

655 

690, 650 

466 

438, 775 

251,875 

26.5 

1,472 

2,843,838 

1,504 

2,972,469 

128, 631 

4.5, 

148 

383,746 

170 

485,361 

101,615 

26.5 

603 

1,324,299 

721 

1,534,414 

210,115 

15.9 

23 

53,341 

2 

3,822 

49,519 

92.8 

50 

124, 823 

72 

174,020 

49, 197 

39.4 

73 

73,405 

63 

35,889 

37,516 

61.1 

35 

101,662 

38 

101,325 

337 

.S 

413 

1,326,898 

361 

1,028,769 

298, 129 

22.  S 

50 

104. 191 

53 

107,442 

3,251 

3.1 

31 

68, 104 

30 

54,409 

13,695 

20.1 

101 

336.212 

95 

286.641 

49, 571 

14-8 

31 

120, 286 

31 

122, 250 

1,964 

1.6 

11 

35, 983 

20 

68,031 

32,048 

89.1 

11,799 

32,247,140 

11, 591 

27,584,157 

4,662,983 

13.3 

'  Includes  entries  and  clearances  at  Brunswick,  Ga. 
*  Includes  entries  and  clearances  at  Port  Tampa,  I  la. 
3  Includes  entries  and  clearances  at  Gulfport,  Miss. 


80         SHIPPING  BOARD,  NAVAL  AUXH.IARY,  AND  MERCHANT  MARINE. 

Table  I. — Net  tonnage  of  sailing  and  steam  vessels  entered  and  cleared  at  the  leading  ports 
of  the  United  States  during  the  years  ended  July  31,  1914  and  1915,  distrilnited  vnth 
respect  to  domestic  ports  of  entries  and  clearances — Continued. 

CLEARANCES. 


Leading  ports. 


Atlantic  coast: 

Portland,  Me 

Boston,  Mass 

New  York,  N.  Y 

Pliiladelpliia,  Pa 

Baltimore,  Md 

Newport     ews,  Va 

Norf  IV,  Va 

Charleston,  S.  C 

Savannah,  Ga.' 

Ternandina,  3  la 

Jac  son\  ille,  7  la 

Gulf  coast: 

Key  West,  T  la 

Tampa,  "  la. 2 

Pensacola,    la.s 

Mobile,  Ala.3 

New  Or  eans,  I  a.' 

Port  Art  ur,  Tex 

Galveston,  Tex 

Port  Aransas,  Tex 

Sabine,  Tex 

Pacific  coast: 

San  Diego,  Cal 

Los  An^e.es  (San  Pedro),  Cal. 

San    rancisco,  (  al 

Astoria,  Oreg 

Portland,  Oreg 

Port  Townsend,  Wash 

Seattle,  Wash , 

Tacoma,  Wash , 


Total. 


Year  ended  lulj'  31— 
1914  1915 


Number. 


79 
446 
3,597 
986 
718 
339 
459 

92 
213 

13 

28 

587 
130 
237 
655 
1,464 
134 
606 
22 
57 

64 
24 

378 
69 
47 

102 
41 
25 


Net 

tonnage. 


Number. 


11, 602 


324, 978 

1,721,989 

14,3  2,929 

2, 199, 845 

1,632,945 

802,6.6 

1, 136, 057 

173,342 

501, 705 

10, 808 

33,466 

576, 210 
192,281 
407,979 
72-1,615 

2,820,913 
336,2-2 

1,382,837 
52, 398 
131,434 

27,  654 
67, 194 
1,227,178 
118,7.^0 
113,220 
319,015 
182,847 
94,177 


Net 
tonnage. 


31,655,694 


319 

3,542 

867 

1,005 

590 

680 

52 

221 

6 

14 

418 

49 

104 

492 

1,459 

170 

688 

1 

70 

56 
34 
357 
48 
54 
83 
37 
34 


247, 789 

857, 627 

11,015,880 

1,757,021 

2, 038, 993 

1,515,779 

1,519,104 

70,602 

418.257 

4,155 

20, 897 

413,195 

33, 537 

183, 141 

444,660 

2,895,472 

469,406 

1,572,970 

1,911 

183,223 

26, 229 
84,280 
1,030,046 
102, 132 
105, 877 
219, 786 
132,961 


11,529 


27, 461, 770 


Increase  or  decrease. 


77, 189 
864, 362 
,  327. 049 
442, 824 
406.048 
713,133 
383,047 
102,  740 

S3, 44s 
6, 653 

12,569 

163,015 
158,744 
224, 838 
279.955 
74, 559 
133, 124 
190, 133 
60, 487 
51, 789 

1,425 

17,  086 

197,132 

16,618 

7,343 
99, 229 
49, 886 

2,663 


4, 193, 924 


23.8 
60.2 
23.2 
20.1 
24.1 
88.8 
33.7 
69.3 
16.6 
61.6 
37.6 

28. 3 
82.6 
56.1 
38.6 
2.6 
39.6 
13.8 
96.4 
39.4 

6.2 
25.4 
16.1 
13.9 

6.5 
31.1 
27.3 
28.3 


14.6 


Italic  indicates  decrease. 


1  Includes  entries  and  clearances  at  Brunswick,  Ga. 

2  Includes  entries  and  clearances  at  Port  Tampa,  Fla. 

3  Includes  entries  and  clearances  at  Gulfport,  Miss. 


Table  II. — N'et  tonnage  of  sail  and  steam  vessels  entered  and  cleared  at  leading  ports 
of  the  United  States  in  its  trade  with  foreign  countries  during  the  years  ended  July  .31, 
1914  and  1915,  distributed  with  respect  to  foreign  countries  and  registries. 


Registry. 

Entries, 

year  ended  July  31— 

Clearance 

s,  year  ended  July 

31— 

Foreign  coun- 
tries from  which 
entered  and  for 

1914 

1915 

1914 

1915 

which  cleared. 

Net 
toimage. 

Per 
cent. 

Net 
tonnage. 

Per 

cent. 

Net 
tonnage. 

Per 
cent. 

Net 
tonnage. 

Per 
cent. 

EUROPE. 

Austria-Hungary 

British 

German 

Other  foreign.. 

Total... 

American 

British 

German 

Other  foreign. . 

Total . . . 

108, 184 

3,148 

323,529 

25 

1 

74 

6,210 

32 

86,037 

3,148 

206, 199 

29 

1 

70 

8,660 

67 

is,  683 

68 

4,405 

33 

431,861 

100 

19,893 

100 

295,384 

100 

13, 065 

100 

Belgium  

189,673 

513,229 

6,980 

412,743 

17 
45 

1 
37 

15, 854 
53, 929 

20 
68 

188,436 

628, 781 

9,764 

427,214 

15 

50 

1 

34 

7,927 
40,842 

15 

76 

9,590 

12 

4,897 

9 

1,122,616 

100 

79,373 

100 

1, 254, 195 



100 

53,666 

100 

SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         81 


Table  II. — A^et  tonnage  of  sail  and  steam,  vessels  entered  and  cleared  at  leading  ports  of 
the  United  States  in  its  trade  ivitk  foreign  countries  during  the  years  ended  July  31, 
1914  (i^d  1915,  distributed  with  respect  to  foreign  countries  and  registries — Continued. 


Registry. 

Entries,  year  ended  July  31— 

Clearances,  year  ended  July  31— 

Foreign  coun- 
tries from  which 
entered  and  for 

<             1914 

1 

1915 

1914 

1915 

which  cleared. 

Net 
tonnage. 

Per 
cent. 

Net 
tonnage. 

Per 
cent. 

Net 
tonnage. 

Per 
cent. 

Net 
tonnage. 

Per 
cent. 

EUROPE— contd. 
Denmark 

American 

British 

German 

Other  foreign. . 

Total... 

American 

British 

German 

Other  foreign. . 

Total... 

American 

1,797 

22, 143 

27, 246 

205, 065 

I 

10 

SO 

46,562 
6,427 

9 
1 

58,872 
3,329 

s 

42, 754 

37,972 

210, 160 

14 

13 
73 

1 

417, 822 

90 

661, 982 

91 

256,251 

100 

470,811 

100 

290, 876 

100 

724, 183 

100 

France 

16,116 
223,811 

86, 957 
827. 173 

1 

19 
8 
72 

21,815 
914,045 

38, 525 
694, 222 

1 
55 

2 
42 

9,007 
466,489 
103, 936 
895, 040 

1 

32 

7 
60 

59,932 

1,748,122 

2 

68 

780,097 

30 

1,154,057 

100 

1,668,607 

100 

1,474,472 

100 

2,588,151 

100 

Germany 

42,916 
12, 226 
49,237 
12, 758 

37 
10 
43 
10 

541 

648,028 

2, 785, 205 

88,513 

1 

18 
79 

2 

45, 576 

86 

British 

German 

Other  foreign. . 

Total... 

American 

422, 536 

3, 000, 866 

112,967 

12 

84 
4 

5,182 

1,864 

10 
4 

3,536,369 

100 

117, 137 

100 

3, 522, 287 

100 

£2, 622 

100 

Greece 

7,927 
63, 638 

4 
28 

British 

German 

36,695 

18 

58,888 

44 

193, 889 
5,  S72 

176,720 

51 
2 

Other  foreign. . 

Total... 

American 

British 

German 

Other  foreign. . 

Total . . . 

American 

British 

German 

Other  foreign. . 

Total... 

American 

168, 158 

82 

152, tS3 

68 

74,461 

56 

47 

204,853 

100 

223, 748 

100 

133,3-19 

100 

376, 181 

100 

Italy.   .   . 

326 

462, 969 
217, 982 
929, 860 

1 

29 
12 

58 

73, 923 
918,371 

3 

37 

326 
627, 259 
282, 940 
969,484 

1 
33 
15 
51 

67,937 

948,816 

1,818 

1,565,981 

3 

36 
1 

1,504,613 

60 

60 

1,601,128 

100 

2, 496, 907 

100 

1,880,009 

100 

2, 584, 562 

100 

Netherlands 

12, 832 

274, 069 
106, 700 
952, 951 

1 

20 
8 
71 

67,  793 

90,386 

9,664 

1,249,534 

5 
6 
1 

88 

3, 275 

490,511 

164,936 

1,064,335 

1 
28 
10 
61 

61,623 
121,361 

4 
9 

1,227,439 

87 

1,346,552 

100 

1,417,377 

100 

1,723,067 

100 

1,410,323 

100 

Norway 

1,797 

43, 591 

4,369 

207, 332 

1 
17 

2 
80 

British 

German 

Other  foreign. . 

Total... 
American 

113,110 

6, 926 

212,249 

34 
2 

64 

17,283 

4 

11,627 

4,807 
421,911 

3 
1 

430,969 

96 

96 

332,285 

100 

448,252 

100 

257,089 

100 

438,345 

100 

Portugal 

6,358 
28,035 

8 

14, 580 
17,304 

23 

British 

German 

Other  foreign.. 

Total... 

American 

49,484 
11,826 
69,484 

37 

9 

54 

35 

45, 8f 5 
16,391 
54,773 

39 
14 
47 

28 

44, ICO 

57 

30,732 

49 

130,804 

100 

78,553 

100 

117,029 

100  j        62,C16  1      100 

Russia 

1 

...     .                      1 

10,2(3 

26,3f9 

9   779 

7 

British 

German 

22,872  1      13 

7,353 

8 

16, 776 

2,835 

119,951 

12 

2 

19 
2 

Other  foreign.. 

Total... 

American 

155,487  1      87 

90,187 

92 

86           99;9e0 

72 

178,359  1     100 

97,540 

100 

139, 5P2 

100         139, 414 

100 

Spain 

5,479 
238, 447 

1 
41 

129 
119,5(0 
25,017 
260, 125 

1          n  r.7Q 

2 

Briti.«h 

German 

Other  foreign.. 

TotaL.. 

269,954 

19, 576 

216, 333 

53 

4 

43 

29 
6 
64 

125,353 

25 

328, 825 

58 

361, 175 

73 

505. 8C3 

100 

572, 751 

100 

404,831 

100 

498.207 

100 

S2         SHIPPIXC  BOARD,  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


Table  II. — Net  tonnage  of  sail  and  steam  vessels  entered  and  cleared  at  leading  ports 
of  the  United  States  in  its  trade  with  foreign  countries  during  the  years  ended  July  31, 
1914  and  1915,  distributed  with  respect  to  foreign  countries  and  registries — Continued. 


Registry. 

Entries,  year  ended  July  31— 

Clearances,  year  ended  July  31— 

Foreign  coun- 
tries from  which 
entered  and  for 

1914 

1915 

1914 

1915 

which  cleared. 

Net 
tonnage. 

Per 
cent. 

Net 
tonnage. 

Per 

cent. 

Net 
tonnage. 

Per 

cent. 

Net 
tonnage. 

Per 
cent. 

EUEOPE— contd. 

American 

31,277 

14,236 

2,876 

193,743 

13 

6 
1 

80 

599 
6,622 
33,706 
27,455 

1 

10 
49 
40 

64,961 

17 

British 

German 

Other  foreign.. 

Total... 

American 

British 

German 

Other  foreign.. 

Total... 

American 

4,642 

1,999 

38,473 

11 
4 

85 

324,964 

83 

45, 114 

100 

242, 132 

100  I        68,382 

100 

389,925 

100 

United  Kingdom 

241, 148 

6,740,2.39 

169,012 

195,799 

3 
92 
2 
3 

308,015 

7,099,284 

47,186 

957, 636 

4         234,126  1        3 
84     6,760,302  1      92 

1         176,427           2 
11         178,627          3 

279, G57 

6,540,067 

6,597 

541,886 

3 

89 
1 
7 

7,346,198  1     100 

8,412,121 

100  1  7,349,482  |     100 

7,368,207 

100 

Other  Europe... 

1.276 

161, 536 

2,361 

72,649 

1. 

12,213 
128,452 

6 

British 

German 

Other  foreign.. 

Total... 

American 

British 

German 

Other  foreign.. 

Total... 

A  merican 

British 

German 

Other  foreign.. 

Total... 

j^  merican 

British 

German 

Other  foreign.. 

Total... 

A  meri-an 

British 

German 

Other  fore i;in.. 

Total... 

A  meriean 

British 

Other  foreign.. 

Total... 

A  merican 

British 

German 

Other  foreign.. 

Total... 

A  merican 

British 

German 

Other  foreign. . 

Total... 

89, C45         57 
42,428         27 
24,859         16 

68 

1 

30 

51.816 
16.297 
15,031 

62 
19 
19 

67 

50,348 

27 

156,932       100 

237,822 

100  1        83,144  1     100 

191,013 

100 

Total  Europe 

561,892 
9,353,574 
3,591,646 
4,842,130 

3 
51 

20 
26 

629, 195 
9,631,406 

149, 849 
6,172,574 

4  1      438,236  |        3 
58   10,093,279         53 

1  '  3,662,943         19 
37  i  4,798,690  |      25 

695, 120 

9,914,211 

2(i,74S 

6,254,391 

4 
59 

"'"'37 

18,349,242 

100 

16,583,024 

100    18,993,148       100 

16,890,470 

100 

JffORTH  AMERICA. 

Central    Ameri- 
can States. 

.■)16,374 
79.1,517 
101, 255 
516. 743 

27 

41 

5 

27 

989,681 
318,719 

57 
19 

531,472 

770,638 

97,042 

574,324 

27 

39 

5 

29 

922,954 

238,0.34 

5,  IS? 

465,596 

56 

15 

1 

4"0,642 

24 

28 

1,929,889 

100 

1.729,042 

100     1,973,476 

100 

1,631,766 

100 

Mexico 

709,8.30 
769, 771 
30'i,  935 
419,046 

32 
35 
14 
19 

641,247 

383,947 

12, 143 

401, 792 

45 
26 

1 
28 

517, 699 
705, 158 
262,  TO? 
394, 672 

28 
38 
14 
20 

593,  ■■•08 

34 ',979 

13, '37 

320,519 

47 

27 

1 

25 

2, 205, 5S2 

100 

1,439,129 

100  {  1,879,731 

100 

1, 269, 943 

100 

West  Indies 

1,094,762 

1.783,729 

323,714 

1,592,595 

23 

37 

7 

33 

],386,9f6 

761,268 

6,003 

1,405,100 

39     1,174,915 

21      1,480,093 

1         279. 727 

39     1,482;  525 

27 

33 

6 

34 

1,600,068 

720, 9  T) 

1,697 

1,338,188 

44 

19 

1 

36 

4,794,800 

100 

3,559,297 

100     4,417,260 

100 

3,660,879 

100 

-Other  North 
America. 

703 

302,227 

2,901 

1 

98 

1 

49,204 

122,521 

14,076 

26 
66 

8 

1,414 

308,626 
3,685 

1 

98 

1 

5.5,648 
103,975 

35 
65 

305, 831 

100 

185, 801 

100 

313, 725 

100 

159, 623 

100 

T«tal  North 
America. 

2,321,669 

3,651,244 

731,904 

2,531,285 

25 
39 

8 
28 

3,067,0.58 

1,586,455 

18, 146 

2,241,610 

44 

23 

1 

32 

2,225,500 

3,264,515 

638, 971 

2,455,206 

26 
38 

8 
28 

3,171,878 

1,405,914 

20,116 

2, 124. 303 

47 

20 

1 

32 

9,236,102 

100 

6,913,269 

100 

8,584,192 

100 

6,722,211 

100 

SOUTH  AMERICA. 

Argentina 

36,499 

507, 730 

6, 9S4 

57, 630 

6 

84 
1 
9 

5S,  630 
292, 942 

14 
70 

16, 348 

363,561 

10,033 

7(),  010 

4 

78 
2 

16 

43,408 
252, 708 

11 
61 

70,268 

16 

114,446 

28 

608,843 

100 

421,840 

100 

465,952 

100 

410,562 

100 

SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         83 

Table  II. — Net  tonnage  of  sail  aud  steam  vessels  entered  and  cleared  at  leading  forts  of 
the  United  States  in  its  trade  with  foreign  tovntries  during  the  years  ended  July  Sly 
1914  and  1915,  distributed  with  respect  to  foreign  countries  and  ngistries— Continued. 


Registry. 

Entries, 

year  ended  July  31— 

Clearances 

,  year  ended  July  31— 

Foreign  coun- 
tries from  which 
ei.tered  and  f.r 

1914 

1915 

1914 

1915 

which  cleared. 

Net 
tonnage. 

Per 

cent. 

Net 

tonnage. 

Per 

cent. 

Net 
tonnage . 

Per 

cent. 

Net 
tonnage. 

Per 

cent. 

SOUTH  AMER- 
ICA—continued. 

Brazil 

.*  merican 

British 

German 

Other  foreign.. 

Total . . . 

^  merican 

British 

German 

Other  foreign.. 

Total... 

."  merican 

Briti-sh 

German 

Other  foreign.. 

To'.al . . . 

A  meri<^^'an 

British 

Gorman 

Other  foreign.. 

Total... 

A  merican 

British 

German 

Other  foreign.. 

Total... 

'merican 

British 

German 

Other  foreign. . 

Total... 

A  merican 

British 

German 

Other  foreign. . 

Total... 

'  meri-ran 

British 

German 

Other  foreijn.. 

Total... 

'  merican 

Briti'-h 

German 

Other  foreign.. 

Total . . . 

46,662 

■   695,105 

53,214 

84,714 

5 
79 

6 
10 

88,064 
287, 549 

"'i.3S,'942 

17 
56 

"27" 

34,994 

38.5,620 

54,969 

42,278 

74 
11 

8 

115,993 

345,969 

3,641 

159,068 

19 

56 

1 

24 

879,695 

100 

514, 555 

100 

517,861 

100 

624,671 

100 

Chile 

16,552 

254, 239 

97,5.3 

36,874 

4 
63 
24 

9 

73,230 

205, 781 

5,573 

113, 146 

18 

52 

2 

28 

15.583 
224;  493 
104,858 

29, 744 

4 
60 

28 
8 

57, 168 
126,585 

21 

47 

84, 798 

32 

405,188 

100 

397.730 

100 

374,678 

100 

268,551 

100 

Colombia 

599 

66,986 

16, 359 

5,944 

1 
75 

IS 
6 

V7,674 
12,383 

78 
12 

3,022 
22, 263 

29, 177 
11,251 

5 
34 
44 
17 

24,532 
9,994 

51 
20 

9,532 

10 

13,896 

29 

89,888 

100 

99,589 

100 

65, 713 

100 

48,422 

100 

OtherSouth 
.\  merica. 

37,676 

343, 169 

21,103 

94,043 

7 
70 

4 
19 

90, 151 

£08,427 

3,638 

53,021 

25 

58 

1 

16 

37,012 

267,648 

17, 730 

66,403 

9 
69 

4 
18 

107,879 
189,662 

29 
50 

76, 798 

21 

495,991 

100 

355, 237 

100 

388, 793 

100 

374,339 

100 

Total  South 
America. 

137, 988 

1, 867, 229 

195, 183 

£79,::05 

6 
75 

8 
11 

387. 749 

1,007.082 

9,211 

384,909 

22 
56 

1 
21 

106,959 

1,263,585 

216.767 

225,686 

6 
70 
12 
12 

348.980 

924,918 

3,641 

449. 006 

20 

53 

1 

26 

2,479.605 

100 

1,788,951 

100 

1,812,997 

100 

1,726,545 

100 

MISCELL.^NEOUS. 

Asia..  . 

157,430 
64. ',541 
]4?,1'97 
353,998 

12 
50 
11 
27 

150,049 

.    67:,  032 

16,343 

371,879 

12 

56 

1 

31 

151,418 
610,474 
112,746 
387, 681 

12 

48 

9 

31 

152,786 
636, 755 

18 

55 

362, 324 

32 

1,296,266 

100 

1,210,303 

105, 949 
230,456 

"  91,'316 

100 

1,262,319 

100 

1,151,865 

100 

Oceania 

126,442 

23'^3S8 
19, 963 

27, 3s:: 

3) 
57 

5 

100 

.■? 

67 

r 

24 

25 
54 

124,537 

317,344 

63,270 

46,064 

23 
57 
12 

8 

118,614 
361,921 

""  71,684 

22 
65 

is 

406, 175 

427, 721 

100 

551,215 

100 

552,219 

100 

Africa 

13.147 
3-:2,300 

27,425 
116,  S3S 

479, 7.W 

50, 909 

377,  f;9' 

3,0  6 

2:9,262 

■    660, 889 

8 
57 

1 
34 

10,838 
272,221 

46,231 
122, 533 

3 

60 
10 

27 

40, 165 
277,025 

""i6i.'276 

10 

66 
'""24 

100 

100 

451,823 

100 

418,460 

100 

Total   all   coun- 
tries. 

3,918,568 
! 6, 009, 276 
4,80'-',45S 
8,150,838 

10 
50 
15 
25 

4,390,909 

•3, 505, 1''.-? 

196,  .575 

.9,491,550 

16 
49 

1 
34 

3,057,488 
15,821.418 
4,740,9''8 
8,0?  5, 860 

10 
50 
15 
25 

4, 5'^7,  .543 

13,5'^0.744 

50, 505 

9,362,978 

17 
49 

3'',f47,140 

100 

"^7.584,157 

100 

31,655,694 

100 

27,461,770 

100 

1  Less  than  one-half  of  1  per  cent. 


84         SHIPPING  BOAllU^  NAVAL  AUXIIJAIU,  AND  MERCHANT  MARINE. 


Table  III. — Net  tonnage  entered  and  cleared  at  leading  ports  of  the  United  States  in  its 
trade  ivith  foreign  countries  during  the  years  ended  July  31,  1914  and  1915,  distributed 
with  respect  to  sail  and  steam  vessels,  and  their  registry. 


Entries  and  clearances  of  vessels  under- 

i^ears   of   entries   and 
clearances  and  power 
of  vessels. 

American  reg-      British  regis- 

istiy.                     try. 

German  regis- 
try. 

Other  foreign 
registry. 

Total  all  regis- 
tries. 

Net  ton- 
nage. 

Per  1  Net  ton- 
cent.  1     nuge. 

Pe- 

cent. 

Net  ton- 
nage. 

Per 

cent. 

Net  ton- 
nage. 

Per 
cent. 

Net  ton- 
nage. 

Per 

cent. 

ENTRIES. 

1914— Sail 

171,239 

'^.?,1:       1.30  763 

0.81 
99.19 

2.5,251 
4, 783, 207 

0.53 

99.47 

204,073 
7,046,705 

2.50 
97.50 

531.326 
31,715,814 

1  65 

3  047  323i  94  6S  ^^  9:^S  hvx 

3,218,568100.00 

'       ' 

Total 

16  (\m  5>7ri 

im  no 

4,808,458 

100  00 

s  i.^n  sas 

100.  OC 

32, 247, 140 

100  00 

'        '         1               !      '         '         i 

1915— Sail 

22i,8J2'     .=;.  lol       lU.fl37 

.85 
99.15 

313,712 

Q   177   SMK 

3.31 
96.  C< 

652, 201 
26,931,956 

2  36 

Steam 

4,167,057 

94.90  13,-390,486 

196, 575 

100  00 

97  64 

Total 

4,  .390, 909 

100.0013,505,123 

100. 00 

196, 575 

100.00 

9,491,550 

100. 0( 

27, 584, 157 

100.  OO 

CLEARANCES. 
1914— Sail 

153, 179 
2,904,303 

5.01 
94.99 

112,388 
15, 709, 030 

.71 
99.23 

23, 704 
4,711,224 

.60 
99.40 

172,846 
7,863,014 

2.15 
97.85 

468, 117 
31,187,577 

1  48 

Steam 

98  52 

Total 

3,057, 488  inn.  on' 1.T  s2t  41s 

100. 00 

4,740,92S 

100.00 

8,035,860 

100.00 

31,655,694 

100  00 

1     '  -     '  -— 

1915— Sail 

231,741 

4,2j5,802 

6.44 
93.56 

118,322 
13,41,2,422 

.88 
99.12 

311,251 
9,051,727 

3.32 

90. 68 

721,314 

26, 74U,  456 

2  63 

Steam 

50, 505 

100. 00 

97  37 

Total 

4,527,543 

100.00 

13, 523, 744 

100.00 

50,505 

100.00 

9,302,978 

100  00 

27,461,770 

100  00 

Table  IV. — Net  tonnage  of  s"H  and  steam  vessels  entered  and  cleared  during  the  years 
ended  July  31,  1914  and  1915. 


PORTLAND,  ME. 


1914 

1915 

Foreign  country  served. 

Entries. 

Clearances. 

Entries. 

Clearances. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Nura- 
Der. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Europe: 

Austria-Hungary 

1 

2, 486 

2 

4,723 

Denmark 

1 

2 
4 
1 
2 
2 

1  434 

France 

2 

6,906 

2 

3,650 

8,334 
215 

Germany 

1 

215 

Italy 

3 

4,450 

1 
2 
1 

1,501 
4,770 
2,147 

5,238 

Netherlands 

3,874 

Portugal 

1 

2,147 

Spain 

1 

59 

1 

1,205 

207,255 

2,346 

Unite  J  Kingdom 

Other  Europe 

56 

270, 123 

61 

295,619 

62 

220,902 

t     ' 

i         

Total  Europe 

63 

296. 112 

69 

312,410 

62 

211,021 

73 

239,997 

North  America: 

Mexico 

1 
7 

2,266 
6,011 

West  Indies 

8 

5,712 

2 

484 

3 

3  510 

Total  North  America... 

8 

5  712 

8 

8,277 

2 

484 

3 

3,510 

South  America: 

Argentina 

1 
2 

2,408 
5,599 

I 

Brazil 

1 

1,964 



Chile 

1 

1,715 

1 

1  715 



Total  South  America... 

3 

8,007 

1 

1,964 

1 

1,715 

1 

1,715 

Oceania 

1 

1 
1 

868 

Africa 

2 

5,265 



1 

2,327 

1 

i,699  ■ 

1  699 

Total  all  countries 

76 

315,096 

79 

324,978 

66 

214,919  1 

1 

79 

247,  789 

SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         85 

'I'ABLE  IV. — Net  tonnage  of  sail  and  steam  vessels  entered  and  cleared  during  the  years 
July  SI,  1914  and  i9i5— Continued. 

BOSTON,  MASS. 


1914 

1915 

Foreign  country  served. 

Entries. 

Clearances. 

Entries. 

Clearances. 

Num- 
ber. 

Net  ton- 
nage. 

Nura- 
bsr. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Europe: 

Austria-Hungary 

1 

25 

10 

2 

43 

21 

22 

3 

1 

2 

8 

5 

179 

2 

4,536 

111,311 

24,382 

1,310 

254,578 

137,471 

79,874 

6,614 

3, 1.52 

5,964 

16,482 

14,297 

990,208 

17,326 

Belgium 

15 
5 

1 
33 
17 
18 

2 

74,895 

11,344 

3,226 

210,981 

115,231 

65,634 

3,737 

2 
14 

1 

5 
15 
19 

9 

8,920 
29,439 

3,619 
20,078 
103,937 
64, 114 
20,063 

1 
8 
2 

4,384 

15, 494 

7,246 

Germany 

Italy 

12 
9 

7 

70,616 

Netherlands 

30,517 

Norway 

14,196 

Russia 

1 

Spain    

4 

2 

165 

2 

7,594 

5,662 

921,582 

17,326 

7 

12 

179 

2 

14,792 

20,691 

695,737 

11,038 

Sweden 

2 
121 

3,726 

United  Kingdom 

459, 989 

Total  Europe 

324 

1,667,505 

264 

1,437,212 

265 

992,428 

162 

606, 168 

North  America: 

Central  American  States. . 
Mexico      .          

43 

9 

149 

89,503 
20,455 
188,116 

39 

79,691 

33 

3 

133 

71,585 

3,901 

161,207 

27 

59, 129 

West  Indies 

122 

147,365 

104 

127,975 

Total  North  America. . . 

201 

298,074 

161 

227,056 

169 

236,693 

131 

187.104 

South  America: 

Argentina 

14 

1 
4 

29,409 
2,729 
15,009 

9 

1 

15,301 
829 

27 
1 
2 
1 
6 

61,115 

886 

6,301 

717 

16,405 

8 
1 

17,774 

Brazil 

886 

Chile 

Col  mbia      .        

2 
1 

2,800 
1,432 

Other  South  America 

7 

14,839 

1 

2,125 

Total  South  America . . . 

26 

61,986 

13 

20,362 

37 

55 
10 
6 

85,424         10 

20,785 

Asia 

60 

209,3.52 
18, 160 
2,570 

6 

20,033 

181.354  1        7 
32,0.58           4 
13,. 576  1        5 

24,309 

Oceania    

12,450 

Africa 

2 

17,326 

6,811 

Big" 

Total  all  countries 

617 

2,257,647 

446 

1,721,989 

542 

1,541,533 

857,627 

NEW  YORK,  N.  Y. 


Europe: 

Austria-Hungary 

Belgium 

Denmark 

France 

Germany 

Greece 

Italy 

Netherlands 

Norway 

Portugal 

Russia 

Spain 

Sweden 

United  Kingdom 

Other  Europe 

Total  Europe 

North  America: 

Central  American  States 

Mexico 

West  Indies 

Other  North  .\merica. . . 


60 

105 

34 

188 

241 

22 

221 

112 

24 

27 

19 

87 

2 

587 

21 


1,750 


209 

18^1 

1,000 

91 


Total  North  America...  jl, 489 


30"!,  716 
65Q,  408 
141, 820 
831,332 

1,953, 5-^8 
202, 495 

1,08  ,083 

(191,080 

135,091 

70,  727 

81,429 

203, 3f;6 

2,895 

3,470,018 
117,129 


40 

103 

30 

227 

191 

21 

202 

147 

30 

25 

12 

52 

11 

520 

10 


9,970,223  il,C21 


C20, 503 

540,  237 

1, 875, 180 

302,353 


217 

152 

928 

93 


3,347,273   1,390 


187, 577 
641,l>15 
133, 708 
923,  (01 
1, 732, 720 
130, 991 
1,092,140 
830, 034 
158, 511 

65, 057 

50,284 
127,787 

21,387 
3,315,513 

50, 713 


9, 461,138 


635, 461 

455, 854 

l,819,f42 

308,  925 


3, 219, 882 


3 

5 
82 

291 
16 
47 

272 

249 
53 
16 
10 
79 
43 

767 
25 


1,958 


158 
136 
946 
61 


1,301 


13, 040 

21,(70 

247, 541 

1,031,4(9 

40, 407 
158, 615 
979,  f  00 
870,557 
222,  739 

3^,2  9 

34, 545 
189, 540 

87,  (i71 
3, 324, 879 

72, 532 


7,336,074    1,8'^3 


2 

5 

119 

393 

9 

5() 

245 

228 

(2 

14 

22 

59 

73 

548 


516, 710 

3  8, 9  1 

1,536,518 

168, 756 


133 
93 

907 
56 


2,590,945   1,189 


13,  Of  5 

23, 4r2 

305, 297 

1,305,433 

18,(01 

21  9, 828 

903,119 

815,407 

230, 333 

32, 118 

65,  422 

144,117 

159, 227 

2, 73^1,  383 

112,850 


7, 134, 722 


44''',  908 

263, 271 

1,654,090 

158,547 


2, 522, 876 


86         SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


Table  IV. — Net  tonnage  of  sail  and  steam  vessels  entered  and  cleared  during  the  years 
July  .31,  1914  and  ^9^5— Continued. 

NEW  YORK.N.  Y.— Continued. 


1914 

1915 

Foreign  countrj-  served. 

Entries. 

Clearances. 

Entries. 

Clearances. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

South  America: 

90 
134 
11 
31 
121 

2">5, 203 
358, 183 
27, 675 
83,467 
284, 043 

76 
140 
25 
24 
113 

225, 346 

379, 616 

82,  f  55 

54, 142 

230, 327 

68 

101 

19 

31 

110 

198,635 

223, 4r  8 

49,884 

89, IfO 

218,941 

43 

124 

1 

17 
100 

112,816 

Bra  il    

311, 2'U 

Chile 

57,700 

Co'ombia 

38,  505 

Other  South  America 

198, 714 

Total  South  America.. . 

387 

1,018,571 

378 

978, 086 

329 

783,088 

285 

718,996 

43 
21 
57 

130, 907 
54,  809 
158, 527 

83 

r,2 

63 

282, 810 
18  1,  733 
213,780 

55 
23 
73 

170, 147 
61,045 
207, 554 

92 

62 
51 

310, 379 

1(.7  443 

101,404 

Total  all  countries 

3,747 

14, 680, 310 

3,597 

14,342,929 

3,739 

11, 148, 853 

3,542 

11,015,880 

PHILADELPHIA,  PA. 


Europe: 

Austria-Hungary... 

24 
26 
14 
25 
64 

63,933 
90,693 
31,351 
43,298 
255,787 

9 
37 
26 
29 
41 

25,826 
137, 1S6 
60,298 
56, 848 
163,442 

1 

2 

14 

29 

3 

7 

55 

29 

33 

3 

1 

41 

16 

211 

6 

2,068 

6,366 

27, 381 

70, 709 

14, 784 

13,539 

152,297 

79, 158 

84,746 

6,070 

1,773 

93, 824 

24, 414 

594,977 

13, 873 

Belj^ium ...                ... 

1 
26 
59 

1,982 

Denmark . .             

50, 723 

France 

142,468 

Greece 

7 
63 
42 
23 

13, 825 

Italy 

23 

33 

53 

7 

3 

39 

5 

205 

91,476 
108, 022 
151,949 

18,326 
7,941 

92,385 

15,404 
625,966 

35 
46 
19 

5 

1 
13 

8 
178 

2 

121,486 

148,481 

48, 144 

12,006 

2,337 

36, 134 

19,889 

564,808 

4,475 

168,468 

Netherlands 

116,469 

Norway                       .   .   . 

57, 507 

Portnsral 

Russia 

Spain 

19 

21 

163 

3 

46, 365 

Sweden 

33, 405 

United  ICinedom 

487, 629 

Other  Europe 

6,301 

Total  Eiu-ope 

521 

1,596,531 

449 

1,401,360 

451 

1,185,979 

427 

1, 125, 142 

North  America: 

Central  American  States. . 
Mexico 

4 

41 

452 

2 

8,414 
142,507 
585, 450 

1,429 

3 
39 

426 
2 

9,792 
103, 344 
533, 950 

1,685 

14 

24 

345 

1 

26,200 

70, 305 

415, 167 

2,746 

4 

24 

357 

4,880 
65, 574 

West  Iniies 

429, 798 

Other  North  America 

Total  North  America. . . 

499 

737,800 

470 

648,771 

384 

514,418 

385 

500,2.52 

South  America: 

Argentina 

16 
16 
9 
2 
13 

25, 008 
39, 318 
27, 712 
1,983 
18, 791 

10 
9 
3 
4 
9 

14,989 
19, 961 
5,847 
3,591 
15, 514 

13 
5 
14 

24,979 
9,672 
41,883 

14 
14 
6 
3 
2 

31,426 

Bradl 

34,937 

Chile 

14,322 

Colombia 

2,071 

Other  South  America 

3 

4,664 

2,605 

Total  South  America... 

56 

112, 812 

35 

59, 902 

35 

81, 198 

39 

85,  :361 

Asia. . . 

35 

3 

23 

102, 229 

6,491 

56, 446 

23 
1 

8 

65, 492 

1,609 

22, 711 

12 

1 

15 

34, 319 

2,509 

32, 178 

10 
3 
3 

28  997 

Oceania 

11,414 

Africa 

5  "^55 

Total  all  countries 

1,137 

2, 612, 309 

986 

2, 199, 845 

898 

1, 850, 601 

867 

1,757,021 

SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         87 


Table  IV.- — Net  tonnage  of  sail  and  steam  vessels  entered  and  cleared  during  the  year 
July  31,  1914  and  i9i5— Continued. 

BALTIMORE,  MD. 


1914 

1915 

Foreign  country  served. 

Entries. 

Clearances. 

Entries. 

Clearances. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Europe: 

10 
9 
9 

58 

32, 126 

22,325 

27,601 

310,081 

11 
11 

24 
62 

37,141 

26,733 

68, 949 

333.098 

1 

90 

98 

1 

7 

122 

(5 

44 

2,962 

Denmark 

48 
41 

76,589 
103,469 

127, 754 

245,990 

5,182 

7 
130 
56 
16 

2 

16,786 

316,0.38 

172, ISO 

44,858 

2,265 



17.229 

Italv 

15 

28 
2 
2 
5 

25 
2 

60 

35, 194 
123,520 
3,042 
2,273 
15,001 
58,214 
5,5C4 
226,715 

25 
40 
2 
4 
5 
15 

57,381 

151,512 

2,972 

7,621 

13,516 

34,054 

298,002 

Netherlands       

191.502 

.57, 468 

3 
13 
29 
145 

3 

7,537 

40 

13 

222 

12 

&3,757 

25,927 

525,3(1 

22,234 

28,844 

45,2.30 

81 

263,059 

394,958 

3,915 

Total  Europe 

231 

881,656 

280 

996,036 

587 

l,389,4f4 

621 

1,426,573 

North  America: 

Central  American  States.. 

5 

25 

330 

67,954 
420,440 

29 

43 

315 

43, 143 
103,484 
361,545 

5 

26 

218 

1 

7,926 

63,485 

283,014 

1,872 

20 
33 

224 

28,586 
84.362 

254, 968 

Other  North  America 

Total  North  America... 

300 

495,864 

387 

508,172 

250 

356,297 

277 

367,916 

South  America: 

10 

23 

12 

3 

48 

24.973 

.52,719 

31,403 

7,107 

12 
6 
4 
3 

28.715 
16,973 
10,221 

7,889 

12 

21 

S 

3 

29,672 

49,331 

25,704 

5,384 

42 

8 

2I 

96,878 

Brazil       

16,3.58 

Cliilc 

11,137 

Other  South  America 

49,041 

Total  South  America... 

116,262 

25 

63,798 

44 

110,091 

76 

173,414 

Asia 

10 
2 

IS 

27,270 

6,527 

44,920 

3 
4 

19 

7,921 
11,127 
45,891 

4 

5 

41 

9,lf8 
11,353 
90,271 

3 

2 

26 

7,(59 

Oceania 

5,389 

Africa 

58.042 

Total  all  countries 

609 

1,552,499 

718 

1, 632, 945 

931 

l,966,f:44 

1,005 

2.038,993 

NEWPORT  NEWS,  VA. 


Europe: 

1 
10 

3 

19 
43 

2,571 
23,167 

7,691 
41,111 
113,674 

Belf;ii;m 

Denmark 

7 
1 
7 
19 

17,359 

2,854 

16,295 

57,665 

12 
56 

2 

2 
88 
10 
11 

1 

12 

13 

149 

8 

21,170 

169,836 

6,501 

6,024 

245,399 

27,988 

24,407 

1,1S6 

28, ISO 

24,346 

455,091 

23,842 

13 
100 

21,540 

France 

289, 774 

Greece   . . 

2 

89 
17 
17 

1 

11 

16 

165 

7 

5,309 

Italy 

7 
15 
5 

17,803 
37,943 
11,951 

20 

26 

3 

1 

3 

48,156 

61,337 

7,651 

1,163 

4,984 

249,332 

Netherlands 

45,824 

Norway 

30, 380 

2,800 

Spain 

3 

1 

54 

2 

4,995 

2,312 

154,999 

4,768 

23, 988 

Sweden 

26,632 

United  Kingdom 

Other  Europe ,    

86 

237, 447 

517,236 
19,694 

Total  Europe 

121 

328,944 

215 

548, 952 

364 

1,033,970 

438 

1,232,509 

North  America: 

(  entril  American  States. . 
Mexico 

5 

9 

68 

10,  .5.52 
25,616 
145,956 

4 

12 
97 

8,318 
23, 557 
192, 888 

4 

4 

37 

11,874 

8,249 

62, 730 

3 

7 
79 

11,191 
12,370 

West  Indies 

116,619 

Total  North  America . . . 

82 

182,124 

113 

224,763 

45 

82,853 

89 

140, 180 

SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


Table  IV. — Net  tonnage  of  sail  and  steam  vessels  entered  and  cleared  during  the  years 
July  31,  1914  and  i9i.5— Continued. 

NEWPORT  NEWS,  VA.— Continued. 


1914 

1915 

Foreign  country  sensed. 

Entries. 

Clearances. 

Entries. 

Clearances. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

South  America: 

Argentine 

2 
3 

5,630 
10,754 

1 
1 

2,024 
3,539 

4 
8 
8 
1 
5 

8,023 

20,622 

23,288 

915 

6,736 

8 
25 

7 

1 
8 

18,335 
48,444 

Brazil 

Chile 

18.905 

Colombia 

915 

Other  Soith  America 

2 

4,826 

2 

4,826 

12,576 

Total,  South  America.. 

7 

21,219 

4 

10,389 

26 

59,  .584 

49 

90,175 

Asia 

1 

1,774 

1 

1 

12 

3,495 

1 
5 

2,999 
12,089 

2 

5 

5,916 
12,626 

3,300 

Africa 

18 

46, 162 

37,120 

Total  all  countries 

216 

547,375 

339 

802,646 

454 

1,224,343 

590 

1,515,779 

NORFOLK,  VA. 


Europe: 

Austria-Hungary 

7 

17 
3 
5 

28 

19, 503 
35,. 559 
7,235 
12,779 
68,512 

8 
20 

4 

16 
46 

22,522 
45, 458 
9, 882 
:53, 853 
117,191 

BelErium. 

1 
8 

25 

3 

6 

135 

15 
4 
3 

2,201 
12,437 
68.008 

8,914 
14,6.39 
363,398 
43,320 
10,  .384 

7,337 

2 

24 

38 

2 

9 

168 

18 

5 

7 

3  551 

Denmark 

33  112 

France 

100  623 

3,814 

Greece 

21,401 

Italy 

27 
16 

80,634 
36,885 

80 
29 

229, 466 
76, 201 

460, 807 

Netherlands 

38,  722 

Norway 

10, 467 

Portugal 

1 

2,071 

12,912 

Russia 

1 
8 
3 
71 
3 

3,951 

21,8.^3 

6,683 

190,306 

7,974 

Spain 

5 

2 

36 

2 

12, 19.3 
4,642 

96,631 
5,104 

12 
6 

84 
8 

25, 103 

9,021 

207,089 

13,455 

IS 
11 
89 
5 

36  747 

Sweden 

17,477 

United  Kingdom 

Other  Europe 

223, 891 
4,011 

Total  Europe 

149 

381,748 

289 

765,340 

310 

785,216 

396 

967, 535 

North  America: 

Central  American  States.. 
Mexico 

4 

12 
51 

2 

9,090 

27,  739 

100, 368 

2,046 

21 
13 
71 
4 

48,387 

30,310 

113,742 

2,715 

6 
9 
62 
3 

22, 904 

22, 438 

96, 777 

4,514 

26 
13 

87 

1 

69,823 
29,447 

Wet  Indie  < 

131  063 

Other  North  America 

1,076 

Total  North  America... 

69 

139, 243 

109 

195, 154 

80 

146,633 

127 

231,409 

South  America: 

Argentina 

11 

24 

5 

27,307 
68, 159 
19,542 

8 
12 

7 

19,627 
39, 179 
26,265 

14 
26 
15 

1 
3 

35, 120 
43.432 
46,222 

2,389 
8, 219 

23 

59 
11 

1 
22 

53,359 
98,220 
29  699 

Bra  il 

Chile 

Colombia 

2,389 

Other  South  America 

8 

20, 846 

9 

20, 125 

40,075 

Total  South  America... 

48 

135, 854 

36 

105, 196 

59 

135,382 

116 

223. 742 

Asia 

3 

11,862 

3 

4 
18 

11,862 
12,410 
46,095 

4 

5,342 

6 

7 
28 

13  746 

Oceania 

24  010 

17 

40,594 

23 

49,975 

58, 662 

Total  all  countries 

286 

709, 301 

459 

1,136,057 

476 

1, 122, 548 

680 

1,519,104 

SHIPPIXG  BOARD,  NAVAL  AUXILIAKV,  AXD  MERCHANT  MARINE.         89 


Table  IV. — Net  tonnage  of  sail  and  steam  vessels  entered  and  cleared  during  the  years 
July  .31,  1914  and  1915 — Continued. 

CHARLESTON,  S.  C. 


1914 

1015 

Foreign  country  served. 

Entries. 

Clearances. 

Entries. 

Clearances. 

Num- 
ber. 

N  et  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
l)er. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Europe: 

te.gium 

3 

6,609 

2 

4,050 

Denmark 

2 

2,334 

7 
1 

9  111 

France 

1 
34 

2,451 
76, 250 

842 

Germany 

24 
1 
1 
1 
3 
4 

55,045 
2,891 
2,327 
722 
3,473 
6,987 

Italy 

2 
2 
1 
1 
2 
1 
13 

3  587 

2 

1 
9 
4 

4,902 

722 

10,391 

8,257 

7 
2 
9 

I 
19 

15,481 
1,327 
9,465 

13, 785 
1,914 

39, 721 

3  871 

Portugal 

1,220 
3  713 

Spain 

Sweden 

1  914 

United  Kingdom 

20 

53, 709 

16 

56, 183 

25,676 

Total  Europe 

74 

163,291 

62 

131,678 

47 

84,027 

30 

50,598 

North  America: 

Central  American  States.. 

Mexico 

West  Indies 

4 

1 

31 

2,148 
5,635 
25,825 

4 

1 

29 

2,148 

5,635 

23,405 

3 

1 

13 

4,328 
1,461 
7,524 

3 

1 
16 

4,804 
1,461 
9  279 

Total  North  America... 

36 

33,608 

34 

31,188 

17 

13,313 

20 

15,544 

South  America: 

Brazil 

2 

8 
4 
2 

4,765 
26,426 
3,171 
6,662 

Chile 

Colombia 

3 
3 

8,045 
2,431 

3 

9,108 

1 

2,998 

Other  South  America 

1 

1  462 

Total  South  America... 
Africa 

16 

1 

40,024 
2,447 

6 

10,476 

3 

1 

9,108 
1,878 

2 

4,460 

Total  all  countries 

127 

239,370 

92 

173, 342 

68 

108,326 

62 

70,602 

SAVANNAH,  GA. 


Europe: 

l!el  'ium 

3 

4, 038 

5 

3 

26 

83 

11,089 

5,402 

56,031 

206,490 

1 

r>enniarlc 

6 
3 
4 
2 
11 
12 
6 

9, 463 
5,  .580 
10,927 
4,554 
20,8.36 
23.  .539 
9;  459 
2,997 

32 
8 
5 

48  980 

France 

10 
55 

20.015 
132; 902 

18,503 
13,436 

Germany 

Greece 

Italy 

1 
13 

2,726 
33,311 

1 

18 

2,726 
45,836 

9 

IS 
4 
2 

2''  877 

Netherlands. . . . 

39  311 

Norvrav 

5  951 

Portup,al 

3 

3,162 

1 
1 
13 

851 

1,573 

29,319 

3'  125 

Russia 

Spain 

10 

19, 492 

9 
10 

88 
2 

17,288 

1.5,253 

174,.'^05 

2, 765 

16 

30 

79 

1 

31  282 

Swe  len 

37  431 

United  Kingdom 

Other  Europe 

24 

59, 457 

42 

99, 274 

166,309 
1  137 

Total  Europe 

119 

275, 103 

193 

458,591 

1.55 

290, 866 

204 

388,342 

North  .^  mcrioa: 

Central  American  States . 

1 

1 

12 

59 

1,  .526 

10,  .360 

Mexico 1 

2 

7 

5,315 
9,077 

2 
5 

2,812 
8,612 

West  Indies 

11 

15,402 

Total  North  America... 

9 

14, 392 

7 

11,424 

14 

11,945 

11 

1.5,402 

South  I  merica: 

Argentina 

6 
5 
6 
6 

12,688 
10.949 
16;  777 
6,717 

2 

3,078 

Bra  il 

1 
4 
2 

1,660 
11, 103 
1,999 

1 
1 

1  660 

(hile 

1 
2 

2,759 
4,756 

5  323 

Other  South  A.  merica 

Total  South  America... 

23 

47. 131 

5 

10,593 

7 

14, 762 

2 

6,983 

Asia 

1 

1 
8 

3, 189 
2,874 
17,347 

5 

14, 578 

1 

1 

16 

2, 875 

669 

24, 143 

1 

2,610 

Oceania 

Africa 

3 

6, 519 

3 

4,920 

Total  all  eoantries 

161 

.300,036 

213 

501, 705 

194 

351,260 

221 

418,257 

90         SHIPPIXG  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


Table  IV. — Net  tonnage  of  sail  and  steam  vessels  entered  and  cleared  during  the  years 
July  31,  1914  a7id  1915— Cor\tim\ed. 

FERNANDINA,  FLA. 


1914 

1915 

Foreign  country  served. 

Entries. 

Clearances. 

Entries. 

Clearances. 

Num- 
bsr. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Europe: 

Belgium 

1 

1 
1 

1,797 

2,284 

554 

1 

1,797 

Spain ..'. 

2 
1 
1 

2,248 

599 

1,797 

1 

299 

United  Kingdom    .  . 

4 

12, 119 

7 

16, 754 

5 

6,441 

1 

299 

North  America: 

2 

18 

4,196 
21, 868 

1 

4 
1 

1,021 

1,245 

400 

1 
2 

1,021 

i 

1 

299 
544 

728 

1 

Total  North  America... 

20 

26,064 

6 

2,  666 

2 

843 

3 

1,749 

South  America: 

1 

990 

1 

1 

699 

1 

271 

1 

Total  South  America.. . 

1 

699 

1 

990 

1 

271 

Africa 

4 

6,508 

1 

711 

4 

3,968 

2 

2,107 

Total  all  countries 

32 

50,025 

13 

10, 808 

7 

5,082 

6 

4,155 

JACKSONVILLE,  FLA. 


Europe: 

1 
7 

1,174 
15, 993 

1 
1 

1,174 
2,193 

Germany 

Netherlands 

3 

3,518 

1 

1,415 

Norway 

1 
1 

2,518 
267 

3 
3 

6,190 
8,019 

1 
2 

1,939 
3,410 

United  Kingdom  .. 

3 

7,485 

14 

31,376 

4 

6,152 

6 

8,867 

4 

8,900 

North  America: 

Central  American  States  . 
Mexico 

1 
3 
27 

720 

5,639 

20,456 

6 
3 
14 

5,514 
6,068 
13, 128 

1 
2 
5 
3 

1,400 
3,278 
3,621 
2,265 

2 
2 

4 

1,709 
3,076 
3,521 

We^t  Indie  ^ 

Other  North  America 

Total  North  America. . . 

31 

26, 815 

23 

24,710 

11 

10,564 

8 

8,306 

South  America: 

1 
2 

1 
2 

2,604 
4,312 
2,734 
2,816 

1 

2,604 

Brazil 

1 

1,408 

ChUe 

Other  South  America 

3 

3,400 

i 

2,135 

Total  South  America.. . 

6 

12,466 

1 

2,604 

4 

4,808 

1 

2,135 

Africa 

1 

267 

1 

1,556 

1 

1  556 

Total  all  countries 

52 

70,924 

28 

33,466 

22 

25,795 

14 

20,897 

SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MEECHANT  MAEINE.         91 

Table  IV. — Net  tonnage  of  sail  and  steam  vessels  entered  and  cleared  during  the  years 
July  31,  19 U  and  1915 — Continued. 

KEY  WEST,  FLA. 


1914 

1915 

Foreign  country  served. 

Entries. 

Clearances. 

Entries. 

Clearances. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Europe: 

]  ranee 

2 

1 
1 

5,099 
2,042 
1,758 

4 
1 

6,511 
2,522 

2 

2,529 

i 

1 

2,042 

Italv 

538 

Sweden 

1 

2,121 

United  Kingdom 

4 

9,725 

Other  Europe 

2 

4,121 

Total  Europe 

5 

9,033 

3 

4,650 

8 

18,624 

4 

6,701 

North  America: 

Central  American  States. . 
Mexico 

9 

1,463 

2 

3 

579 

141 

3,209 

568, 210 

8 

4 

402 

5,408 

8,244 
388,541 

3 
3 

408 

3,695 
4,896 

582 

570, 218 

397,903 

Total  North  America . . . 

591 

571, 681 

584 

571, 560 

414 

402, 193 

414 

406,494 

Africa 

1 

1,983 

Total  all  countries 

596 

580, 714 

587 

576,210 

423 

422,800 

418 

413,195 

TAMPA  AND   PORT  TAMPA,  FLA. 


Europe: 

2 
4 
3 
5 
4 
1 
1 
3 

7,665 
8,538 
8,963 
13,502 
12,262 
1,692 
1,939 
6,243 

4 

10 
3 
3 
1 

8,747 
18,637 
9,706 
7,942 
4,105 

Italy 

3 

1 

8,555 
2,575 

2 
3 
1 

5 

3,499 
5,681 
1,.564 
17, 737 

Spain 

4 

8,669 

5 

9,134 

United  Kingdom 

18 

1 

57,922 
1,425 

5 

11,985 

1 

2,680 

Total  Europe 

42 

120, 151 

32 

77,618 

13 

31,784 

6 

11,814 

North  America: 

Central  American  States. 
Mexico 

3 

48 
53 

7,005 
81,200 
52,641 

1 
52 
40 

59 
76,237 
26, 198 

1 

23 

24 

59 
10,950 
15, 191 

1 
22 
20 

59 
13,865 

West  Indies    . .  . 

7,799 

Total  North  America... 

104 

140,846 

93 

102,494 

48 

26,200 

43 

21,723 

South  America: 

4 
6 

1 

10,300 
16, 734 
2,512 

1 

2,193 

1 

2,345 

11 

29,546 

1 

2,193 

1 

2,345 

Asia 

1 
3 

2,267 
7,709 

11 

21,480 

2 



3,504 

Total  all  coimtries 

168 

312,023 

130 

192, 281 

64 

63,833 

49 

33,537 

92         PHIPriNG  BOARD,  NAVAL   A  C  X  I  I.I.Mt  V,  AND  MERCHANT  MARINK. 


Table  IV. — Net  tonnage  of  sail  and  steam  vessels  entered  and  cleared  during  the  years 
July  31,  1914  and  1915— Cor.thmed. 

PENSAOOLA,  FI.A. 


1914 

1915 

Foreign  country  sorved. 

Entries. 

Clearances. 

Entries. 

Clearances. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Nun:- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Europe: 

JJel'vium 

4 

8, 135 

2 

4 
15 
15 
22 
11 

1 
13 

1 
33 

5,404 
6,458 
35.358 
38,470 
46, 026 
24,803 
658 
20, 713 
2, 737 
74, 120 

Denmark 

3 
2 

1 
10 
1 
1 
4 

4,163 
4,  783 
2.357 
l'i;401 
9-1 
1,149 
8,151 

5 
4 

6, 255 

Fran?e 

4 
20 
12 
3 
2 
5 

7,086 

42, 049 

26, 399 

5,339 

1,823 

10,330 

8,001 

GGrmany 

Italy  . 

13 

27  492 

Netherlands 

Portu^'al . . 

Spain 

SweJen 

3 

3,191 

United  Kingdom 

25 

50,139 

24 

38, 892 

38 

81,372 

Total  Europe 

75 

151,300 

117 

254, 747 

46 

81,820 

63 

126,311 

North  J*  merica: 

(  entral  American  .States  . 
Mexico 

11 
4 
54 

21,365 

6,143 

55,494 

10 
1 

43 

13,191 

1,261 

25,310 

5 

7,811 

2 

2,197 

19 

12,583 

18 

12, sis 

Total  Xorth  America. . 

69 

83,002 

57 

39, 768 

24 

20,394 

20 

14,515 

South  A  merica: 

14 

29 

2 

8 

27,245 

49. 845 

6,030 

12. 074 

21 
9 
2 
9 

41,814 
15, 137 
4,  .345 
11,261 

3 
3 
1 

6.311 
6,071 
2,759 

7 
2 

10  479 

Bra  il 

Chile 

6,398 

6 

11,010 

Total  South  America... 

53 

95, 194 

41 

72,557 

7 

15,141 

15 

27,  SS7 

Asia 

1 

1 
20 

3,177 

2, 914 
36, 486 

3 

1 
IS 

9,468 

'■.  914 

28,525 

1 
1 

4 

2,959 
2,707 

Oceania 

Africa 

4 

6,648 

8,762 

Total  all  countries 

219 

372,073 

237 

407.979 

81 

124,003 

104 

183, 141 

MOBILE,  ALA. 


Europe: 

Belgium 

3 

6,733 

8 

17,836 

1 

1 

Denmark 

2 

3,192 

6 
2 

8,618 

France. 

3 

11 

1 

6 

6,909 
27, 705 

2,444 
13, 441 

7 
19 

5 
11 

19,568 
47, 531 
10, 851 
28,241 

1,947 

Germany .... 

Italy. 

1 

3 

538 
4,231 
4,167 

3 

1 

3,583 

Netherlands 

2,006 

Norway 

Portugal 

3 
12 

3,456 
25,094 

1 
10 

1,164 
16, 843 

Spain 

10 

1 

33 

15,353 

856 

66,646 

9 
1 

40 

14, 232 

Sweden 

529 

United  Kingdom 

27 

81, 717 

45 

120, 213 

75,707 

Total  Europe 

66 

167, 499 

106 

262,247 

51 

94,9S3 

62 

106, 622 

North  Am-^rica: 

Central  American  States. . 
Mexico 

224 

48 
265 

143, 554 

65,913 

215,612 

212 
34 
257 

130, 786 

44, 4.58 

206, 393 

194 
44 
161 

112,815 
53, 202 
154,544 

190 
32 
184 

110, 146 
35, 001 

West  TnrliRs  . 

160, 269 

Total  North  America... 

537 

425, 079 

503 

381,637 

399 

320, 561 

406 

30.5.416 

South  America: 
*    Argentina 

13 

20 

1 

1 

7 

29, 745 

33,478 

1,754 

208 

14,386 

17 
9 

33,907 
13,952 

1 
3 

1,970 
3,308 

12 
5 

1 
1 
4 

15,750 

Brazil 

5,644 

Chile 

2,674 

Colombia 

2 
12 

1,690 
21,738 



1 
3 

452 
2,706 

452 

Other  South  America 

6,267 

Total  South  America. . . 

42 

79,571 

40 

71,287 

8 

8,436 

23 

30, 787 

Oceania 

1                       1            1 

3 

5 

8,016 
6,779 

Africa 

10 

18,501 

6 

9,444 

1 

1,8.35 

Total  all  countries 

655 

690,650 

655 

724,615 

466 

438, 775 

492 

444,660 

SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         93 


Table  IV. — Net  tonnage  of  sail  and  steam  vessels  entered  and  cleared  during  the  years 
July  31,  1914  and  1915 — Continued. 

NEW  ORLEANS,  LA. 


1914 

1915 

Foreign  country  served. 

Entries. 

Clearances. 

Entries. 

Clearances. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Europe: 

15 
17 
4 
31 
36 

34,687 

53,362 

10, 790 

108,777 

137, 749 

16 
47 
9 
38 
53 

49,844 
136,544 

18,441 
119, 179 
178, 146 

3 

2 

8 

50 

4,785 

5,667 

13,082 

139,916 

1 
25 
105 

1 

2 
76 
30 

7 

8 
24 
21 

5 
235 

4 

1,637 

41,893 

292,982 

2,139 

5, 572 

Italy 

24 
32 

2 
11 
25 

3 

64,872 
109, 758 

2,818 
11,337 
65,111 

6,665 

33 

55 

4 

15 

25 

6 

2 

128 

89,937 
171,812 
9,571 
17,319 
64,988 
11,077 
4,180 
467,771 

69 

23 
6 
4 

24 

7 

3 

276 

12 

172,433 
70,829 
13,096 
5,979 
61,222 
14,894 
6,171 
834,5.57 
26, 705 

19U,  690 

Netherlands 

84,686 

15,8^9 

Portugal 

8,289 

Russia 

58,463 

Spain 

39,512 

10, 893 

United  Kingdom 

137 

509,755 

741,626 
15,725 

Total  Europe 

337 

1,115,681 

431 

1,338,809 

487 

1,369,336 

544 

1,509,996 

North  America: 

Central  American  States.. 
Mexico 

550 
306 
191 

734,909 
420,403 
332,952 

552 
283 
168 

731,768 
378,636 
286,773 

474 

249 

183 

2 

714,816 

329,970 

301, 180 

3,788 

468 
242 
162 

704, 761 
310,482 

West  Indies 

266,037 

Total  North  America... 

1,047 

1,488,264 

1,003 

1,397,177 

908 

1,349,754 

872 

1,281,280 

South  America: 

Argentina 

21 

49 

4 

1 

7 

63,565 

132,275 

11,151 

1,059 

17,332 

16 
6 
2 

1 
4 

48,387 

16,631 

4,781 

1,059 

10,945 

10 

43 

11 

4 

7 

29,281 
95,024 
24,471 
5,719 
18,242 

12 

8 
1 
3 
1 

32,868 

Bra.il 

13, 105 

Chile 

3,163 

Colombia 

4,090 

Other  South  America 

1,113 

Total  South  America... 

82 

225,382 

29 

81,803 

75 

172,737 

25 

54,339 

Asia 

2 

1 
31 

7,0.36 

2,798 

70,808 

7 

1 

10 

22,018 

Oceania 

1 
5 

1,025 
13,486 

3,006 

Africa 

1 

3,124 

24,833 

Total  all  countries 

1,472 

2,843,838 

1,464 

2,820,913 

1,504 

2,972,469 

1,459 

2,895,472 

PORT  ARTHUR,  TEX. 


Europe: 

Belgium. .. 

7 

20,288 

13 
1 

5 
7 
1 
15 
3 

34,670 
2,491 

12,588 

16, 090 
2,575 

38,239 
9,238 

Denmark 

2 
4 
1 
6 
4 
2 
1 
1 

4, 416 
8,194 
3,202 
17,303 
10, 724 
2,086 
1,035 
2,664 

1 
4 

1,279 

France 

4 
5 

1 
12 

11,436 

12,490 

2,575 

31,670 

9,907 

Germany. . . 

Italy...: 

8 
3 
4 
1 
2 
2 
95 
1 

22,012 

Netherlands 

9,011 

Norway 

9,199 

Portugal 

1,035 

Spain 

4,231 

Sweden 

2,357 

United  Kingdom 

Other  Europe 

65 
2 

189,559 
6,153 

47 
1 

133,799 
2,656 

109 
1 

343.298 
2,869 

304,775 
4,119 

Total  Europe 

96 

274, 171 

93 

2.52,346 

131 

395, 791 

121 

307,925 

North  America: 

CentralAmerican  States 

1 

26 

7 

4,068 
52,813 
11,545 

Mexico.. 

22 

7 

44,911 
10,239 

22 
5 

40,470 
7,130 

22 
10 

43,005 

West  Indies 

11,456 

Total  North  America... 

34 

68,426 

29 

55,150 

27 

47,600 

32 

54,521 

32910—16 7 


94         SHIPPING  BOARD,  XAVAL  AUX  li.IAKV,  AXD  MERCHANT  MARINE. 


Table  IV. — Net  tonnage  of  sail  and  steam  vessels  entered  and  cleared  during  the  years 
July  31,  1914  and  i9i5— Continued. 

PORT  ARTHUR,  TEX.— Continued. 


1914 

1915 

Foreign  country  served. 

Entries. 

Clearances. 

Entries. 

Clearances. 

Num- 
ber. 

Not  ton- 
nage. 

Num 
her. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Nat  ton- 
nage. 

South  America: 

6 
4 

13,826 

8,887 

2 

4,712 

1 

I 

1 

2,111 

16, 197 

237 

2,767 

5 
3 

12, 898 

Brazil 

5,545 



Other  South  America 

1 

589 

2 

4,289 

1 

2,141 

Total  South  America. . . 

11 

23,302 

4 

9,001 

6 

21,312 

9 

20,584 

Asia        

1 
2 
5 

2,750 
5,606 
11,429 

3 

7,599 

3 

8,963 

Oceania 

i 

6 

2,831 
15,016 

Africa 

3 

13,059 

5 

17.413 

Total  all  countries 

148 

383,746 

134 

336,282 

170 

485,361 

170 

469,406 

GALVESTON.  TEX. 


Europe: 

Austria-Hungary 

23 
73 

1 

16 
22 

6 

2,321 
48,534 

8,428 

65,027 

232,640 

2,358 
49,220 
60,643 
14,025 

10 

2 

12 

31 

1 

10 
13 
8 

24,249 
4,599 
34,279 
102,258 
2,358 
30.497 
40,073 
18,406 

1 

8 

20 

2,679 
11,577 
49, 198 

1 

19 

57 

4 

12 

58 

9 

4 

1 

2.679 

29,664 

146,. 584 

7,133 

Denmark 

France 

Germany 

G  reece 

4 
34 
9 
4 
3 

9.591 
83.513 
19,035 
8,529 
4,801 

43,017 

Italy 

Netherlands 

Norway 

151,204 

23. 579 

5,361 

1,117 

1 
13 

2,913 
35,403 

1 
26 

2,9i3 
76,490 

Spain 

21 

12 

211 

16 

53  607 

21,380 

578,448 

37  850 

45 

28 

172 

6 

112,552 
44,384 

United  Kingdom 

95 

2 

309.294 
5,027 

120 

373.436 

495  117 

Other  Europe 

13,635 

Total  Europe 

198 

609,356 

313 

936,035 

343 

880,208 

416 

1,076,026 

North  America: 

Central  American  States . 
Mexico 

96 
164 
80 

83,410 
317,655 
153,953 

92 
141 
47 

73,701 
275,999 
68,639 

68 
184 
51 

73,923 

321,940 

85,671 

53 
158 
37 

45,202 

279,295 

40,925 

Total  North  America... 

340 

555,018 

280 

418  339 

302 

481.534 

248 

365,422 

South  America: 

Argentina 

27 
29 

63,615 
77, 102 

6 

4 

12,435 

7,582 

8 

19 

1 

5 

19,424 

45,  .542 

1,830 

12,125 

Brazil 

4 

78,425 

Chile 

Other  South  America. . . . 

2 

3,543 

1 

2 

4.287 

Total  South  America.. . 

58 

144.260 

10 

20,017 

33 

78,921 

6 

82.712 

Asia 

1 

2,337 

2 

5,599 

3 

5 
34 

7,756 
13,505 
72,490 

9 
2 
7 

28,043 
4.812 
15,9.55 

Oceania 

Africa 

6 

13,328 

1 

2,847 

Total  all  countries 

603 

1,324,299 

606 

1,382.837 

721 

1,534,4)4 

688 

1,572,970 

PORT  ARANSAS,  TEX. 


Europe: 

United  Kingdom 

2 

6,025 

4 

9,845 

North  America: 

Central  American  States . 

■? 

3,820 
43,496 

18 

42,553 

2 

3,822 

1 

1  911 

Total  North  America... 

21 

47, 316 

18 

42,553 

2 

3,822 

1 

1,911 

Total  all  countries 

23 

53,341 

22 

52, 398 

2 

3,822 

1 

1,911 

SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.  95 


Table  IV. — Net  tonnage  of  sail  and  steam  vessels  entered  and  cleared  during  the  years 
Julij  31,  1914  and  i9i5— Continued. 


SABINE, 

TEX. 

1914 

1915 

Foreign  country  served. 

Entries. 

Clearances. 

Entries. 

Clearances. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Europe: 
Bel<'liini 

1 

3 
3 
1 

3 

1 
2 
5 

1,637 
8,261 
8,571 
2,154 
4,912 
2,071 
3,5f.0 
14,843 

3 
1 

1 
2 

8,2G1 
2,847 
2,154 
4,945 



Italy                

2 
2 

5,058 
4,129 

3 

6,093 

United  Kini;dom 

7 

20,073 

18 
3 

64, 120 
8,313 

19 
1 

68,883 
3,509 

Total  Europe        

14 

38,280 

19 

46.009 

24 

78, 526 

24 

81,579 

North  America: 

Central  American  States 

1 

26 
14 

91 

27 
4 

73,474 
3,3t;8 

31 

1 

74,490 
291 

26 
17 

77,680 
9,255 

84,600 

West  Indies 

7,077 

Total  North  America... 

31 

76,842 

32 

74,781 

43 

86,935 

41 

91,768 

South  America: 

Argentina 

2 
1 

3,426 
1,555 

2 

2 

3,426 
2,498 

2 

1 

1,080 
1,146 

' 

6,844 

Total  South  America... 

3 

4,981 

4 

5,924 

3 

2,226 

4 

6,844 

Asia 

1 

1 

3,301 

1 

3,032 

Oceania 

1 
1 

2,236 
2,484 

1 
1 

2,236 
2,484 

Africa 

1 

3,032 

Total  all  countries 

50 

124, 823 

57 

131,434 

72 

174,020 

70 

183,223 

SAN  DIEGO,  CAL. 


Europe: 

Germany 

1 
1 

1,979 
2,232 

i 

United  Kingdom 

1 

2,773 

1 

2,773 

Total  Europe 

1 

2,773 

^ 

2,773 

2 

4,211 



North  America: 

Central  American  States. . 

3 

57 

8,507 
21,283 

2 
53 

5,037 
19,304 

Me.xico 

70 

64,696 

61 

18,945 

Total  North  America . . . 

70 

64,696 

61 

18,945 

60 

29,790 

55 

24,341 

Asia 

2 

5,936 

2 

5,936 

1         .1         .       _ 

Oceania 

1 

1,888 

1 

1,888 

Total  all  countries 

73 

73,405 

64 

27,654 

63 

35,889 

56 

26,229 

SAN  PEDRO,  CAL. 


Europe: 

Beleium 

4 

13,293 

2 

6,639 

3 
2 
1 

11,955 
5,795 
1,969 

1 
1 
1 

3,826 
3,121 

Denmark 

France 

1,969 

Germany 

1 
1 

3,010 
2,159 

1 

3,010 

United  Kingdom 

3 

10,833 

3 

12,672 



Total  Europe 

6 

18,462 

3 

9,649 

9 

30,552 

6 

21,588 

North  America: 

Central  American  States . 
Mexico 

12 
7 

36,665 
17,892 

11 
6 

34,071 
10,593 

2 
6 

9,255 
3,133 

3 
5 

9,929 
1,185 

Total  North  America... 

19 

54,557 

17 

44,664 

8 

12,388 

8 

11,114 

=— ; .      ■            = 

96         SHIPPING  BOARD,  NAVAl.  AUXILIARY,  AND  MERCHANT  MARINE. 


Table  IV. — Net  tonnage  of  sail  and  steam  vessels  entered  and  cleared  during  the  years 
July  31,  1914  and  /9i5— Continued. 

SAN  PEDRO,  CAL.— Continued. 


1914 

1915 

Foreign  country  served. 

I^ntries. 

Clearances. 

Entries. 

Clearances... 

Num- 
ber. 

Net  toQ- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

South  America: 

Argentina 

1 

1,130 

1 

1 
6 

1,135 

Brazil 

1 
5 
6 

3,788 
20,800 
11,063 

3,788 

Chile 

3 

11,701 

2 

8,540 

20,507 
11,063 

All  other  South  America. 

Total  South  America.. . 

4 

12,831 

2 

8,540 

12 

35,651 

14 

36,493 

Asia 

3 
3 

8.257 
7,555 

7 
2 

19, 139 
3,595 

5 

1 

12,411 

Oceania 

2 

4,341 

2,674 

Total  all  countries 

35 

101,662 

24 

67, 194 

38 

101,325 

34 

84,280 

SAN  FRANCISCO,  CAL. 


Europe: 

7 
1 
2 
13 
1 
5 


19, 767 
2,895 
6,627 

36,226 

326 

9,351 

3 

7,637 

3 
1 
2 
2 
3 
2 
2 
35 
2 

7,388 
2,232 
3,878 
3,801 
7,281 
3,114 
2,391 
93, 706 
4,488 

1 
6 
2 

2,729 

Denmark 

17,684 

r  ranee 

2 
8 
1 

6,627 

22, 679 

326 

4,826 

Italv 

1 

1,929 

1 
58 
3 

930 

United  Kingdom 

16 

47,379 

19 

52,575 

160, 500 
6,720 

Total  Europe 

45 

122, 571 

33 

89,844 

62 

128,279 

72 

195,317 

North  America: 

Central  American  States.. 

57 
49 

1 

135, 107 

168, 764 

563 

60 
45 

147,462 
148,093 

63 

21 

2 

127, 518 
19,782 
5,712 

48 

20 

3 

113,418 
15,580 
7,745 

Total  North  America... 

107 

304,434. 

105 

295, 555 

76 

153,012 

71 

136,743 

South  America: 

1 
53 
13 

2,826 
189, 913 
26,509 

2 
23 
10 

2,730 
61,951 
18, 785 

CMle           

48 
22 

168, 716 
52,097 

26 
8 

72, 618 
13,584 

Other  South  America 

Total  South  America.. . 

70 

220, 813 

67 

219,248 

35 

83,466 

34 

86,202 

Asia 

122 

68 
1 

492,306 

182,911 

3,803 

107 

65 

1 

442,990 

175,925 

3,616 

113 
83 
2 

460,413 

201,053 

1,946 

104 

75 

1 

425, 676 

Oceania 

185, 494 

614 

Total  all  countries 

413 

1,326,898 

378 

1,227,178 

361 

1,028,769 

357 

1,030,046 

ASTORIA,  OREO. 


Europe: 

Belgium  

2 

5,476 

France 

1 

2,723 

1 

2,723 

1 
6 

4,437 
11,  815 

United  Kingdom 

All  other  Europe 

14 

32,209 

6 

11,568 

21 

1 

44,809 
1,996 

6 

16,252 

16 

37,685 

6 

14,291 

23 

49,528 

North  America: 

5 

10,578 

2 

2,880 

2 

1 

4,619 
1,789 

West  Indies 

6 

10,578 

2 

2,880 

3 

6,408 

I-. 

SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.         97 


Table  IV. — Net  tonnage  of  sail  and  steam  vessels  entered  and  cleared  during  the  years 
July  SI,  1914  and  1915 — Continued. 

ASTORIA,  OREG.— Continued. 


1914 

1915 

Foreign  country  served. 

Entries. 

Clearances. 

Entries. 

Clearances. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
oer. 

Net  ton- 
na};e. 

South  America: 

1 

2,826 

Brazil 

1 
10 
9 

2,332 
18,716 
10,263 

Chile 

9 

7 

11,835 
7,549 

13, 

8 

20,053 
13,489 

1 
5 

496 

All  other  South  America. 

6,539 

Total  South  America... 

20 

31,311 

17 

22, 210 

21 

33,542 

6 

7,036 

Asia 

10 
9 

29,330 
16,720 

13 
9 
2 

36,955 
16,857 
2,163 

8 
11 
4 

23,362 

23,655 

6,184 

7 
9 
3 

22,880 

Oceania 

17,317 

Africa 

5,372 

Total  al  1  countries 

50 

104, 191 

59 

118,750 

53 

107, 442 

48 

102, 132 

PORTLAND,  OREG. 


Europe: 

1 

5,993 

1 
3 

157 
7,366 

1 

157 

1 

2,057 

Italy    .        '     

1 
7 

2,707 
13,293 

United  Kingdom 

2 

4,425 

12 

27,226 

27 

53,618 

• 

Total  Europe 

6 

11,948 

14 

35,276 

9 

16,157 

27 

.w.eis 

North  America: 

1 
3 

3.209 
6,225 

1 
1 
1 

3,^09 
2,115 
3,669 

1 

2,597 

4 

9,434 

3 

8,993 

1 

2.597 

South  America: 

Chile    

5 
3 

6,247 
7,778 

9 
2 

9,619 
5,985 

9 
3 

16,811 
4,746 

3 
3 

6,076 

Other  South  America 

4,859 

Total  South  America... 

8 

14,025 

11 

15,604 

12 

21,557 

6 

10,935 

Asia 

7 
3 
3 

21,203^ 
6,361 
5,133 

12 
4 
3 

37,698 
8,958 
6,691 

4 
4 

1 

12,264 
2,9.35 
1,496 

8 
10 
2 

23,121 

13,036 

Africa 

2,570 

Total  all  countries 

31 

68,104 

47 

113,220 

30 

54,409 

54 

105,877 

PORT  T0WN8END,  WASH. 


Europe: 

1 

2 

1 

12 

2,997 

6, 153 

4,170 

49,970 

3,791 

3 

1 
6 

10,996 

4,170 

22,037 

United  Kingdom 

14 

49, 113 

13 

36,851 

Total  Europe 

16 

63,290 

10 

37,203 

15 

52,904 

13 

36,851 

North  Europe 

1 
10 

2,724 

16,596 

2 
11 

6,613 
19,197 

1,335 
430 

1 
1 

Central  American  States.. 
Mexico 

523 
513 

Total  North  America. . . 

11 

19,320 

13 

24,810 

1,765 

2 

1,036 

South  America: 

Chile 

10 
3 

13,495 

5,784 

6 
3 

8,813 
7,361 

11 

21,823 
1.188 

7 
2 

13,44S 

Othei-  South  America 

2.376 

Total  South  America. . . 

13 

19, 279 

9 



16,174 

12 

23,011 

9 

15,824 

98         SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Table  IV. — Net  tonnage  of  sail  and  steam  vessels  entered  and  cleared  during  the  years 
July  31,  1914  and  /9i5— Continued. 

PORT  TOWNSEND,  WASH.— Continued. 


1914 

1915 

Foieign  country  served. 

Entries. 

Clearances. 

Entries. 

Clearances. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Num- 
ber. 

Net  ton- 
nage. 

Asia       

43 
17 

1 

163,769 
67,561 
2,993 

44 

24 

2 

166, 520 
68, 603 
5,805 

47 
19 

170,866 
38,095 

30 

27 

2 

107,619 

55,586 

2,S70 

Total  all  countries 

101 

336, 212 

102 

319,015 

95 

286,641 

83 

219,786 

SEATTLE,  was: 


Europe: 

1 

2 

7 

3,499 

6,937 

33,511 

1 
1 
8 

3,736 

1,930 

35,026 

2 

6,454 

2 
5 

7,331 
22, 225 

United  Kingdom 

9 

30,  ees 

Total  Europe 

7 

29,556 

10 

43,947 

10 

40,692 

11 

37,119 

North  America: 

1 

1,806 

1 
1 

3,197 

2 

9,637 

1 

2.824 

483 

Total  -  orth  America. . . 

2 

9,637 

1 

2.824 

1 

1.806 

2 

3,680 

South  America: 

1 
1 

752 
1,040 

1 

1 
1 

752 

1.040 

605 

Chile 

1 
1 

1,876 
1,762 

•l 

1 

819 

Otlier  Soutli  Vmerica  . 

3,267 

Total  South  America. . . 

2 

1,792 

3 

2,397 

2 

3,638 

2 

4,086 

Asia  

16 

4 

57,943 
21,358 

20 

7 

91,244 
42,435 

15 
3 

54,969 
21,145 

18 

4 

70,849 

17.227 

Total  all  countries 

31 

120, 286 

41 

182,847 

31 

122,250 

37 

132,961 

TACOMA.  WASn. 


Europe: 

1 

2,224 

1 
2 

1,958 
8,091 

Germany. .    . 

1 

3,654 

Russia 

3 

8 

7,992 

United  Kingdom 

3 

18,000 

3 

12, 270 

17,231 

Total  Europe 

1 

3,654 

6 

28,049 

3 

12, 270 

12 

27,447 

North  America: 

Central  American  States. . 

1 

2,803 

1 
1 

2,803 

2,842 

Total  North  America. . . 

1 

2,803 

2 

5,645 

Bouth  America- 
Argentina.. 

1 
3 

1,-389 
10,148 

""2 

Chile 

6,95i 

Other  South  America. . . . 

1 

2,287 

1 

2.287 

Total  South  America... 

1 

2,287 

1 

2,287 

4 

11,537 

2 

6,951 

Asia 

8 

1 

27, 199 
2,843 

16 
2 

58, 196 
5,645 

11 
1 

38, 619 
2,802 

9 
9 

33,009 

Oceania 

23. 698 

Total  all  countries 

11 

35,983 

25 

94, 177 

20 

68,031 

34 

96,840 

SHIPPING  BOARD,  NAVAL  AUXILIAKY,  AND  MERCHANT  MARINE.         99 

Appendix  C. 


Table  I. — Foreign  commerce  of  the    United  States  ' — Principal  imports   and   exports 
of  domestic  and  foreign  merchandise  for  the  years  ended  July  31, 1914  ond  1915. 

(From  monthly  summaries  of  the  Department  of  Commerce,  Bureau  of  Foreign  and  Domestic  Commerce.  J 


Country  from  which  im- 
ported and  to  which  ex- 
ported. 


Europe: 

Austria-Hungary 

Belgium 

Denmark 

France 

Germany 

Greece 

Italy 

Netherlands 

Norway 

Portugal 

Russia 

Spain 

Sweden 

United  Kmgdom 

All  other  Europe 

Total  Europe 

North  America: 

Central  American  States 

Mexico 

West  Indies 

Other  North  America . . 

Total  North  America. 

South  America: 

Argentina 

Braiil 

Chile 

Colombia 

Other  South  America . . 

Total  South  America. 

Asia 

Oceania 

Africa 

Total  all  countries 


Imports. 


For  the  year  ended  July  31- 


1914 


Value. 


1915 


Value. 


$20, 287, 105 

41,634,197 

3,319,937 

137,981,348 

192,268,339 

3,850,6801 

56,778,318j 

35,669,418 

9,523,9701 

6,033,396; 

20, 805, 776 

24,219,798 

11,613,389 

293,297,268 

36, 685, 268 


893,968,207 


17,918,766 

92,261,831 

156, 680, 305 

2, 727, 500 


269, 588, 402 


48, 869, 466 
104,176,924 
25,319,765' 
16,382,989 
35, 236, 755  i 


S8, 189, 

6,201, 

3,036, 

73,263, 

74,996, 

4,425, 

53,467, 

31,967, 

10,291, 

5, 429, 

1,423, 

18,  795, 

11,434, 

253, 757, 

25, 558, 


582, 238, 925 


21,007,599 

81,130,491 

214,516,017 

1,895,020 


318,549,127 


Increase 
or  de- 
crease. 


097,  769 
432, 660 
283, 339' 
717, 955 
272, 129 
574,905 
310, 963 
701,771 
767, 742 
603, 762 
382,629 
423, 940 
178,731 
540,011 
126,270 


Exports. 


For  the  year  ended  July  31— 


1914 


Value. 


311,729,282 


3,088,833 
11,131,340 
57,835,712 

832, 480 


48, 960, 725 


74,734,666  25,865,200 

98,020,512  6,156,412 

29,969,937  4,650,172 

16,004,106  2,621.117 

42,607,099  7,370,344 


229, 985, 899 


291,800,691 
43,654,352 
19,480,411 


1,748,477,962 


264,336,320  34,350,421 


249,165,129  42,635,562 
55,721,709  12,067,357 
26,845,460  7,365,049 


1, 496, 856, 670  251, 621,292 


$22, 705, 651 
62,544,808 
15,453,434 

160,136,020 

341,777,555 

1,220,993 

73,888,266 

114,931,362 

8,897,713 

5,360,1.58 

30,434,215 

29,370,779 

14,381,080 

597, 246, 044 
10,696,472 


1,489,044,550 


38,897,939 

37,473,741 

96,439,792 

3,483,770 


176,295,242 


1915 


Value. 


$40, 
15,073, 
82,593, 

406,440, 
13,974, 
24, 867, 

194,444, 

135,553, 
41,233, 
5,223, 
54,289, 
39, 949, 
80,734, 

961,728, 
10, 297, 


2, 066, 444, 794 


34,512,570 

35,293,236 

103,125,554 

2,922,565 


175,853,925 


42,988,040 
28,657,810 
17,690,834 
6,666,571 
24,682,550 


120, 685, 805 


111,504,049 
84,023,662 
28,405,223 


2,010,018,531 


35,027,285 
25,928,908 
11,884,834 
6,797,332 
24,429,404 


104,067,763 


121,143,049 
83,315,989 
28, 536, 774 


2,579,362,294 


Increase 
or  de- 
crease. 


664, 817 
471,147 
140,310 
304,397 
802, 994 
646, 619 
556, 555 
621,964 
335,568 
136, 805 
855, 009 
578, 802 
352,983 
482, 627 


577, 400, 244 


4,385,369 

2,  ISO,  505 

6,685,762 

561,205 


441,317 


7,960,755 

2, 728, 902 

5, 806, 000 

130, 761 

263, 146 


16,618,043 


9,639,000 

707,673 

71,551 


569,343,763 


Italic  denotes  decrease. 


1  Exclusive  of  commerce  with  Canada. 


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108     SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


Table  II. — Berth  rates  in  the  foreign  trade  of  the  United  States. 

[From  quotations  published  in  the  Xew  Yor'<  Journal  of  Commerce.] 

FLOUR,i  IN  SACKS  (PER  100  POUNDS). 


From  New  Yor'.c,  N.  Y., 

to-- 

Date. 

United  Kingdom. 

un, 
rp. 

Nether- 
lands, 

Rotter- 
dam. 

Bristol. 

Glasgow. 

,^  „          Liver- 
--^"-          pool. 

London. 

Man-     ^°*^' 
Chester. 

1913. 
Aug.  1   

$0.18 
.18 
.19 
.19 
.18 

.17 
.17 
.15 
,15 
-15 
.15 
.15 
,17 
.17 
.25 
.26 
.30 

.30 
.40 
,40 
.45 
.45 
.45 
.45 

$0.16 
.16 
.18 
.18 
.17 

.17 
.15 
.15 
.15 
.15 
.15 
.13 
.14 
.14 
.23 
.25 
.29 

.29 
.40 
.40 
.40 
.45 
.45 
.45 

$$0. 18 
.18 
.20 
.20 
.20 

.18 
.17 
.17 
.17 
.17 
.17 
.15 
.17 
.17 
.25 
.26 
.30 

.30 
.40 
.40 
.40 
.45 
.45 
.45 

$0.14 
.14 
.15 
.15 
.14 

.14 
.12 
.12 
.12 
.12 
.12 
.10 
.12 
.12 
.35 
.21 
.26 

.26 
.40 
.40 
.40 
.45 
.40 
.40 

$0.16 
.16 
.15 
.15 
.14 

.15 
.13 
.13 
.13 
.13 
.13 
.11 
.13 
.13 
.    .21 
.22 
.27 

.35 
.40 
.40 
.40 
.45 
.45 
.45 

$0. 14         $0. 20 
.14              .20 
.15              .20 
.15              .20 
.14               .20 

.14               .20 
.12              .18 
.12              .18 
.12              .18 
.12              .18 
.12              .18 
.10              .18 
.12              .18 
.12              .18 
.20              .18 
.21               .18 
.26              .18 

.26              .18 
.40              .18 
.40              .18 
.40              .18 
.45               .18 
.45              .18 
.45              .18 

$0.18 

Sept.  2 

.18 

Oct.  2 

.18 

Kov.  I 

.18 

Dec.  1 

.16 

1914. 
Jan. 3 

.15 

Feb.  3 

Mar.2 

.13 
.13 

Apr.  I 

.12 

Mav  1 

.12 

June  1     

.12 

Julv  1  

.10 

Aug.  1 

.12 

fiept.  1 

.12 

Oct  1 

.21 

Kov.  1 

.25 

Dec! 

.33 

1915. 
Jan. 2 

.55 

Feb.l 

.60 

Mar.2 

1.25 

Apr.l 

.80 

Mav  1  

.80 

.65 

Julv  1 

.65 

1 1  ton  of  2,240  pounds  stows  in  space  of  55  cubic  feet. 
LEATHER  (PER  TON).i 


From  New  Yorli,  N.  Y.,  to 

- 

Date. 

United  Kingdom. 

France, 
Havre.'' 

Bel- 
gium, 

Ant- 
werp. 

Nether- 
lands, 
Rotter- 
dam.* 

Bristol. 

Glas- 
gow. 

Hull. 

Liver- 
pool. 

Lon- 
don. 

Man- 
chester. 

1913. 
Aug.  1 

s.    d. 
25    0 
25    0 
25    0 
25    0 
25    0 

25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 

25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 

s.    d. 
30    0 
30    0 
30    0 
30    0 
30    0 

30    0 
30    0 
30    0 
30    0 
30    0 
30    0 
30    0 
30    0 
30    0 
30    0 
30    0 
35    0 

35    0 
35    0 
35    0 
35    0 
35    0 
35    0 
35    0 

s.    d. 
65    0 
65    0 
65    0 
65    0 
65    0 

65    0 
65    0 
65    0 
65    0 
65    0 
65    0 
65    0 
65    0 
65    0 
65    0 
65    0 
65    0 

65    0 
65    0 
65    0 
65    0 
65    0 
65    0 
65    0 

s.    d. 
20    0 
20    0 
20    0 
20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 

s.    d. 
20    0 
20    0 
20    0 
20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
35    0 

35    0 
35    0 
35    0 
35    0 
35    0 
35    0 
35    0 

s.    d. 
20    0 
20    0 
20    0 
20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
30    0 

•30    0 
30    0 
30    0 
30    0 
30    0 
30    0 
30    0 

$0.10 
.10 
.10 
.10 
.10 

.10 
.10 
.10 
.10 
.10 
.10 
.10 
.10 
.10 
.10 
.10 
.10 

.10 
.10 
.10 
.10 
.10 
.10 
.10 

«.    d. 
30    0 
30    0 
30    0 
30    0 
30    0 

30    0 
30    0 
3a    0 
30    0 
30    0 
30    0 
30    0 
30    0 
30    0 
30    0 
30    0 
30    0 

30    0 
30    0 
30    0 
30    0 
30    0 
30    0 
30    0 

$0.45 

Sept.  2 

.45 

Oct.2 

.45 

Nov.  1 

.45 

Dec.  1 

.45 

1914. 
Jan.  3 

.45 

Feb.3 

.45 

Mar.  2 

.45 

Apr.  1 

.45 

Mavl 

.45 

June  1 

.45 

July  1 

.45 

Aug.  1 

.45 

Sept.  1 

.45 

Oct.  1 

.45 

Nov.2 

.45 

Dec.  1 

.45 

1915. 
Jan.  2 

.45 

Feb.  I 

.45 

Mar.2 \ 

.45 

Apr  1 

.45 

Mavl 

.45 

June  1 

.45 

Julyl 

.45 

'1  ton  of  2,240  pounds  stows  in  space  of  120  cubic  feet.       '  Per  cubic  foot.        •  Per  100  pounds. 


SHIPPING  BOARD,  NAVAL  AUXILJAKY,  AND  MERCHANT  MARINE,       109 


Tablk  II. — Berth  rates  in  the  foreign  trade  of  the  United  States — Continued. 
COTTON  1  (PER  100  POUNDS). 


Aug.  1.. 
Sept.  2. 
Oct.  2.. 
Nov.  1., 
Dec.  1.. 


Jan. 3. . 
Feb.  3. 
Mar.  2. 
Apr.  1. 
May  1 . , 
June  1. 
July  1.. 
Aug.  1. 
Sept.  1. 
Oct.  1.. 
Nov.  2. 
Dec.  1. 


Jan. 2 . 
Pell.  1. 
Mar.  2. 
Apr.  1. 
May  1. 
June  1. 
July  1. 


Date. 


1913. 


1914. 


From  New  York,  N.  Y.,  to- 


United  Kingdom. 


I/iverpooI.  Manchester. 


•SO.  2.5 
.25 
.35 
.35 
.30 


.28 
.28 
.28 
.28 
.28 
.28 
.20 
.20 
.20 
.35 
.40 
.60 


.75 
1.00 
1.25 
1.25 
2.00 
1.''5 
1.25 


.75 
1.00 
1.25 
1.25 
2.00 
l.?5 
1.25 


France, 
Havre. 


0.35 
.35 
.45 
.45 
.40 


.35 
.25 
.25 
.25 
.25 
.25 
.25 
.25 
.25 
.45 
.45 
1.00 


1.00 
2.00 
2.00 
2.00 
3.00 
1.50 
1.50 


Belgium, 
Antwerp. 


$0.40 
.40 
.40 
.40 
.40 


.25 
.25 
.25 
.25 
.25 
.25 
.20 
.20 
.20 
.20 
.20 
.20 


.20 
.20 
.20 
.20 
.20 
.20 
.20 


Nether- 
lands, Not- 
terdam. 


(«) 


«0.45 
.45 
.30 
.30 
.30 


.35 
.25 
.25 
.25 
.25 
.25 
.25 
.25 
.25 
.25 
.25 


2.00 
2.50 
2.25 
2.25 
2.25 
2.00 
2.00 


1 1  ton  of  2,240  pounds  stows  in  space  of  130  cubic  feet. 

CHEESE  I  (PER  TON). 


'  No  quotation. 


From  New  York,  N.  Y.,  to 

- 

Date. 

United  Kingdom. 

France, 
Havre.'-' 

Bel- 
gium, 

Ant- 
werp. 

M  ether- 
lands, 
Rotter- 
dam.' 

Bristol. 

Glas- 
gow. 

Hull. 

Liver- 
pool. 

Lon- 
don. 

Man- 
chester. 

1913. 
Aug.  1 

s.    d. 
25    0 
25    0 
25    0 
25    0 
25    0 

25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
(') 

25    0 
25    0 

25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 

*.    d. 
25    0 
25    0 
25    0 
25    0 
25    0 

25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
(') 

25    0 
25    0 

25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 

s.    d. 
22    0 
22    0 
22    0 
22    0 
22    0 

22    0 
22    0 
22    0 
22    0 
22    0 
22    0 
22    0 
22    0 
22    0 
(') 

22    0 
22    0 

22    0 
22    0 
22    0 
22    0 
22    0 
22    0 
22    0 

s.    d. 
26    0 
26    0 
26    0 
26    0 
26    0 

26    0 
26    0 
26    0 
26    0 
26    0 
26    0 
26    0 
26    0 
26    0 
(.') 

26    0 
26    0 

26    0 
26    0 
26    0 
26    0 
26    0 
26    0 
26    0 

s.    d. 
25    0 
25    0 
25    0 
25    0 
25    0 

25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
(3) 

25    0 
25    0 

25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 

s.    d. 
20    0 
20    0 
20    0 
20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
(') 

20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 

$0.45 
.45 
.45 
.45 
.45 

.45 
.45 
.45 
.45 
.45 
.45 
.45 
.45 
.45 

.45 
.45 

.45 
.45 
.45 
.45 
.45 
.45 
.45 

s.    d. 
35    0 
35    0 
35    0 
35    0 
35    0 

35    0 
35    0 
35    0 
35    0 
35    0 
35    0 
20    0 
20    0 
20    0 
(') 

20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 

$0.45 

Sept.  2 

.45 

Oct.  2 

.45 

Nov.  1 

.45 

Dec.  1.             

.45 

1914. 
Jan.  3 

.45 

Fe^.3 

.45 

Mar.  2 

.45 

Apr.  1 

.45 

May  1 

.45 

June  1 

.45 

July  1 

.45 

Aug.  1 

.45 

Sept.  1 

.45 

Oct.  1 

(') 

Nov.  2 

.45 

Dec.  1 

.58 

1915. 
Jan.  2 

.58 

Feb.  1 

.58 

Mar.2 

■  .58 

Apr.  1 

.53 

May  1 

.53 

June  1 

.53 

July  1 

.53 

1 1  ton  of  2,240  pounds  stows  in  space  of  70  culiic  feet. 
32910—16 8 


2  Per  100  pounds. 


'  No  quotation. 


110      SHIPPING  BOARD,  NAVAL  AUXILIAKV,  AND  MERCHANT  MARINPL 


T.\BLE  II. — Berth  rates  in  the  foreign  trade  of  the  United  States — Continued. 
BACON  1  (PER  TON). 


From  New  York,  N.  Y.,  to- 

- 

.    Date. 

United  Kingdom. 

France, 
Havre.2 

Bel- 
gium, 

Ant- 
werp. 

Nether- 
lands, 

Bristol. 

Glas- 
gow. 

Hull. 

Liver- 
pool. 

Lon- 
don. 

Man- 
chester. 

Rotter- 
dam.' 

1913. 

s.  d. 
20    0 
20    0 
20    0 
20    0 
22    6 

22    6 
22    6 
22    6 
22    6 
22    6 
22    6 
22    6 
22    6 
22    6 
35    0 
22    6 
35    0 

35    0 
45    0 
50    0 
60    0 
60    0 
60    0 
60    0 

s.  d. 
20    0 
20    0 
20    0 
20    0 
22    6 

22    6 
22    0 
22    0 
22    0 
22    0 
22    0 
22    0 
22    0 
22    0 
32    6 
32    6 
32    6 

35    0 
40    0 
45    0 
60    0 
60    0 
60    0 
60    0 

s.  d. 
20    0 
20    0 
20    0 
20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
30    0 
30    0 
30    0 

30    0 
40    0 
40    0 
60    0 
60    0 
60    0 
60    0 

«.  d. 
17    6 
17    6 
17    6 
17    6 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
30    0 
30    0 
30    0 

30    0 
35    0 
50    0 
60    0 
60    0 
60    0 
60    0 

s.  d. 
20    0 
20    0 
20    0 
20    0 
22    6 

22    6 
22    6 
22    6 
22    6 
22    6 
22    6 
22    6 
22    6 
22    6 
30    0 
30    0 
30    0 

35    0 
35    0 
45    0 
60    0 
60    0 
60    0 
60    0 

s.  d. 
20    0 
20    0 
20    0 
20    0 
25    0 

25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
30    0 
30    0 
30    0 

30    0 
35    0 
45    0 
60    0 
75    0 
75    0 
75    0 

$0.30 
.30 
.30 
.30 
.30 

.30 
.30 
.30 
.30 
.30 
.30 
.30 
.30 
.30 
.40 
.30 
.40 

.40 
.75 
L25 
1.25 
1.25 
1.25 
1.25 

s.  d. 
20    0 
20    0 
20    0 
20    0 
25    0 

25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 

25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 

SO.  24 

Sept.  2 

.24 

Oct  2                 

.24 

Nov.  1 

.24 

Dec.  1 

.28 

1914. 
Jan.  3 

.28 

Feb.  3  

.28 

Mar.  2 

.28 

Apr.  1     

.28 

May  1 

.28 

June  1      

.28 

July  1 

.28 

Aug.  1  

.28 

Sept.  1     

.28 

Oct.  1   

.38 

Nov.  2     

.38 

Dec.  1  

.38 

1915. 
Jan. 2 

.75 

Feb.  1 

.75 

Mar. 2 

.75 

Apr.  1 

1.75 

May  1 

1.75 

1.00 

July  1 

LOO 

li 


1 1  ton  of  2,240  pounds  stows  in  space  of  65  cubic  feet. 

BUTTER  I  (PER  TON). 


2  Per  100  pounds. 


From  New  York,  N.  Y.,  to- 

Date. 

United  Kingdom. 

France, 
Havre. 2 

Belgium, 
Antwerp. 

Nether- 
lands, 

Bristol. 

Glasgow. 

Liverpool. 

London. 

Rotter- 
dam.' 

1913. 
Aug.  1 

s.   d. 
30    0 
30    0 
30    0 
30    0 
30    0 

30    0 
30    0 
30    0 
30    0 
30    0 
30    0 
30    0 
30    0 
30    0 

(3) 
30    0 

(3) 

(3) 
(3) 

(=<) 
(') 
(3) 
(') 

*.   d. 
35    0 
35    0 
35    0 
35    0 
35    0 

35    0 
35    0 
35    0 
35    0 
35    0 
35    0 
35    0 
35    0 
35    0 
35    0 
35    0 
45    0 

45    0 
45    0 
45    0 
45    0 
45    0 
45    0 
45    0 

s.  d. 
45    0 
45    0 
45    0 
45    0 
45     0 

45    0 
45    0 
45    0 
45    0 
45    0 
45    0 
45    0 
45    0 
45    0 
60    0 
45    0 
60    0 

60    0 
60    0 
60    0 
60    0 
60    0 
60    0 
60    0 

s.   d. 
50    0 
50    0 
50    0 
50    0 
50    0 

50    0 
50    0 
50    0 
50    0 
50    0 
50    0 
50    0 
50    0 
50    0 
75    0 
50    0 
75    0 

75    0 
75    0 
75    0 
75    0 
75    0 
75    0 
75    0 

SO.  45 
.45 
.45 
.45 
.45 

.45 
.45 
.45 
.45 
.45 
.45 
.45 
.45 
.45 

(3) 

.45 
.45 

.45 
.45 
.45 
.45 
.45 
.45 
.45 

s.  d. 
35    0 
35    0 
35    0 
35    0 
35    0 

35    0 
35    0 
35    0 
35    0 
35    0 
35    0 
35    0 
35    0 
35    0 
35    0 
35    0 
35    0 

35    0 
35    0 
35    0 
35    0 
35    0 
35    0 
35    0 

$0.45 

Sept.  2 

.45 

Oct.  2 

.45 

Nov.  1 

.45 

Dec.  1 

.45 

1914. 
Jan.  3 

.45 

Feb.  3 

.45 

Mar.  2 

.45 

Apr.  1 

.45 

Mav  1 

.45 

Jiuie  1 

.45 

July  1 

.45 

.45 

Sept.  1 

.45 

Oct.  1 

.58 

Nov.  2 

.45 

Dec.  1 

.58 

1915. 
Jan.  2 

.58 

Feb.  1 

.58 

Mar.  2 

.58 

Apr.  1 

.63 

May  1 

.53 

.53 

July  1 

.53 

1  A  ton  of  2,240  pounds  stows  in  space  of  70  cubic  feet. 


'  Per  100  pounds 


3  No  quotation. 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      HI 
Table  II. — Berth  rates  in  the  foreign  trade  of  the  United  States — Continued. 

LARD.i  IN  TIERCES  (PER  TON). 


Date. 


1913. 

Aug.  1 

8ept.2 

Oct.  2 

Nov.  1 

Dec.  1 

1914. 

Jan.  3 

Feb.  3 

Mar.  2 

Apr.  1 

May  1 

June  1 

July  1 

Aug.  1 

Sept.  1 

Oct.  1 

Nov.  2 

Dec.  1 

1915. 

Jan.  2 

Feb.  1 

Mar.  2 

Apr.  1 

May  1 

June  1 

July  1 


From  New  York,  N.  Y.,  to — 


United  Kingdom. 


Bristol. 


s.  d. 

20  0 

20  0 

20  0 

20  0 

22  6 


22    6 
22    6 


22  6 

22  6 

22  6 

35  0 

22  6 

35  0 


35  0 

45  0 

50  0 

60  0 

60  0 

60  0 

60  0 


Glas- 
gow. 


s.  d. 

20  0 

20  0 

20  0 

20  0 

22  6 


22  6 

22  6 

22  6 

22  6 

22  6 

22  6 

22  6 

22  6 

22  6 

32  6 

32  6 

32  6 


35  0 

40  0 

45  0 

60  0 

60  0 

60  0 

60  0 


Liver- 

pool. 

s. 

d. 

s.     d. 

20 

0 

17    6 

20 

0 

17    6 

20 

0 

17    6 

20 

0 

17    6 

20 

0 

20    0 

20 

0 

20    0 

20 

0 

20    0 

20 

0 

20    0 

20 

0 

20    0 

20 

0 

20    0 

20 

0 

20    0 

20 

0 

20    0 

20 

0 

20    0 

20 

0 

20    0 

30 

0 

30    0 

30 

0 

30    0 

30 

0 

30    0 

30 

0 

30    0 

40 

0 

35    0 

40 

0 

50    0 

60 

0 

60    0 

60 

0 

60    0 

60 

0 

60    0 

60 

0 

60    0 

don. 


Man 
Chester. 


s.  d. 

20  0 

20  0 

20  0 

20  0 

22  6 


22  6 

22  6 

22  6 

22  6 

22  6 

22  6 

22  6 

22  6 

22  6 

30  0 

30  0 

30  0 


35  0 

35  0 

45  0 

60  0 

60  0 

60  0 

60  0  i 


s.  d. 

20  0 

20  0 

20  0 

20  0 

25  0 


25  0 

25  0 

25  0 

25  0 

25  0 

25  0 

25  0 

25  0 

25  6 

30  0 

30  0 

30  0 


30  0 

35  0 

45  0 

60  0 

75  0 

75  0 

75  0 


Bel- 

France, 

gium, 

IIavre.2 

Ant- 



werp. 

s.     d. 

SO.  20 

20    0 

.20 

20    0 

.20 

20    0 

.20 

20    0 

.30 

25    0 

.30 

25    0 

.30 

25    0 

.30 

25    0 

.30 

25    0 

.30 

25    0 

.30 

26    0 

..30 

25    0 

.30 

25    0 

.30 

25    0 

.40 

25    0 

.30 

25    0 

.40 

25    0 

.40 

25    0 

.  10 

25    0 

1.25 

25    0 

1.25 

25    0 

1.25 

25    0 

1.25 

25    0 

1.25 

25    0 

Nether- 
lands, 
Rotter- 
dam.* 


$0.24 
.24 
.24 
.24 
.28 


.28 
.28 
.28 
.28 
.28 
.28 
.28 
.23 
.28 
.38 
.38 
.38 


.75 
.75 
.75 
1.76 
1.75 
1.00 
1.00 


1  A  ton  of  2,240  pounds  stows  in  space  of  65  cubic  feet. 
BEEF  (PER  TON).i 


«  Per  100  pounds. 


Date. 


1913. 

Aug.  1 

Sept. 2 

Oct.2 

Nov.  1 

Dec.  1 

1914. 

Jan. 3 

Feb.3 

Mar.  2 

Apr.l 

May  1 

June  1 

July  1 

Auir.  1 

Sept.  1 

Oct.l 

Nov.  2 

Dec.  1 

1915. 

Jan.  2 

Feb.  1 

Mar.2 

Apr.l 

May  1 

June  1 

July  1 


From  New  York,  N.  Y.,  to- 


United  Kingdom. 


Bristol  2 


6  0 
4    0 

7  0 


9    0 
9    0 


Glas- 
gow. 


«.  d. 

20  0 

20  0 

20  0 

20  0 

20  0 


20  0 

20  0 

20  0 

20  0 

20  0 

20  0 

20  0 

20  0 

20  0 

32  6 

20  0 

35  0 


35  0 

35  0 

35  0 

35  0 

35  0 

60  0 

60  0 


Liver- 

pool. 

s. 

d. 

«.    d 

20 

0 

17    6 

20 

0 

17    6 

20 

0 

17    6 

20 

0 

17    6 

20 

0 

17    6 

20  0 

20  0 

20  0 

20  0 

20  0 

20  0 

20  0 

20  0 

20  0 

30  0 

20  0 

30  0 


30  0 

30  0 

30  0 

30  0 

30  0 

60  0 

60  0 


17  0 

17  6 

17  6 

17  6 

17  6 

17  6 

30  0 

17  6 

30  0 


30  0 

30  0 

30  0 

30  0 

30  0 

60  0 

60  0 


Lon- 
don. 


s.  d. 

20  0 

20  0 

20  0 

20  0 

20  0 


20  0 

20  0 

20  0 

20  0 

20  0 

20  0 

20  0 

20  0 

20  0 

35  0 

20  0 

35  0 


35  0 

35  0 

35  0 

35  0 

35  0 

60  0 

60  0 


Man- 
chester, 


«.  d. 

20  0 

20  0 

20  0 

20  0 

20  0 


20  0 

20  0 

20  0 

20  0 

20  0 

20  0 

20  0 

20  0 

20  0 

30  0 

20  0 

30  0 


30  0 

30  0 

30  0 

30  0 

30  0 

60  0 

60  0 


France, 
Havre.8 


Bel- 

gium, 

Ant- 

werp. 

s.    d. 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

20    0 

Nether- 
lands, 
Rotter- 
dam.* 


.22 
.22 
.22 
.22 

.22 
.22 
.22 


1 1  ton  of  2,240  pounds  stows  in  space  of  50  cubic  feet. 
'  Per  tierce;  1  tierce  equals  336  pounds. 


'  Per  100  pounds. 


112      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE, 
Table  II. — Berth  rates  in  the  foreign  trade  of  the  United  States — Continued. 

OILCAKE  »  (PER  100  POUNDS). 


Date. 


1913. 

Aug.  1 

Sept.  2 

Oct.  2 

Nov.  1 

Dee.  1 

1914. 

Jan.  3 

Feb. 3 

Mar.  2 

Apr.  1 

May  1 

June  1 

Julyl 

Aug.  1 

Sept.  1 

Oct.  1 

Nov.  2 

Dec.  1 

1915. 

Jan. 2 

Feb.  1 

Mar.2 

Apr.  1 

Mayl 

June  1 

Julyl 


From  New  York,  N.  Y..  to— 


[Jnited  Kingdom 

Bel- 

Nether- 

F'-ance, 
Havre. 

gium, 
Ant- 
werp.' 

lands, 

Bristol. 

Glas- 
gow.2 

Hull. 

Liver- 

pOOl.2 

Lon- 
don.2 

Man- 
cUester. 

Rotter- 
dam. 

$0.17 

$0.16 

$0.18 

$0.16 

$0.15 

$0.15 

$0,15 

s.    d. 
13    9 

$0.15 

.17 

,16 

.18 

.16 

,15 

,15 

,15 

13    9 

,15 

,17 

,16 

.18 

.16 

,15 

,15 

,15 

13    9 

.15 

,17 

.16 

.18 

.16 

.15 

,15 

,15 

13    9 

.15 

.17 

.16 

.18 

.16 

.15 

,15 

.15 

13    9 

.28 

.17 

.16 

.18 

.16 

.15 

.15 

.15 

13    9 

,28 

.17 

.16 

.18 

.16 

,15 

.15 

,15 

13    9 

,28 

,17 

.16 

.18 

.16 

,15 

,15 

,15 

13    9 

.28 

,17 

.16 

.18 

.16 

,15 

,15 

,15 

13    9 

.28 

.17 

.16 

.18 

.16 

,15 

,15 

.15 

13    9 

.28 

.17 

,16 

.18 

.16 

,15 

,15 

,15 

13    9 

,28 

.17 

,16 

.18 

.16 

,15 

,15 

.15 

13    9 

•    ,28 

.17 

.24 

.18 

.16 

.24 

,15 

.15 

13    9 

.28 

,17 

.24 

.18 

.16 

.24 

,15 

.15 

13    9 

,28 

.25 

.23 

.25 

.22 

.23 

,20 

,25 

13    9 

,21 

,35 

.22 

.25 

.22 

.23 

,20 

,40 

13    9 

,20 

,30 

.29 

.30 

.26 

.27 

.26 

,40 

13    9 

.32 

.30 

.29 

.30 

.26 

.35 

.26 

.40 

13    9 

,55 

,40 

.40 

.40 

.40 

.40 

,40 

1.00 

13    9 

,60 

.40 

.40 

.40 

.40 

.40 

,40 

.75 

13    9 

L25 

.45 

.40 

.40 

.40 

.40 

,40 

,75 

13    9 

,80 

.45 

.45 

.45 

,45 

.45 

.45 

.65 

13    9 

,80 

.45 

.45 

,45 

.40 

.45 

.45 

.58 

13    9 

.65 

,45 

.45 

.45 

.40 

.45 

.45 

.58 

13    9 

.65 

'  One  ton  of  2,249  pounds  stows  in  space  of  46  cubic  feet. 

2  Same  rates  quotea  in  sterling  per  ton  converted  into  cents  per  100  pounds  for  comparative  purposes. 

« Per  ton. 

POEK.i 


From  New  York,  N.  Y.,  to 

- 

Date 

United  Kingdom. 

Bel- 
Ha^?e'  S'"™- 

Nether- 
lands, 
Rotter- 
dam 
(per 
100 
pounds). 

Bristol 

(per 
barrel). 

Glas- 
gow 
(per 
ton). 

Hull 
(per 
Ion). 

Liver- 
pool 
(per 
ton). 

Lon- 
don 
(per 
ton). 

Man- 
Chester 
(per 
ton). 

(per 

100 

K-ilos).s 

Ant- 
werp 
(per 
(ton). 

1913. 

Aug.l 

Sept.2 

Oct. 2 

Nov.l 

De?.  1 

1914. 
Jan  3 

s.  d. 
3    0 
3    0 
3    0 
3    0 
3    0 

3    0 
3    0 
3    0 
3    0 
3    0 
3    0 
3    0 
3    0 
3    0 
6    0 
3    C 
6    0 

6    0 
6    0 
6    0 
6    0 
6    0 
12    8 
12    8 

«.   d. 
20    0 
20    0 
20    0 
20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
32    6 
20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
60    0 
60    0 

s.  d. 
20    0 
20    0 
20    0 
20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
30    0 
20    0 
30    0 

30    0 
30    0 
30    0 
30    0 
30    0 
60    0 
60    0 

s.  d. 
17    6 
17    6 
17    6 
17    6 
17    6 

17    6 
17    6 
17    6 
17    C 
17    6 
17    6 
17    C. 
17    6 
17    6 
30    0 
17    6 
30    0 

30    0 
30    0 
30    0 
30    0 
30    0 
60    0 
60    0 

s.  d. 
20    0 
20    0 
20    0 
20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
35    0 
20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
60    0 
60    0 

s.  d. 
20    0 
20    0 
20    0 
20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
30    0 
20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
60    0 
60    0 

$0.75 
.75 
.75 
.75 
.75 

.75 
.75 
.75 
75 
.75 
.75 
.75 
.75 
.75 
.88 
.75 
.88 

.88 

s.  d. 
20    0 
20    0 
20    0 
20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20     0 
20     0 
20    0 
20    0 
20    0 
20    0 

20    0 

$0.22 
.22 
.22 
.22 
.22 

.22 

Ieb.3 

Mar.2 

Apr.  1 

.22 
.22 
;22 

Mav  1 

.22 

June  1 

,22 

July  1.. 

.22 

Aug.  1 

.22 

Sept.  1 

.22 

Oct.l 

.38 

Nov.  2 

,23 

Dec.  1 

.22 

1915. 
Jan.  2 

.22 

Feb.  1 

.88 

20    0 

.22 

Mar  2  

.88     20    0 

.22 

Apr.  1 

.88 
.88 
.88 
.88 

20    0 
20    0 
20    0 
20    OL 

.23 

Mav  1 

.22 

June  1    

.22 

July  1 

.22 

•  1  barrel  equals  400  pounds;  1  ton  of  2,240  pounds  stows  in  space  of  50  cubic  feet. 

•  1  kilo  equals  2i  pounds. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  JVIERCHANT  MARINE.      113 


Table  II. — Berth  rates  in  the  foreign  trade  of  the  United  States — Continued. 
GRAIN  (PER  BUSHEL). 


From  New  York,  N 

.Y.,to— 

Date. 

United  Kingdom. 

France, 
Hawe.i 

Nether- 
lands, 

Rotter- 
dam. 

Bristol. 

Hull. 

Liver- 
pool. 

London. 

Man- 
chester. 

1913. 
Xxifn.  1.        

d. 
34 
3 
44 
44 

(») 

3 

24 
24 
24 
24 

2 
2 
4 
4 

7 

84 
94 
10 
12 
12 
12 
12 

d. 

f 
44 
44 
3i 

3 

2| 

2 

2 

2 

2 

2 

24 

24 

3| 

4 

7 

9 
94 
9 

12 
12 
11 
11 

d. 
24 
2i 
2i 
2i 
2i 

2 
2 

14 

14 

14 

14 

24 

24 

24 

4 

4 

64 

84 

11 

12 
12 
12 
11 
11 

d. 

2i 

3 

3 

24 

5* 
2 

2 

2 

2 

2 

2 
2 

34 
4i 
7 

9 

12 
12 

12 
11 
11 

d. 
24 

'^ 

3 

24 

14 
14 
14 
14 

U 

24 

3? 
64 

84 
10 
12 
12 
12 
12 
12 

«.    d. 
3    3 
3    3 
3    3 
3    3 

3  14 

2    9 
2    74 
2    6 
2    6 
2    6 
2    6 
2    0 
2    44 
2    44 
2    9 

4  0 
4    0 

(^; 
(») 
(2) 
(^) 
(^) 
e) 
(^) 

Cents. 
7 

Sept.  2     

54 

Oct.  2 

B* 

Nov.  1 

0 

Doc.  1      

54 

1914. 
Jan  .3  

5i 

Feb.  3 

4* 

jlar.2 

41 

Apr.l 

4i 

Mav  1       

4} 

June  1 

4i 

Julv  1 

e 

6 
6 

Sept.  1 

Oct  1   

(') 

Nov.  2 

11 

Dec.  1 

15 

1915. 
Jan.  2 

30 

Feb.  1 

30 

Mar.2 

(') 

Apr.  1 

h) 

Mav  1 

(') 

(2) 

July  1 

(^) 

•  Per  quarter:  1  quarter  equals  8  bushels. 

TALLOW  >  (PER  TON). 


» No  quotation. 


From  Newr  York,  N.  Y.,  to 

— 

Date. 

United  Kingdom. 

France, 
Havre.2 

Bel- 
gium, 

Ant- 
werp. 

Nether- 
lands, 
Rotter- 
dam.' 

Bristol. 

Glas- 

g0V7. 

Hull. 

Liver- 
pool. 

Lon- 
don. 

Man- 
chester. 

1913. 
Aug.l 

«. 
20 
20 
20 
20 
22 

22 
22 
22 
22 
22 
22 
22 
22 
22 
35 
35 
35 

35 
45 
50 
60 
60 
fiO 
60 

d. 
0 
0 
0 
0 
6 

6 
0 
6 
6 
6 
0 
6 
6 
6 
0 
0 
0 

0 
0 
0 
0 
0 
0 
0 

s.    d. 

20    0 
20    0 
20    0 
20    0 
22    6 

22    6 
22    6 
22    6 
22    6 
22    6 
22    6 
22    e 
22    6 
22    6 
32    6 
32    6 
35    0 

35    0 
40    0 
45    0 
00    0 
60    0 
75    0 
75    0 

s.    d. 
20    0 
20    0 
20    0 
20    0 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
30    0 
30    0 
30    0 

30    0 
40    0 
40    0 

eo  0 

00    0 
60    0 
60    0 

s.    d. 
17    6 
17    6 
17    6 
17    6 
20    0 

20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
20    0 
30    0 
30    0 
30    0 

30    0 
35    0 
50    0 
60    0 
60    0 
75    0 
75    0 

s.    d. 
20    0 
20    0 
20    0 
20    0 
22    6 

22    6 
22    6 
22    6 
22    6 
22    6 
22    6 
22    6 
22    6 
22    6 
30    0 
30    0 
30    0 

35    0 
35    0 
45    0 
60    0 
60    0 
25    0 
25    0 

s.    d. 
20    0 
20    0 
20    0 
20    0 
25    0 

25    0 
25    0 
25    3 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
30    0 
30    0 
30    0 

30    0 
35    0 
45    0 
60    0 
75    0 
75    0 
75    0 

$0.30 
.30 
.30 
.30 
.30 

.30 
.30 
.30 
.30 
.30 
.30 
.30 
.30 
.30 
.40 
.40 
.40 

.40 
.75 
1.25 
1.25 
1.25 
1.25 
1.25 

s.    d. 
20    0- 
20    0 
20    0 
20    0 
25    0 

25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 

25    0 
25    0 
25    0 
25    0 
25    0 
25    0 
25    0 

SO.  24 

8ept.2 

Oct.  2 

.24 
.24 

Nov.  1 

.24 

Dec.  1 

.28 

1914. 
Jan.  3 

.28 

Feb. 3..: 

.28 

Mar.2 

.28 

Apr.  1 

.28 

Mavl 

.28 

Jurio  I 

.28 

Julv  1 

.28 

Aug.  1 

.28 

Pept.  1 

.28 

Oct.l 

.38 

Nov.  2 

.38 

Dec.  1 

.38 

1915. 
Jan. 2 

.76 

Feb.  1 

,75 

Mar.2 

.75 

Apr.  1 

1.75 

May  1 

1.76 

June  1 

1.00 

July  1 

1.00 

1  ton  of  2,240  pounds  stows  in  space  of  65  cubic  feet. 


»  Per  100  pounds. 


114      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Appendix  E. 

Table  I. — Rates  of  premium  announced  by  the  United  States  Bureau  of  War  Risk  Insur- 
ance {exclusive  of  rates  applicable  to  special  ports). 


Nature  of  policy. 


Tot  voyage:  > 

Cargo — freight  and  ad\anees— 

L  Between  ports  of  the  United  States,  Its  possessiuns, 
or  anj'  nonbelligerent  ports  in  the  Western  Hemi- 
sphere  

2.  Between  ports  on  the  west  coast  of  the  United  States 

and  Japan 

3.  Between  ports  on  the  west  coast  of  the  United  States 

and  China  or  the  Philippines 

i.  To  nonbelligerent  ports  other  than  above  mt  north 
of  Havre,  in  Europe,  nor  east  of  Sicily,  in  the  Med- 
iterranean   

5.  To  all  other  ports 

Vessels— 

1.  Between  ports  of  the  United  States  or  any  nonbellig- 

erent ports  in  the  Western  Hemisphere 

2.  Between  ports  on  the  west  coast  of  the  United  States 

and  Japan  and  (or)  China 

3.  To  nonbelligerent  ports  other  than  above  not  north 

of  Ha\Te,  in  Europe,  nor  east  of  Sicily,  in  the  Med- 
iterranean   

4.  To  all  other  ports 

For  time: « 

Vessels — 

1.  Without  warranty 

2.  Warranted  using  only  nonbelligerent  ports  in  the 

Western  Hemisphere 


Rates  in  effect  from- 


Sept.  17, 
1914. 


PcT  cent. 
i 

i 

i 


Dec.  15, 
1914. 


Per  cent. 


Jan.  11, 
191.5. 


Per  cent, 
i 

i 

i 


Feb.  15, 
191.5. 


Per  cent, 
i 


I  From  port  of  loading  to  not  more  than  two  port  s  of  discharge. 
•  Period  of  90  days. 


I 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      115 


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SHIPPING  BOARD,  NAVAL  AUXILIAftV,  AND  MERCHANT  MARINE.      123 


Appendix  F. 

Table  I. — All  classes  of  aliens  admitted,  departed,  debarred,  deported,  and  citizens  arrived 

and  departed,  by  ports,  years  ended  July,  1914,  and  July,  1915. 

[Prepared  by  Bureau  of  Immip-ation,  Department  of  Labor.] 


Ports. 


August,  1913,  to  July,  1914. 

New  York,  N.  Y 

Boston,  Mass 

Philadelphia.  Pa 

Baltimore,  Md 

Canadian  Atlantic  ports 

Portland,  Me 

New  Bedford,  Mass 

Providence,  R.  I 

Newport  News,  \'a 

Norfolk,  Va 

Savannah,  Ga 

Miami,  Fla 

Key  West,  Fla 

Other  Atlantic  ports , 

Tampa,  Fla 

Pensacola,  Fla , 

Mobile.  Ala , 

New  Orleans,  La 

Galveston ,  Tex 

Other  Gulf  ports 

San  Francisco,  Cal 

Portland ,  Oreg , 

Seattle,  Wash 

Canadian  PaciCc  ports 

Alaska 

Canadian  border  stations 

Mexican  border  stations 

Honohdn .  Hawaii 

Porto  Rico 

Total 

August,  1914,  to  July,  1915 

New  York,  N.  Y 

Boston,  Mass , 

Philadelphia,  Pa , 

Baltimore,  Md 

Canadian  A  tlantic  ports 

Portland,  Me 

New  Bedford,  Mass , 

Providence,  R.  I 

Newport  News,  Va 

Norrolk,  Va 

Savannah,  Ga 

Miami,  Fla 

Key  West,  Fla 

Other  Atlantic  ports 

Tampa,  Fla 

Pensacola,  Fla 

Mot  ile,  Ala 

New  Orleans,  La 

Galveston   Tex 

Other  Gul  ports 

San  Francisco,  Cal 

Portlana,  Oreg 

Seattle,  Wash 

Canadian  Paciiic  ports 

Alaska 

Canadian  boraer  stations 

Mexican  border  stations 

ITonolulu,  Hawaii 

Porto  Rico 

Total 

Net  decrease,  1915: 

Number 

Per  cent 


Immi- 
grant 
aliens  ad 
mitted. 


821,792 

63,287 

51,375 

38,010 

26, 194 

1,951 

1,727 

9,700 

62 

16 

7 

1,433 

1,421 

27 

1,837 

11 

131 

2,705 

6,460 

38 

6,796 

46 

2,822 

360 

531 

83, 790 

12, 631 

4,271 

1,182 


1,140,613 


146, 
13, 

4, 

3, 
2, 

1, 

1, 

1, 
1, 

8, 
2, 


852, 786 
75 


Non- 
immi- 

prant 
aliens 
ad- 
mitted 


112,640 

10,482 

2,585 

1,008 

12,821 

5,761 

376 

971 

59 

6 


2, 254 
3,639 

7 
1,518 

1 

201 

2,451 

268 

6 
3,055 

2 
2,528 
1,037 
57 
8,764 
3,515 
1,474 
2,395 


179,881 


58, 106 

4  808 

971 

92 

2, 585 

239 

120 

227 

368 


1,737 

3.140 

4 

1,369 


100 

2,535 

186 

1 

4, 285 

5 

2,284 

515 

57 

7,725 

6, 652 

1,074 

2,  ICO 


101,499 


78, 382 
44 


United 
States 

citi- 

ens  ar- 
rived. 


169,363 

14, 722 

3,079 

1,174 

5,549 

127 

52 

493 

20 

1 

20 

1,420 

11,782 

21 

2,012 

11 

223 

11,163 

4,179 

2 

5,511 


905 
935 
4,170 
42, 828 
1,629 
1,047 
2,902 


285,340 


122. 455 

9,340 

1,686 

.59 

9,544 

22 

20 

212 

261 

35 

26 

1,158 

10,141 

13 

1,590 

1 

176 

7, 269 

1.513 

6 

6,907 

2 

778 

314 

2,551 

45, 845 

523 

654 

3,171 


226, 272 


59,088 
21 


Aliens 

de- 
barred. 


16, 125 

845 

741 

302 

795 

134 

30 

183 

2 

11 

3 

29 

52 

1 

19 

2 

17 

70 

258 

2 

331 


132 

15 

12 

9,957 

2,407 

205 

35 


32, 715 


1,979 
129 
57 
25 
37 

4 
25 
17 
36 
14 

1 
43 
23 

4 
13 

2 
11 
38 
20 


243 

3 

122 

21 

33 

17,761 

2,977 

73 

24 


23, 735 


8,980 
28 


Emi- 
grant 
aliens 

de- 
parted. 


236, 494 
9,810 
8,647 
1,935 
6,313 
386 
278 
1,440 


902 

766 


14 
832 
756 


2,197 


652 
660 


30, 289 

1,377 

795 

957 


305, 505 


137,082 

7,830 

5,967 

62 

1,443 

95 

258 

1,740 


872 
2,681 


3,071 


790 
224 


21.030 
170 
419 
803 


185,334 


120, 171 
39 


Non- 
emi- 
grant 
aliens 

de- 
parted. 


205, 448 
17, 186 
2,745 
1,120 
3,339 
5,973 
171 
1,079 
1 


1,868 

6,051 

1 

10 


70 

2,860 

316 


6,476 


2,474 
1,245 


55,351 
1,235 
3,083 
2,381 


United 
States 
citi- 
zens 
de- 
parted. 


225, 480 

17,090 

4,045 

2,130 

4,208 

393 

8 

600 

1 


1,094 

12, 601 

13 


168 
7,869 
1,033 


6,252 


1,044 
932 


64,447 

695 

2,009 

4,056 


320,483  [356,176 


107,976 
7,161 

885 

66 

708 

1,768 

33 

426 

1 


1,716 
4,994 


213 

2,196 

41 


68,947 

2, 539 

745 

132 

1,047 

15 

4 

322 

1 


930 
11,367 


6,969 


2,246 
618 


16,054 

714 

3,039 

2,141 


159,970 


160, 513 
50 


62 

6,467 

158 


5,301 


733 
250 


25.913 

556 

1,641 

3,616 


130,760 


225, 416 
63 


Aliens 

de- 
ported 
by  im- 
niicra- 

tion 

ofiicers 

after 

land- 

■  ing. 


,199 
133 
167 


1 

3 
3 
3 
8 
23 
39 


660 
3 

51 


766 

543 

31 


4,745 


655 
83 
42 
4 


836 

605 

3 

3 


2,334 
49 


124      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Secretary  Redfield.  I  think  I  express  the  feeling  of  our  depart- 
ment when  I  say  that  prognostications  as  to  what  is  to  be  the  future 
of  shipping  are  based  on  the  uncertainty  as  to  what  is  going  to  happen 
to  shipping  in  the  coming  months  before  the  war  ends.  I  don't  know 
how  many  more  vessels  are  going  to  be  destroyed.  I  don't  know  of 
anybody  that  does,  and  any  prophecies  as  to  the  future  of  shipping, 
which  leaves  that  out  of  account,  are  to  be,  of  course,  entirely  upset 
by  whatever  facts  of  that  kind  might  happen.  It  is  the  fact,  of 
course,  that  every  day  nearly  we  hear  of  merchant  vessels  being 
destroyed,  and  it  is,  of  course,  a  fact  that  the  present  number  of 
merchant  vessels  available  is  far  too  small  for  the  traffic,  and  that  we 
are  very  seriously  handicapped  in  all  our  ports  by  lack  of  ships  to 
carry  our  cargoes. 

But  if  I  may  say  so,  that  is  the  least  of  our  difficulties.  We  are  in  a 
position,  to  speak  with  frankness,  such  as  a  self-respecting  nation 
can  not  long  stay  in.  The  question  whether  American  manufacturers 
ship  their  goods  to-day  depends  in  a  very  large  part  upon  whether 
somebody  else  wants  them  to  be  shipped,  and  upon  their  consent  to 
taking  them. 

This  mass  of  letters  here  spsaks  one  after  another  of  the  conditions. 
We  are  a  department  store  without  a  delivery  system.  We  have  been 
dependent  upon  our  rivals  for  means  of  delivering  our  goods.  So 
long  as  it  is  profitable  for  our  rivals  to  lend  us  their  water  wagons, 
they  will  do  it.  The  moment  it  becomes  to  their  interest  not  to  lend 
us  those  wagons  they  cease  to  do  so — -and  the  situation  to-day  is  that 
for  reasons  that  are  sufficient  unto  themselves  in  many  cases  they  not 
only  refuse  to  allow  us  to  ase  their  ships  but  they  may  take  methods 
to  make  others  refuse  also.  For  example,  a  concern  wishing  to  ship 
10  tons  of  metal  to  a  Scandinavian  port,  placed  the  goods  upon  a 
neutral  ship,  and  was  notified,  after  they  were  on  board  the  vessel,  a 
day  or  two  later  that  beers  use  the  vice  consul  of  another  power  has 
not  O.  K'd  the  bill  of  lading  the  neutral  steamship  company  could 
not  receive  their  goods,  and  they  were  put  back  on  the  dock.  The 
reason  for  that  was  that  this  company,  this  manufacturer,  had  not 
signed  a  certain  agreement  about  their  goods  which  had  notning  to 
do  with  this  shipment.  Therefore  the  fact  is  this — that  A  can  not 
ship  goods  to  B  because,  as  regards  C,  he  has  not  made  another  agree- 
ment regarding  the  matter  with  D.  In  other  words,  the  shipment 
was  held  up  because  the  vice-consul  refused,  for  reasons  wholly  unre- 
lated to  the  matter,  to  O.  K.  a  bill  of  lading  for  a  vessel  not  of  his 
own  country,  and  the  shipment  was  not  sent  and  has  not  been  yet. 

A  miller  in  Winona,  Minn.,  shipped  flour  under  an  annual  contract 
to  Alexandria,  Egypt.  After  a  shipment  was  made  in  the  regular 
course  of  Imsiness  he  drew  on  his  bankers  ia  New  York  for  the  amount 
of  goods  going  forward  by  a  ncutrrd  line.  "V\Tien  the  goods  got  to 
New  York  the  neutriil  was  found  to  have  svspcndod  sailings,  hiii  ves- 
sel being  commandeered  b}^  his  Government.  The  draft  was  dis- 
honored on  the  ground  that  the  shipm.ent  had  not  been  sent.  On 
the  back  of  the  bill  of  lading  Wcis  a  rubber-stamped  agreement  to  the 
substantial  efl'ect  that  at  the  convenience  of  the  foreign  Government 
they  could  susi^end  shipping.  They  did  so.  You  can  imagine  what 
your  feelings  would  be  if  you  h;  d  used  the  proceeds  of  the  draft. 

I  give  you  these  instances  to  illustrate  what  it  means  to  use  a  for- 
eign delivery  Avagon .     "V\naen  the  foreigner  wants  his  wagon  he  takes  it. 


I 


SHfPPlXG  BOARD,  INAVAL  AUXIl-lARV,  A^^D  MERCHANT   MARINE.      125 

Now  these  were  both  neutral  nations  and  they  wanted  their  ships, 
and  whether  we  needed  those  shi])s  or  not  was  a  merely  incidental 
matter  to  them.  There  could  hardly  be  a  more  striking  example  of 
the  helplessness  of  this  great  people  upon  the  sea. 

Mr.  Thurman  reminds  me  of  the  case  ot  a  manufacturer  in  New 
England  m  whose  behalf  we  worked  in  China  to  get  an  order  for  the 
entire  equipment  of  two  Chinese  cotton  mills.  The  order  was  taken 
against  the  very  keen  comj^etition  of  British  manufacturers  and  the 
Am-crican  manufacturer  was  justly  proud  of  having  taken  an  order 
for  about  4,650  tons  of  machinery  in  competition  with  the  great 
concerns  of  Great  Britain.  I  think  I  am  safe  m  saying  that  an  exac- 
tion of  almost  if  not  quite  $100,000  additional  for  freights  was  made 
before  he  could  get  his  goods  carried  across  the  Pacific  Ocean  at  all. 
Certainly  it  was  hoped  to  get  a  rate  of  75  cents  a  hundred  pounds 
through.  That  was  considered,  I  believe,  several  times  the  ordinary 
rate.     At  last  he  paid  $1.30  a  hundred  pounds. 

In  other  words,  do  you  not  see  that  a  foreign  Government  con- 
trolling  

The  Chairman  (niterposing).  Mr.  Secretary,  right  at  that  point  I 
have  that  correspondence  here  referring  to  the  Sa co-Lowell  shops. 
I  think  it  would  be  well  to  put  that  in  the  record. 

(The  letter  and  the  correspondence  follow:) 

Department  of  Commerce, 

Office  of  the  Secretary, 
Washington,  December  24,  1915. 
My  Dear  Judge  Alexander:  I  hand  yoii  copy  of  letter  from  the  Saco-Lowell 
Shops,  dated  21st,  which  is  in  substance  an  application  to  be  advised  of  the  terms 
and  conditions  on  which  a  Government  transport  may  be  used  in  connection  with 
their  Clunese  shipments  provided  legislation  is  enacted  permitting  such  use.  These 
are  the  parties  of  whom  I  recently  wrote  you,  and  you  will  recall  the  suggestion  about 
which  we  have  correspotided  to  the  effect  that  such  use  of  Government  vessels  might 
be  permitted  either  by  joint  resohition  or  by  the  coming  shipping  bill.  It  would  be 
my  tliought  that  whichever  would  get  the  ships  into  use  first  should  be  at  lea  t  con- 
sidered with  great  care. 

I  confess  that  it  is  hard  to  regard  with  patience  these  idle  vessels  swinging  at  their 
anchors  when  so  much  depends  upon  their  use. 
Appreciating  your  kind  attention  to  this  matter,  I  am, 
Yours,  very  truly, 

William  G.  Redfield,  Secretary. 
Hon.  J.  W.  Alexander, 

Chairman  Committee  on  Merchant  Marine  and  Fisheries, 

House  of  Representatives,  Washington. 


Boston,  Mass.,  December  21,  1915. 
Hon.  William  C.  Redfield, 

Secretary  Department  of  Commerce,  Washington,  D.  C. 

My  Dear  Sir:  Referring  to  our  recent  correspondence  regarding  the  trouble  we 
are  having  in  obtaining  freight  rates  to  China,  would  say  that  we  received  another 
inquiry  the  day  before  yesterday  fi'om  our  agents  in  Shanghai  asking  a  rate  on  ma- 
cliinery  for  delivery  in  September  and  October,  and  up  to  this  writing  we  have  been 
unable  to  obtain  any  definite  rate,  although  we  have  been  making  every  effort  to 
obtain  this  information. 

We  have  made  extraordinary  efforts  to  develop  our  business  in  China;  we  have  a 
man  there  now,  and  from  orders  received  and  others  pending,  it  woidd  seem  that  we 
could  do  some  business  there  if  we  were  able  to  depend  upon  shipping  our  machinery 
at  reasonable  definite  dates  and  at  reasonable  rates. 

Our  competition  comes  largely  from  England,  and  our  representative  advises  us 
that  the  English  shipments  and  rates  have  not  been  materially  changed  and  have 
stability  that  can  be  depended  upon,  but  the  advance  in  rates  from  this  country  has 

32910—16 9 


126      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

been  so  great  and  the  deliveries  are  so  unreliable  that  it  has  prevented  our  being 
able  to  do  business. 

If  any  legislation  is  enacted  permitting  the  use  of  Government  transports  to  carry 
cargoes,'  we  wish  to  know  the  terms  and  conditions  under  which  it  would  be  best  for 
us  to  make  shipments. 

Any  information  or  assistance  that  you  can  give  us  along  these  lines  will  be  greatly 
appreciated. 

Very  truly,  yours,  Saco-Lowell  Shops, 

T.  J.  Hale,  General  Agent 

Secretary  Reufield.  You  will  ol)ser\e  the  case,  therefore,  where 
a  competing  power  could  use  its  power  at  sea  to  tax  us  so  heavily  for 
delivering  an  order  w^e  have  taken  in  competition  with  its  manufac- 
turers that  by  reason  of  freight  rates  our  manufacturers  might  not  • 
want  to  take  another  one  since  he  coidd  find  no  friendly  interest  on 
the  water  that  woidd  carry  his  goods. 

Mr.  Hardy.  Has  our  own  ship])ing  l)een  any  more  considerate 
of  the  rights  of  the  shipper  than  foreign  shipping,  or  hnve  they  piled 
up  their  charges  just  about  the  same  ? 

Secretary  Redfield.  I  am  not  prepared  c^etinitely  to  say,  Judge 
Hardy,  except  that  there  is  the  case  of  one  company  running  to  South 
America  and  the  West  Indies,  which,  up  to  a  few  months  ago,  had 
not  advanced  its  rates.  Whether  they  have  done  so  since  I  do  not 
know,  but  there  were  a  good  nniny  months  in  v\^hich  the  r;  tes  had 
been  raised  everywhere  else  when  that  company  held  them  as  they 
were  before. 

Now,  I  think  we  shall  have  our  American  Hag  back  on  the  P;.ci  'c. 
Everything  seems  to  point  to  that  end.  But  without  wishing  to 
weary  you,  I  hope  you  grasp  the  thing  which  has  become  a  matter 
of  daily  sorroxv  to  us,  and  that  is  that  American  helplessness  com- 
mences at  the  water,  and  that  this  great  people  of  ours  is  not  inde- 
pendent in  that  sense,  but  dependent,  and  we  must  solicit  the  assist- 
ance of  others  when  they  choose,  as  they  choo:=e,  and  to  the  extent 
they  choose,  at  the  price  they  choose,  if  we  t  re  to  do  our  business 
abroad . 

Xow,  I  think  we  all  feei — for  here  is  no  cjuestion,  gentlemen,  of  any 
party — that  it  is  intolera))le,  and  for  one  I  am  glad  to  go  on  record 
and  say  that  I  will  consent  to  anything  that  will  sto]"-  that.  It  is 
intolerable. 

I  hold  in  my  hand  a  letter,  dated  February  8,  of  which  I  will  rer;d 
a  portion. 

American  Cast  Iron  Pipe  Co., 

Nexv   York,  February  8,  1916. 
Dr.  E.  E.  Pratt, 

Chief  Bureau  of  Foreign  and  Domestic  Commerce, 

Washington,  D.  C. 
My  Dear  Dr.  Pratt:  We  have  received  a  cable  from  our  agent  in  Buenos  Aires 
informing  us  that  the  Department  of  Public  Works  of  the  Argentine  Republic  will 
be  in  the  market  shortly  for  28,000  tons  of  cast  iron-water  pipe.  A  public  letting  will 
be  held  on  March  16,  to  which  we  will  be  in-\TLted  to  compete  with  European  manu- 
facturers. 

Up  to  the  present  time  European  foundries  have  furnished  practically  all  the  water 
pipe  that  has  been  used  by  the  Argentine  Republic,  the  Belgian,  French,  German, 
and  English  having  divided  the  orders  about  equally.  At  the  present  time  the 
French,  German,  and  Belgian  foundries  are  not  in  position  to  make  quotations,  and 
the  competition  therefore  rests  between  the  British  and  ourselves.  Except  for  the 
transportation  situation,  we  would  have  a  good  chance  to  secure  this  business,  and 
it  is  useless  to  point  out  to  you  that  this  is  an  opportunity  of  a  Lifetime  for  us  American 
manufacturers;  the  first  opportunity,  as  a  matter  of  fact,  that  we  have  had  to  compete 
or  the  Argentine  business,  and  if  we  fail  this  time  we  may  as  well  retire  from  the  field 


SHIPPING  BOARD,  NAVAL  AUXILJARY;  AND  MERCHANT  MARINE.      127 

The  freight  situation  appears  an  unsurmountable  obstacle  and  the  purpose  of  this 
letter  is  to  appeal  through  you  to  the  Department  of  Commerce  of  the  United  States, 
with  the  hope  that  you  may  possibly  offer  some  suggestions  which  will  assist  us  in 
solving  our  difficulties.  Before  we  can  make  quotations,  we  must,  of  course,  have  some 
definite  freight  rates  guaranteed  us,  and,  so  far,  none  of  the  regular  steamship  lines 
have  offered  us  any  encouragement  in  this  direction.  We  inclose  herewith  a  copy 
of  a  letter  we  sent  to  several  of  the  steamship  companies  operating  between  this 
country  and  the  Argentine.  We  have  received  only  one  response  to  this  letter,  and 
our  investigations  of  the  general  situation  convince  us  that  we  can  not  hope  to_  secure 
freight  rates  on  this  movement  which  would  give  us  any  chance  of  securing  this  busi- 
ness. The  British  steamship  companies,  we  are  satisfied,  will  make  freight  rates  to 
British  pipe  foundries  at  about  half  our  present  rate.  As  a  matter  of  fact,  the  two  or 
three  steamship  lines  that  we  have  from  the  United  States  to  the  Argentine  absolutely 
decline  to  name  us  any  rates  which  they  would  be  willing  to  protect  for  some  three, 
four,  or  five  months  ahead.  At  present,  to  charter  would  cost  us  S30  per  ton  to  freight 
our  pipe  from  New  York,  or  from  Gulf  ports,  to  Buenos  Aires,  which  is  considerably 
more  than  the  cost  of  the  pipe,  and  we  would  stand  no  show  with  British  manufac- 
turers ^vith  these  exorbitant  rates.  The  writer  has  consulted  many  ship  brokers,  the 
officials  of  the  American  International  Corporation,  the  officials  of  the  American- 
Hawaiian  Steamship  Co.,  and  others;  but  nothing  definite  in  the  "nay  of  tonnage,  at 
anything  like  a  reasonable  rate,  has  been  offered  us. 

The  {>resident  of  the  American  Cast  Iron  Pipe  Co.,  Mr.  J.  R.  McWane,  is  now  in 
Chile  and  will  arrive  in  Buenos  Aires  \vithin  the  next  few  days.  Mr.  McWane  will 
cable  us  shortly  to  find  out  what  we  can  do  in  the  way  of  freights.  We  would  like  to 
be  able  to  tell  him  that  the  United  States  Department  of  Commerce  will  undertake 
to  assist  us  in  making  a  reasonable  freight  rate  that  would  protect  us  in  oisr  quotations 
in  competition  with  British  manufacturers. 

It  occurs  to  writer  that  this  situation  is  well  worth  bringing  before  the  Congress  of 
the  United  States,  or  the  committee  wliich  has  in  charge  the  merchant  marine  bill. 
The  writer  would  be  glad  to  go  to  Washington  if  you  should  think  it  achdsable,  to  put 
the  details  before  the  proper  authorities. 
Yours,  very  truly, 

American  Cast  Iron  Pipe  Co. 
r>EVEREUx  Lake. 

Mr.  Hardy.  Have  you  any  definite  evidence  that  these  companies 
that  have  been  carrying  for  the  United  States  trade  are  really  charg- 
ing our  shippers  double  prices  to  what  they  charge  the  English 
shipper? 

Secretary  Redfield.  Well,  no,  Judge  Hardy. 

Mr.  Hardy,  The  reason  I  asked  that  question  is  that  in  normal 
times  private  shipping  companies  have  appeared  before  this  commit- 
tee, whether  English,  German,  or  otherwise,  and  they  all  claim  that 
they  give  the  American  shipper  fair  treatment;  that  it  is  a  matter  of 
business  and  not  of  country. 

Mr.  Edmonds.  Mr.  Secretary,  isn't  it  a  fact  that  after  the  Pacific 
Mail  went  off  the  Pacific  Ocean  the  Japanese  rates  were  raised  going 
out  and  left  the  same  coming  in  % 

Secretary  Redfield.  I  don  t  know.  I  think  it  is  quite  possible.  I 
have  a  statement  here  which  I  was  about  to  read.  It  is  a  statement 
from  our  commercial  attache  to  our  minister  in  China. 

Mr.  Edmonds.  The  statement  has  been  made  in  the  newspapers 
that  the  Japanese  fines  from  San  Francisco  had  raised  their  rates  on 
goods  going  to  the  Orient  from  this  country,  but  had  left  their  rates 
the  same  coming  into  this  country. 

Secretary  Redfield.  It  is  a  matter  that  can  be  very  easily  found 
out. 

Mr.  Edmonds.  That  statement  was  made  in  the  Philadelphia 
Ledger,  I  think. 

Secretary  Redfield.  I  have  several  examples  of  discriminating 
rates;  one  even  worse  than  that  you  speak  of.     The  one  that  the 


128      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

chairman  hands  lue  is  a  communication  from  our  consul  in  Auckland, 
New  Zealand. 

(The  statement  follows:) 

The  Secretary  of  the  Treasury, 

Washington,  January  W,  1916. 
Dear  Judge  Alexander:  I  hand  you  herewith  for  your  information  copy  of  a 
letter  from  the  American  consul  general  at  Auckland,  New  Zealand,  addressed  to  the 
Secretary  of  State,  relative  to  freiglit  rates  from  that  port  to  London  and  New  York. 
Faithfully  yours, 

W.  G.  McAdoo. 
Hon.  J.  W.  Alexander, 

House  of  Representatives. 


SHIPPING    RATES    STILL    GREATLY    IX    FAVOR    OF   LONDON. 

[From  Consul  General  Alfred  A.  Winslow,  Auckland,  New  Zealand,  Oct.  2&,  1915.) 

I  have  the  honor  to  report  that  there  is  still  much  complaint  on  the  part  of  merchants 
iu  New  Zealand  relative  to  freights  between  New  York  and  this  country  and  vice  versa. 
It  is  claimed  that  freight  rates  are  higher  between  New  York  and  New  Zealand  ports 
than  between  New  Zealand  ports  and  London,  and  that  now  the  Panama  Canal  is 
closed  still  another  advance  is  made  to  and  from  New  York. 

However,  the  sky  is  beginning  to  clear  away  some,  for  new  lines  are  entering  for  the 
trade,  but  even  these  are  quoting  rates  in  favor  of  London,  and  it  seems  that  this  will 
continue  until  American  lines  can  enter  for  this  business.  The  latest  rates  quoted  for 
New  York,  via  London,  on  Kauri  gum  is  .$17.03  per  ton  against  but  .$12.16  for  London, 
with  a  primage  of  10  per  cent  and  a  .var  surtax  of  25  per  cent  in  each  case.  Now  a  new 
line  is  quoting  a  new  rate  to  New  York  of  §14.60,  with  a  primage  of  10  per  cent  and  a  war 
surtax  of  25  per  cent,  making  the  rate  •S2.44  more  to  New  York  direct  than  to  London, 
although  New  York  is  much  nearer  to  New  Zealand  than  London,  and  entirely  without 
the  war  zone. 

These  matters  quite  seriously  affect  trade  with  the  United  States,  and  are  quite  a 
handicap  that  should  be  overcome  if  possible. 

I  have  the  honor  to  be,  sir,  your  obedient  servant, 

(Signed)  Alfred  A.  Winslow, 

American  Consul  General. 

Secretary  Redfield.  I  have  a  statement  also  from  our  commercial 
attache  to'^our  minister  in  China  which  is  of  quite  recent  date,  being 
dated  December  28.  It  appears  that  unless  an  American  concern 
declines  to  sell  to  an  enemy  of  Great  Britain — in  China  not  in  a 
belligerent  country,  but  an  enemy  residuig  m  China — the  consular 
authorities  of  Great  Britain  threaten  to  put  this  firm  on  the  blacklist, 
and  unless  the  orders  are  canceled  this  means  that  British  ships  will 
not  accept  cargoes  from  that  firm  and  will  not  advance  it  credit,  and 
so  on.  A  parcel  was  shipped  by  an  American  manufacturer  to  Shang- 
hai via  Wells  Fargo  Express  Co.  It  comprised  American  goods 
shipped  on  an  American  steamer  and  through  an  American  and  con- 
signed to  a  German  subject  in  China.  The  agent  of  Wells  Fargo  &  Co., 
Shanghai,  being  British,  was  obliged  to  withhold  the  delivery  of  this 
parcel.  Thus  the  consignee  could  not  secure  it  without  the  consent 
of  the  British  consul,  which  it  appears  has  not  been  given.  The 
British  white  and  black  lists  are  published  for  the  benefit  of  British 
merchants  and  all  warned  to  have  no  business  wdth  those  whose  names 
appear  on  the  blacklist.  Ordinarily  speaking,  the  only  recourse  for 
an  American  fu'm  on  the  blacklist  is  to  go  to  the  British  consulate  with 
a  sworn  statement  that  he  will  no  longer  have  any  business  flavoring 
of  enemy  taint. 

As  the  American  firms  have  to  depend  in  China  upon  other  than 
American  shipping  or  banking  facilities,  the  majority  must  come  to 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      129 

'^.ompl3dng  with  the  British  orders  sooner  or  later,  if  they  woiikl  eoii- 
iniie  to  do  business  in  China.  Where  British  consignees  are  permit- 
ed  to  take  delivery  of  goods  on  their  own  responsibility,  xlnierican 
firms  are  often  obliged  to  disprove  *'  enemy  taint '"  before  such  delivery 
is  permitted.  Cases  are  cited  by  our  consuls  of  goods  of  American 
manufacture  having  been  accepted  by  British  ships  in  the  United 
States  for  shipment  to  China  and  after  arriving  there,  because  of 
suspicion  of  being  ultimately  destined  for  German  consumers  or 
German  merchants,  held  by  the  British  authorities,  pending  proof  of 
lack  of  "enemy  taint." 

In  other  words,  without  multiplying  these  cases,  our  dependence 
at  sea  is  being  enforced  by  those  who  can  do  so  in  their  own  interests, 
because  we  need  to  use  their  means  of  transit,  and  none  of  us,  as 
Americans,  can  ship  on  our  own  ships  to  any  very  large  degree.  We 
are  carrying  more  than  we  did.  We  are  carrying  11  per  cent  or  12 
per  cent,  but  with  small  exceptions  we  are  in  hands  which  while  we 
can  not  call  them  unfriendly,  are  not  primarily  acting  in  our  interests 
but  are  primarily  acting  in  their  own. 

Mr.  Byrnes.  Whom  did  I  understand  vou  to  say  held  the  package 
up? 

Secretary  Redfield.  It  was  held  up  right  in  China  by  an  agent  of 
the  express  compan}^,  who  was  a  British  subject. 

Mr.  Edmonds.  The  express  company  is  an  American  company  i 

Secretary  Redfield.  Yes;  but  the  agent  was  British.  It  merely 
illustrates  the  processes  they  use  as  to  American  goods. 

The  Chairman.  That  is,  under  the  enforcement  of  their  enemy 
shipping 

Secretary  Redfield.  Yes;  trading  with  the  enemy  act. 

Mr.  Edmonds.  Will  you  tell  us  whether  the  special  rates  given 
to  the  Japanese  over  the  Manchurian  railroads  have  been  stopped  ? 

Secretary  Redfield.  I  do  not  know. 

Mr.  Cltrry.  This  particular  package  is  an  American  article, 
shipped  by  an  American  manufacturer,  on  an  American  ship  through 
an  American  express  company  ? 

Secretary  Redfield.  Yes. 

Mr.  Curry.  This  shipping  bill  would  have  nothing  to  do  with  that  * 

Secretary  Redfield.  No;  it  illustrates  a  method  of  holdup. 

Mr.  Curry.  The}^  hold  it  on  the  other  side  after  it  arrives  ? 

Secretary  Redfield.  They  refuse  shipment,  and  by  reason  of 
the  supervision  exercised  over  neutral  ships,  the  goods  have  to 
remain  there.     We  are  in  that  embarrassing  position. 

Mr.  Curry.  That  is  pretty  close  to  an  unfriendly  act. 

Secretary  Redfield.  Here  is  a  statement  concerning  the  shipment 
of  enameled  ware  to  Buenaventura,  Colombia,  in  which  there  appears 
to  have  been  a  discriminatory  rate  in  favor  of. Great  Britain  as  com- 
pared with  the  United  States,  and  without  reading  it  I  will  put  it  in 
the  record. 

(The  communication  follows:) 


130      SHTPPIXG  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

United  States  Department  of  Commerce, 

Bureau  of  Foreign  and  Domfstic  Commerce, 

January  Jfi.  1916. 

KXEIGHT   rates   FROM    ENGLAND   TO    SOUTH   AMERICA. 
ChIEV   iiUREAL     OF    FOREIGN   AND    DOMESTIC   COMMERCE, 

Department  of  Commerce. 
Sir:  In  reply  to  your  letter  of  the  16th  ultimo,  relative  to  a  shipment  of  enameled 
ware  by  the  lirra  of  "Albert  Hurt  &  Co.,  of  New  Orleans,  and  the  suggestion  that  freight 
charge.?  on  this  shipment  were  excessive  as  compared  with  freight  rates  from  Great 
Britain,  I  beg  to  advise  that  I  have  obtained  the  following  information  as  to  the  rates 
in  question  as  they  were  on  December  15  last: 

At  that  time  the'rate  to  Buenaventura,  Colombia,  was  62s.  6d.  per  ton,  and,  according 
to  the  method  of  measurement  of  enameled  ware,  the  shipment  by  Hurt  &  Co.  would 
probably  have  been  taxed  at  the  rate  of  Ih  tons,  the  classification  of  such  products 
being  double  the  actual  weight.  In  addition  to  the  freight  rate  of  62s.  (id.,  there  was  a 
surcharge  of  10  per  cent,  with  an  additional  overtax  of  lO'per  cent,  the  latter  tax  having 
been  increased  to  20  per  cent  within  the  last  three  weeks.  This  would  work  out  at 
about  S27.25,  while  the  present  rate  would  be  nearly  $30.  It  is  possible  that  the 
classification  made  use  of  in  New  Orleans  is  not  identical  with  that  in  effect  here. 
This  might  make  the  rate  practically  the  same  as  that  charged  for  a  shipmer)!  from 
England  to  Colombia. 
Respect  full  v. 

A.  H.  Baldwin, 
American  Comm.ercial  Attache.    . 

Socretaiy  Redfield.  I  h-dxe  here  a  very  inti resting  coDimunication 
from  {ho  German-x\mcrk?n  Button  Co.,  j^eople  of  good  chrr-icter, 
and  a  large  concern  m  Rochester,  X.  Y.  Tliey  go  fully  mto  this 
question  of  discriminatory  freight  rates,  and  ihcy  point  out  that  the 
success  of  our  commerce  for  which  there  has  never  been  !^-o  great  an 
opening  r;s  there  is  at  present,  depends  upon  the  speeds  dev(^lo]nng 
o^  American  shipping,  and  they  say  here : 

Under  such  conditions  it  appears  that  the  manufacturers  of  the  United  States  are 
not  only  now,  but  will  be  after  the  close  of  the  war,  practically  at  the  mercy  of  the 
foreign  Governments  as  regard  their  freight  rates  and  shipping  accommodation  unless 
some  steps  are  taken  by  our  Government  either  to  sub.eidize  steamship  companies  or 
to  form  steamsliip  companies  which  will  be  controlled  by  our  Government  in  the 
nterests  of  our  manufacturers  and  exporters. 

(Tlie  letter  follows:) 

Rochester,  N.  Y..  February  7.  1916, 
The  Hon.  Wm.  C.  Redfield, 

Secretary  Commerce,  Washington,  D.  C. 

Dear  Sir:  The  Department  of  Commerce  has  been  for  some  time  past  very  active 
in  urging  the  manufacturers  of  this  country  into  a  foreign  business  on  well-laid-out 
and  carefully  analyzed  plans  so  as  to  provide  for  its  future  growth  and  development. 
A  great  deal"  of  interest  has 'been  shown  by  the  manafacturers  at  large  and  also  a  great 
deal  of  progress  lias  been  made,  as  is  indicated  by  statistics  of  exports  to  many  differ- 
ent countries. 

There  is  one  phase  of  the  situation,  however,  in  wliich  the  Departrnent  of  Commerce 
does  not  seem  to  take  such  an  active  interest,  which,  to  our  minds,  is  one  of  the  most 
essential  features  if  the  manufacturers  and  exporters  of  tliis  country  are  expanding 
into  the  foreign  fields  with  a  view  of  the  future  growth  and  development  of  the  foreign 
commerce  of  this  Nation  rather  than  for  "present-time "  business.  That  to  which  we 
refer  is  the  great  lack  of  sliipping  accommodations  and  the  unreasonably  liigh  freight 
rates  it  is  necessary  to  pay  when  one  has  finally  been  able  to  secure  accommodations 
for  a  shipiaent.  this  lack  of  shipping  accoinmodations  is  felt  especially  whenit  is 
necessary  to  forward  shipments  to  Australia  or  New  Zealanl,  v,diile  the  exhorbitant 
freight  rates  applv  to  sliipments  destined  to  practically  any  part  of  the  globe. 

We  know  that  nothing  can  be  gained  by  citing  our  own  individual  cases,  because 
they  are  only  trivial  as  compared  to  the  many  others  who  are  having  the  same  trouble, 
but  for  the  "sake  of  illustration  we  shall  give  four  incidents  that  have  occurred  just 
recently  in  connection  with  our  business. 


SHIPPIN(4  BOARD,  NAVAr.  AUXILIARY,  AND  MERCHANT  MARINE.      131 


Date  ot  shipment  Date  shipments 

from  Rochester  Destination  of  goods.  finally  cleared  Freight  rate  paid, 

to  New  York.  fiom  New  York. 


Dec.  21,  1915 Melbourne Jan.  29,  1916. 

Do Adelaide Jan.  31,  1916. 

Dec.  27,  1915 Sydney do 

Dec.  24,  1915 Auckland Feb.  5,  1916. 


$1.08  per  c.  f. 
S1.02  per  c.  f. 
Collect — not  known. 
SI. 18  per  c.  f. 


These  shipments  were  all  for  delivery  at  their  various  destinations  on  or  about 
January  20.  Such  delays  cause  great  dissatisfaction  on  the  part  of  foreign  customers, 
and  the  prevailing  high  freight  rates  help  very  materially  to  make  the  price  of  Amer- 
ican goods  unreasonably  high,  because  it  is  an  evident  fact  that  this  additional  cost 
of  transportation  must  ultimately  come  out  of  the  foreign  customer,  either  directly 
or  indirectly.  Therefore,  it  is  also  evident  that  these  conditions  form  a  great  handi- 
cap to  the  manufactiuer  in  the  United  States  when  endeavoring  to  expand  into 
foreign  fields  and  to  compete  with  foreign  manufacturers  or  producers  of  similar  goods. 

It  is  a  recognized  fact  that  there  is  at  the  present  time  a  hea\'y'  demand  for  manu- 
factured products  from  the  United  States  because  of  the  war.  No  one  at  this  time  can 
predict  the  outcome  of  this  deplorable  war.  but  if  the  countries  now  engaged  remain 
the  same,  or  practically  so.  geographically,  when  peace  again  prevails — as  they 
undoubtedly  will  from  all  indications  at  the  present  time — those  countries  will  again 
imaiediately  .send  their  salesmen  out  to  regain  the  position  they  once  held  in  the 
foreign  markets  of  the  world.  Latin  America  and  other  neutral  countries  will  be 
infested  with  salesmen  from  all  of  the  countries  now  at  war;  the  British  possessions, 
such  as  cited  above,  for  instance,  will  immediately  become  the  prey  of  England 
herself,  to  a  much  greater  extent  than  they  are  at  the  present  time,  and  also  of  France 
and  Italy;  and,  too.  the  interchange  of  products  among  the  allies  and  between  the 
entente  powers  will  become  brisk  also  immediately  at  the  close  of  the  war.  We 
believe  that  the  foreign  commerce  of  those  countries  can  be  regained  and  carried  on 
much  more  easily  after  the  close  of  the  war  than  the  increased  foreign  commerce  of 
the  United  States  can  be  retained.  In  explanation  of  this  statement  we  would  cite 
the  following  reasons,  which  we  believe  will  work  decidedly  to  the  advantage  of  the 
manufacturers  and  exporters  of  those  foreign  countries  and  to  the  disadvantage  of 
the  manufacturei's  and  exporters  of  the  United  States. 

First.  After  the  close  of  the  war,  even  if  shipping  conditions  do  become  somewhat 
better,  the  present  high  cost  to  our  foreign  customers  of  the  products  from  the  United 
■States,  due  to  the  terribly  high  freight  rates,  an^'  the  poor  deliv^eries  which  the  manu- 
facturers ana  exporters  in  the  United  States  have  been  giving  their  foreign  customers, 
due  to  lack  of  shipping  accommodations,  will  both  remain  very  vivid  in  the  minds  of 
the  foreign  buyers,  and  these  facts  will  carry  considerable  weight  when  they  are 
later  deciding  between  the  line  of  a  manufacturer  in  the  United  States  and  the  com- 
peting line  of  a  manufacturer  in  one  of  the  European  countries. 

Second.  Wlien  a  steamship  company  i.s  subsidized  by  a  foreign  goA'crnment,  it  serves 
the  interests  of  that  government  first  of  all.  This  is  well  illustrated  in  the  case  of  the 
Union  Steamship  Co.  TLtd.X  which  is  subsidized  by  both  the  Canadian  and  New  Zea- 
land Governments.  Since  there  are  no  regular  saiUngs  between  the  Atlantic  ports  and 
New  Zealand ,  it  might  be  possible  to  send  important  shipments  at  times  via  the  Pacific 
coast  ports  were  it  not  for  the  fact  that  the  Union  Steamship  Co.,  due  to  reasons  stated 
above,  gives  preference  to  the  bookings  of  Canadian  freight  and  handles  only  such 
reight  from  our  ports  as  it  wishes  to  fill  out  its  cargoes.  And  in  addition  to  thi.s  the 
Union  Steamship  Co.  has  practically  a  monopoly  of  the  Pacific  coast  shipping  to  New 
Zealand  and  can  charge  about  whatever  freight  rates  it  wishes. 

Under  such  conditions  it  appears  that  the  manufacturers  of  the  United  States  are 
not  only  now,  but  will  be  after  the  close  of  the  war,  practically  at  the  mercy  of  the 
foreign  governments  as  regards  their  freight  rates  and  shipping  accommodations,  unless 
some  steps  are  taken  by  our  Government  either  to  subsidize  steamship  companies  or 
to  form  steamship  companies  which  will  be  controlled  by  our  Government  in  the  in« 
terests  of  our  manufacturers  and  exporters. 

We  believe  that  the  manufacturers  in  the  United  States  do  not  generally  fear  but, 
on  the  other  hand,  rather  like  fair  competitioi  but  it  is  rather  problematical  whether 
or  not  they  will  be  keen  about  competition  ^  .jh  as  is  possible  under  the  above  condi- 
tions. 

A  great  deal  has  been  said  and  more  has  bv;en  written  on  this  subject,  and  we  are  well 
aware  that  you  are  familiar  with  these  facts,  but  this  is  simply  to  urge  r.pon  you  a  re- 
quest to  use  your  influence  to  the  greatest  extent  to  see  that  something  is  actually  done 


132      SHIPPING  BOARD,  NAVAL  AL'XILIARY,  AND  MERCHANT  MARINE. 

to  bring  about  a  betterment  of  the  existing  conditions!  It  seems  to  us  that  if  the 
country  is  to  retain  its  increased  foreign  commerce,  which  has  been  obtained  since 
the  beginning  of  the  war,  that  some  such  measures  will  have  to  be  taken  to  protect  the 
interests  of  our  manufacturers  and  place  them  on  a  fair  competitive  basis  with  the 
manuf actiu'ers  of  the  rest  of  the  world . 

It  does  but  little  good  to  urge  our  manufacturers  to  reach  out  in  an  effort  to  grasp 
the  world's  markets  only  to  find  after  business  is  secured  that  it  is  almost  impossible 
to  ship  the  goods;  or,  if  "they  can  be  shipped  within  a  reasonable  time,  only  at  such  a 
cost  that  it  means  either  a  loss  to  the  manufacturer  or  prohibitive  prices  to  the  foreign 
customer. 

Very  truly,  yours, 

Germax-Americax  Button  Co. 

R.  C.  Lamb. 

Secretary  Redfield.  Tliese  are  the  conditions  which  confronted 
us  and  the  ciuestion  was  what  we  should  do  about  them.  It  is  per- 
fectly obvious,  Mr.  Chairman,  that  something  had  to  be  done.  The 
concensus  of  opmion  of  the  country  seemed  to  be  that  something 
had  to  be  done,  that  this  was  a  matter  requiring  the  continued 
thought  of  the  best  in  civil  life  and  the  best  in  public  life  that  was 
available,  and  that  all  the  knowledge  that  both  had  should  be,  if 
possible,  condensed  into  one  board;  that  there  should  be  a  forum 
with  power  before  which  these  things  could  be  brought,  and  which 
had  authority  to  act,  and  to  my  mind  this  measure  has  that  as  its 
chief  characteristic,  that  it  does  provide  a  definite  forum  where  all 
men  may  go  into  the  open  and  be  heard,  and  which  has  at  the  same 
time  power  to  act  in  the  premises,  while  it  is  mider  the  constant 
guardianship  of  the  Executive  and  of  Congress,  So  you  will  observe 
that  the  title  of  this  bill  is  evolved  out  of  that  decision  to  estabhsh 
a  United  States  shipping  board,  and  that  is  its  single  great  feature. 

The  powers  of  this  board  were  made  broad  in  order  that  action 
might  be  taken  under  these  changing  and  difficult  circumstances 
suitable  to  the  circumstances  as  they  might  from  time  to  time  arise. 
Therefore  the  board  was  authorized  to  construct  in  American  ship- 
yards and  navy  yards — ^for  there  are  navy  yards  which  are  available 
for  merchant  construction,  which  have  never  been  used  but  which 
can  be  used,  for  example,  the  yard  at  Charleston,  where  slips  could 
be  laid  down  speedily  and  in  which  a  number  of  small  merchant 
vessels  could  be  built.  The  idea  was  for  authority  to  use  all  that 
we  had,  all  that  we  could  get,  in  the  construction  of  vessels,  and  if 
it  should  be  thought  in  their  judgment  necessary,  and  the  oppor- 
tunity should  offer,  that  they  should  be  permitted  to  purchase  or 
to  charter  a  vessel,  in  any  way  necessary  and  la^^ul,  to  get  a  vessel 
which  could  be  utilized  for  the  purposes  of  our  commerce.  I  would 
call  your  special  attention  to  the  language  on  page  4,  fine  8,  that 
these  purposes  are  to  be  exercised  ''with  a  view  to  chartering,  leas- 
ing, or  selling  such  vessels  to  any  corporation,  firm,  or  individual, 
a  citizen  or  citizens  of  the  United  States  desiring  to  use  them  m  the 
transportation  of  the  commerce  of  the  United  States."  It  is  a 
declaration  of  purposes  that  this  board  is  to  exercise  these  broad 
powers  "with  a  view"  to  utifizing  them  for  the  benefit  of  individuals, 
firms,  or  corporations  desiring  to  use  them  in  the  commerce  of  the 
United  States. 

The  Chairman,  At  that  poirt  it  was  complamed  that  this  bill  was 
Dot  as  specific  as  the  former  bill  was,  in  that  it  does  not  say  "in  the 
transportation  of  the  commerce  of  the  United  States  with  foreign 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      133 

countries     *     *     *     ai^d  with  Central  and  South  America,"  and  it 
was  thought  there  was  some  sinister  piu^pose  in  that. 

Secretary  Redfield.  Aren't  they  loreign  countries  ? 

The  CiL\.iEMAN.  Yes;  but  it  was  thought  it  would  be  an  assurance 
if  we  had  named  them  especially.  We  include  our  insular  posses- 
sions and  the  Territory  of  Alaska,  and  then  say  foreign  countries. 

Secretary  Redfield.  If  that  will  relieve  the  committee's  mind,  I 
should  be  perfectly  willing  to  have  that  inserted.  But  I  had  always 
understood  that  the  countries  of  South  America  and  Central  America 
are  foreign  countries. 

You  will  observe  that  means  are  also  provided  for  the  sale  of  these 
vessels. 

Mr.  Edmonds.  I  would  like  to  ask  a  question.  It  says  here  that 
the  board  is  authorized  to  charter,  lease,  or  sell  the  vessels  purchased 
or  chartered.     Do  you  think  that  is  right  I 

Secretary  Redfield.  Oh,  no. 

^h\  Edmonds.  That  is  what  it  says  in  the  bill,  section  4,  second 
line.  I  don't  know  whether  you  want  to  legalize  embezzlement,  but 
that  is  what  it  looks  hke. 

Secretar}^  Redfield.  I  thmk  that  could  be  safely  left  to  the  com- 
mittee. I  am  quite  sure  that  there  was  no  purpose  to  charter  a 
vessel  and  then  sell  it.     I  doubt  if  a  title  could  be  given. 

Mr.  Edmonds.  I  want  to  ask  you  a  sensible  question.  I  didn't 
suppose  }ou  put  that  in  nleaningl3^  You  have  given  these  boats  the 
privilege  of  dealing  with  the  Philippine  Islands,  the  Hawaiian  Islands 
particularly.  Supposing  you  chartered  an  English  vessel,  how  would 
you  give  it  the  privilege  of  trading  under  our  registry  laws  with  the 
Hawaiian  Islands  or  with  porto  Rico  ? 

Secretary  Redfield.  You  would  have  to  transfer  its  registry. 

Mr.  Edmonds.  How  can  you  transfer  the  registry  of  a  chartered 
vessel  ? 

Secretary  Redfield.  I  shall  have  to  put  that  up  to  the  solicitor, 
Mr.  Thurman. 

Mr.  Thurman.  That  is  the  only  way  he  could  do  it.  Whether  it 
would  do  it  or  not,  I  do  not  know. 

-    Secretary  Redfield.  He  would  have  to  consent  to  the  transfer  of 
his  flag. 

Mr.  Edmonds.  How  could  he  put  it  on  a  chartered  vessel? 

Secretary  Redfield.  Not  without  the  consent  of  the  owner. 

Mr.  Edmonds.  He  v\'ould  have  to  put  it  under  the  American  flag. 

Secretary  Redfield.  He  could  not  do  it. 

Mr.  Edmonds.  I  think  he  could  not,  and  yet  you  mention  it  in 
there. 

The  Chairman.  How  is  that? 

Mr.  Edmonds.  I  am  trying  to  find  out  how  you  can  charter  an 
English  vessel  under  this  bill. 

The  Chairman.  You  could  not  put  an  English  vessel  under  an 
American  flag  simply  by  chartering  it. 

Mr.  Edmonds.  Then  they  could  not  deal  with  the  Hawaiian  Islands 
nor  with  Porto  Rico. 

The  Chairman.  Who  could  not  ? 

Mr.  Edmonds.  Those  vessels. 

Tlie  Chairman.  What  vessels? 

Mr.  Edmonds.  That  were  not  under  the  American  flag. 


134      SHIPPING  BOABD,  NAVAL  AUXILIARY,  AND  MEECHANT  MARINE, 

The  Chairman.  I  presume  we  could  charter  a  vessel  under  an 
American  flag. 

Mr.  Edmonds.  I  am  talking  about  foreign  vessels. 

The  Chairman.  I  don't  think  that  could  be  done  unless  they  were 
vessels  belonging  to  an  American  citizen  or  an  American  corporation. 

Mr.  Edmonds.  I  just  wanted  it  explained.  That  is  what  the  solic- 
itor said.  A  little  further  along  in  section  6  you  are  requiring  that 
all  vessels  chartered  should  be  registered  or  enrolled  under  the  laws 
of  the  United  States.  Therefore  you  are  prohibiting  absolutely  from 
chartering  or  leasing  uny  foreign  vessel.  I  was  wondering  where  you 
expected  to  get  your  vessels  from  quickly. 

The  Chairman.  There  would  not  be  any  foreign  vessels  now. 

Mr.  Edmonds.  That  is  true. 

The  Chairman.  I  had  in  mind  all  the  time  that  it  was  American 
vessels. 

Mr.  Thurman.  This  bill,  which  would  specifically  authorize  the 
enrollment  and  the  registry  of  a  foreign  vessel  under  the  American 
fla^,  would  have  the  effect,  as  I  take  it,  of  repealing  any  other  pro- 
vision preventing  that. 

Mr.  Edmonds.  In  other  words,  then,  we  could  lease  an  English 
ship.     I  think  we  could  under  this  bill. 

Mr.  Thurman.  I  think  you  could. 

Mr.  Edmonds.  Of  course,  this  bill  is  not  made  for  the  time  of  the 
war.  There  would  be  a  time  come  when  the  provision  would  be 
useful  or  not  useful. 

Mr.  Thutjman.  Under  this  bill  I  think  you  could  charter  a  foreign- 
built  ship  and  put  it  under  the  American  flag,  but  could  not,  under 
this  bill,  use  it  in  coastwise  trade. 

Mr.  Edmonds.  Does  your  department  agree  to  that  ?  > 

Secretary  Redfield.  Yes.  I  call  your  attention  to  the  fact  that 
vessels  would  not  under  the  provisions  of  this  bill  be  authorized  to 
trade  in  coastwise  trade,  because  the  bill  limits  it  to  vessels  constructed 
in  United  States  shipyards. 

Mr.  Edmonds.  But  I  know  the  Hawaiian  Islands  have  been  con- 
sidered coastwise  trade,  and  they  have  been  taken  out  of  the  coast- 
wise line  and  put  in  a  class  by  themselves. 

Mr.  Thltiman.  They  coidd  trade  there,  not  from  port  to  port. 

Mr.  ED:\roNDS.  But  we  are  applying  the  coastwise  provision  to  all 
vessels.     I  suppose  j'ou  w\]l  have  to  treat  all  vessels  alike. 

Mr.  Thurman.  That  is  correct. 

The  Chairman.  Of  course,  that  is  why  the  question  will  have  to  be 
exan:iined  with  some  care,  and  I  do  not  understand — at  least,  that  is 
not  my  construction  of  the  bill — that  foreign-built  ships  brought  under 
American  legistry  under  the  provisions  of  this  bill  can  be  used  for 
coastwise  trade. 

Secretary  Redfield.  Now,  pardon  me  just  a  moment.  That  is 
the  proviso  to 

Mr.  Edmonds.   That  is  the  proviso  under  section  4,  page  5,  line  20. 

The  Chairman.  Now,  there  is  this  exception  generally  under  the 
provisions  of  this  bill,  that  these  vessels  may  be  used  in  the  foreign 
trade — 

Provided,  That  A'es.sels  constructed  in  American  slu]>yards  and  na,\'j  yards  under 
the  provisions  of  this  act  may  be  chartered,  leased,  or  sold  to  any  such  corporation, 
firm,  or  indi\ddual,  a  citizen  or  citizens  of  the  United  States,  for  use  in  the  coastwise 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      135 

trade  of  the  United  States,  particularly  the  trade  between  the  Atlantic,  Gulf,  and 
Pacific  coasts. 

Now,  that  would  include,  of  course,  all  of  the  coastwise  trade  of 
Porto  Rico  and  the  Hawaiian  Islands,  because  they  are  included  in 
coastwise-trade  laws  of  the  United  States.  I  do  not  understand, 
under  the  provisions  of  this  bill  as  it  is  written,  that  a  foreign-built 
ship  brought  under  American  registry  can  be  employed  in  the  coast- 
wise trade;  that  is,  in  the  coastwise  trade  or  between  Porto  Rico 
and  the  Hawaiian  Islands. 

Mr.  Edmonds.  But  right  in  that  section  right  before  that  you  say 
that  these  foreign  charters,  chartered  or  constructed  by  the  United 
States,  can  be  used  with  the  Hawaiian  Islands  and  Porto  Rico,  and 
after  that  you  say,  provided  that  they  can  go  in  the  Atlantic, 
Gulf,  and  Pacific  coastwise  trade.  Certainly,  you  have  excepted 
from  the  coastwise  trade  Hawaii  and  Porto  Rico.  You  have  put 
them  in  a  class  by  themselves — in  the  class  of  foreign  trade — and 
excepted  them  for  American-built  ships  in  Atlantic,  Gulf,  and  Pacific 
trade. 

The  Chairman.  That  is  a  question  that  we  ought  to  consider  very 
carefully. 

Mr.  Hardy.  I  don't  think  there  is  any  trouble  about  it.  It  is 
clear  that  vessels  chartered  by  this  coimtry  may  be  used  in  trade 
of  every  kind,  in  the  foreign  trade  and  with  that  of  Alaska  and  that 
of  the  Hawaiian  Islands. 

Mr.  Edmonds.  These  are  the  exceptions.  But  I  want  to  get  our 
understanding  of  the  position  of  the  matter  while  these  gentlemen 
are  here.  We  are  taking  them  out  of  the  coastv/ise  trade  and  putting 
them  in  the  foreign  trade  in  this  bill,  Alaska,  the  Panama  Canal  Zone, 
the  Philippine  Islands,  the  Hawaiian  Islands  or  the  Islands  of  Porto 
Rico,  Guam,  and  Tutuila. 

Mr.  Hardy.  So  far  as  these  vessels  are  concerned,  if  the  vessel  is 
budt  here  although  it  belongs  to  a  foreign  corporation,  it  can  trade. 

Mr.  Edmonds.  But  it  can't  trade  with  Atlantic,  Pacific  and  Gulf 
coasts.     1  only  wanted  to  bring  that  out  for  the  sake  of  argumen 
in  the  committee  later  on. 

Mr.  Hardy.  I  don't  think  there  is  any  trouble  about  the  interpre- 
tation of  it. 

Mr.  Edmonds.  I  just  want  to  get  the  interpretation  of  the  attorney 
on  it  so  we  may  know  how  we  are  commg  on. 

Mr.  Hardy.  Some  suggestion  has  been  made  that  under  this  bill 
you  could  charter  a  foreign  built  vessel.  I  think  you  can,  but  it 
would  be  limited  to  foreign  trade. 

Mr.  Edmonds.  You  could  charter  a  foreign  vessel  under  this 
bill? 

Mr.  Hardy.  I  think  so. 

Mr.  Edmonds.  They  say  you  can. 

Secretary  Redfield.  I  think  on  cjuestions  of  law  I  shall  have  to 
ask  Mr.  Thurman,  our  solicitor,  to  answer.  I  am  not  competent  to 
do  so. 

There  are  certain  features  put  in  the  bill  for  defuiite  purposes. 
Take  the  provision  in  section  5,  which  is  intended  to  provide  that 
vessels  belonging  to  the  United  States  for  other  service  and  idle  may 
be  utilized  temporarily  in  the  commerce  of  the  United  States.  It 
has  been  a  very  gaUing  fact  to  us  to  have  lymg  at  anchor,  unused, 


136      SHIPPING  BOARD,  NAVAL  AUXILIAKY,  AND  MERCHANT  MARINE. 

half  a  dozen,  perhaps  more  or  less,  large  vessels  belongmg  to  the 
Government  when  we  have  no  legal  power  to  use  them.  We  could 
have  utilized  them  to  carry  coal  to  Spain  to  a  market  which  was 
otherwise  closed.     That  is  the  purpose  of  section  5. 

Mr.  RowE.  Have  you  any  idea  how  many  vessels  ? 

Secretary  Redfield.  I  think  6  transports. 

The  Chairman.  And  we  have  those  vessels  belonging  to  I  lie  Ignited 
States  and  are  not  permitted  to  use  them  ? 

Secretary  Redfield.  You  will  recall,  Judge  Hardy,  that  we  sent  a 
collier  to  Europe  to  take  goods  from  the  Mediterranean,  to  San  Fran- 
cisco exposition,  and  another  collier  to  take  goods  back  from  the 
exposition.  We  have  no  power  whatever  to  do  that  for  our  com- 
merce. These  vessels  are  at  times  idle.  Dr.  Pratt  just  hands  me 
now  a  conununication  from  our  consul  in  the  Canary  Islands,  advising 
of  the  arrival  there  of  the  Chilean  transport  with  a  full  cargo  from 
Chile  to  the  Islands.     Chile  is  ahead  of  us. 

The  Chairman.  W"e  might  tramp  on  some  one's  toc^  if  v.e  used  our 
own  things  for  our  own  good. 

Secretary  Redfield.  These  vessels  are  vessels  that  would  be  ad- 
mitted in  the  coastwise  trade. 

Mr.  Edmonds.  Couldn't  we  have  the  use  of  those  vessels  by  a 
resolution  ? 

Secretary  Redfield.  You  could. 

The  Chairman.  Have  we  American-built  vessels  that  are  not  al- 
lowed to  carry  freight  ? 

Secretary  Redfield.  Yes;  we  have  magnificent  colhers,  and  they 
are  vessels  that  we  can  not  use  in  commerce  at  all.  We  have  no  legal 
power  to  do  so. 

Mr.  Byrnes.  Congress  could  authorize  the  Secretary  of  the  Navy  ? 

Secretary  Redfield.  Or  the  President.  The  President  should  be 
authorized  with  the  Secretary  of  the  Navy,  or  the  ^^-my. 

Ml".  Edmonds.  A  little  legal  question  there,  on  hue  19,  section  5, 
"The  President  is  hereby  authorized  to  charter,  lease,  or  sell"  such 
vessels.     Would  that  authorize  the  board  to  sell  such  vessels  ? 

Secretary  Redfield.  I  think  those  two  vessels  of  the  Panama 
Raihoad  Co. 

Mr.  Edmonds.  No;  everything  in  the  j:)aragraph,  as  I  understand  it. 
I  don't  think  the  Navy  Department  would  want  to  let  you  have  many 
ships. 

Mr.  Tiiurman.  They  can  always  be  taken  back.  The  President  is 
authorized  by  the  bill  to  take  them  back  at  a  fair  valuation. 

Mr.  RowE.  Just  like  the  English. 

Mr.  Hardy.  It  is  not  right  to  suppose  that  the  different  branches 
of  the  admijiistration  will  not  work  together. 

Secretary  Redfield.  I  remember  that  word  "sell"  caused  a  little 
discussion,  but  it  seemed  necessary  that  the  board  should  have 
broad  powers  and  not  be  tied  up. 

Mr.  Hardy.  And  the  Secretary  of  the  Navy  is  on  the  board  ? 

Secretary  Redfield.  Yes. 

Mr.  Hardy.  He  would  hardly  sell  his  ships  against  his  own  interests. 

Mr.  Thurman.  There  is  an  amendment  going  in  which  is  not  in 
this  printed  bill.  It  provides  that  the  proceeds  from  the  sale  of  all 
ships,  instead  of  being  covered  into  the  Treasury,  shall  go  back  to  the 


SHIPPINC  BOaKD,  naval  AUXILIARY,  AND  MERCHANT  MARINE.      137 

board  to  be  used  for  the  purposes  of  the  act.  In-  other  words,  if  a 
vessel  is  sokl  the  money  can  be  used  to  replace  it. 

Mr.  CuBRY.  That  is  the  British  system. 

The  Chairman.  Yes. 

Secretary  Redfield.  There  is  a  question  at  this  point  which  I 
would  like  to  call  attention  to.  I  am  not  perfectly  certain  that  sec- 
tion 5  provides  clearly  that  the  vessels  of  the  Panama  Railroad  Co., 
if  used  by  the  board,  should  be  iiiuler  the  control  of  the  board.  There 
ought  to  be  no  question  of  divided  control,  as  to  whether  the  War 
Department  or  the  shipping  board  should  cojitrol  rates  and  things 
of  that  kind,  and  if  there  is  any  doubt  in  your  judgment,  in  the  judg- 
ment of  the  committee,  it  ought  to  be  cleared  up.  They  should  be 
under  the  control  of  one  or  the  other. 

The  Chairiman.  Line  15  says  that  they  are  to  be  transferred  to  the 
board. 

Secretary  Redfield.  Yes;  the  vessels  are.  But  the  right  of  mak- 
ing rates.     I  suggest  the  thought,  that  is  all. 

Mr.  Edmonds.  Panama  to  be  subjected  to  the  rate,  I  suppose,  the 
same  as  anybody  else  ? 

Secretary  Redfield.  I  suppose  so.  I  just  want  it  to  be  clear  in 
your  minds. 

The  Chairman.  1  haven't  gotten  the  thought  yet. 

Secretary  Redfield.  I  thought  there  should  be  no  question  arising 
in  case  the  vessels  of  the  Panama  Railroad  were  taken  over  for  any 
purpose,  any  question  of  doubtful  or  double  jurisdiction  between  the 
War  Department,  and  the  shipping  board,  as  regards  the  manage- 
ment and  control  and  fixing  of  rates,  etc.,  on  those  freight  vessels. 

The  Chairman.  It  seems  to  me  that  it  is  quite  clear  that  when 
they  are  taken  over  by  the  shipping  board  that  they  are  in  control  of 
that  board  for  all  purposes. 

Secretary  Redfield.  That  is  what  I  want  to  be  exact  about. 

The  final  clause  on  page  9  of  section  6  requirmg  the  consent  of 
the  board  to  sell  or  transfer  to  foreign  registry,  arose  from  the  fact 
that  foreign  buyers  are  buymg  American-built  ships  now  on  the 
stocks  and  incomplete.     Several  such  have  recently  been  purchased. 

Mr.  Hardy.  You  mean  putting  them  under  foreign  flags  ? 

Secretary  Redfield.  Yes. 

Mr.  RowE.  You  mean  those  two  in  California  ? 

Secretary  Redfield.  No;  three  on  the  Atlantic  coast.  These  were 
ships  contracted  for  by  Americans,  intended  for  American  use. 

Mr.  Hardy.  Incidentally,  have  any  of  these  Governments  got  any 
laws  regarding  ships  built  in  America  being  registered  under  their 
flags  ? 

Mr.  RowE.  England  has  not. 

Secretary  Redfield.  That  is  what  is  happening.  Now  every  other 
important  maritime  country  has  laws  forbidding  the  transfer  of  ships 
from  its  flag  without  its  authority. 

Mr.  RowE.  Is  that  so  in  time  of  peace  ? 

Secretary  Redfield.  That  is  so  now. 

Mr.  Hardy'.  They  just  reverse  our  process.  We  forbid  them  com- 
ing to  our  country  except  in  a  limited  way  ? 

Secretary  Redfield.  Yes. 

^Ir.  Curry.  Mr.  Secretary,  isn't  it  true  that  recently  Great  Britain, 
France,  Germany,  Austria-Hungary,  Sweden,  Norway,   and  Brazil 


138      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

had  absolutely  prohibited  the  transfer  of  any  of  their  shipping  to  a 
foreign  flag? 

Secretary  Redfield.  I  think  that  is  correct. 

Mr.  Edmonds.  Was  that  recently? 

Mr.  Curry.  It  is  a  war  measure. 

Mr.  Edmonds.  A  temporary  war  measure  ? 

Mr.  Curry.  A  permanent  proposition. 

Mr.  RowE.  Wouldn't  it  tend  to  stop  the  building  of  ships  in 
American  yards  if  a  man  was  limited  to  sell  to  Americans  ? 

Mr.  CuRiiY.  What  is  the  use  of  building  up  our  shipping  if  we  are 
to  sell  to  foreigners  ? 

;Mr.  Edmonds.  We  have  in  Wilmington  to-day  three  ships  building 
for  the  British-American  Oil  Co.  Under  this  law  they  would  not  be 
able  to  sell  them  ? 

Secretary  Redfield.  Let  me  think  a  moment. 

Mr.  Thurman.  They  are  not  registered  as  American  vessels  ? 

Mr.  RowE.  But  they  are  building  in  our  yards. 

The  Chairman.  I  don't  think  that  bill  covers  that  case. 

Mr.  Edmonds,  How  would  they  go  out  of  our  ports  ? 

Secretary  Redfield.  As  Enghsh  ships. 

Mr.  Edmonds.  Would  they  get  an  English  registry  here  ? 

Secretary  Redfield.  Yes;  through  the  English  consul.  I  don't 
know  what  the  detail  of  the  procedure  is. 

Mr.  Chamberlain.  They  get  a  temporary  registry  until  they  get 
back  to  England. 

Mr.  Edmonds.  There  would  be  no  trouble  at  all. 

Mr.   CiLVMBERLAiN.  No,  uonc  whatever. 

The  Chairman.  They  can  have  as  many  ships  built  as  they  please. 

Mr.  Curry.  I  want  to  show  that  there  is  no  chance  under  this  law 
or  any  other  for  the  United  States  to  lease  or  buy  foreigji  ships. 

Mr.  Edmonds.  This  is  a  bill  for  the  future. 

Secretary  Redfiei-d.  As  far  as  those  nations  are  concerned. 

Mr.  Edmonds.  I  want  to  ask  another  question  on  that  feature: 
Does  this  affect  any  of  our  treaty  rights  in  any  way  ? 

Secrettuy  Redfield.  I  think  not. 

Section  8  is  the  provision  providing  that  the  board  may  form  a 
corporation  or  corporations  for  the  purpose  of  carrying  out  the  pro- 
visioris  of  this  act  if  it  shall  be  necessary  to  do  so.  You  will  observe, 
Mr.  Chahman,  that  this  must  be  interpreted  in  the  hght  of  the 
declared  purposes  of  the  measure  in  section  3,  that  essential  purpose 
being  that  the  board  is  formed  '•with  a  view  to  charteruig,  leasmg, 
or  selling  such  vessels  to  anj'  corporation,  firm,  or  individual,  a 
citizen  or  citizens  of  the  United  States."  It  is  necessary  to  carry 
out  the  purpose  of  this.  In  other  words,  as  I  understand  it,  we  have 
the  pur])oses  for  which  the  board  is  formed.  If  the  purposes  can  not 
be  carried  out  otherwise,  if  it  is  necessary,  then  the  board  may  form 
a  corporation  or  corporations  for  the  purpose  herein  described. 

The  Chairman.  That  is,  that  some  individual,  firm,  or  corporation 
would  say,  "We  will  lease  these  ships,  or  we  vnM  charter  these  sliips,  or 
buy  these  ships,  but  on  our  owaa  terms.  We  wiU  take  them  and  we 
will  enter  them  in  trade  to  meet  the  demands  of  American  commerce." 
Now,  if  you  omit  section  8,  it  would  simply  place  it  in  their  power  to 
dictate  their  terms  to  the  board. 

Secretary  Redfield.  Absolutely. 


.       SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARIKE.      139 

The  Chairman.  /Viid  this  section  8  simply  reserves  to  the  Govern- 
ment, to  the  board,  the  power  to  enforce  reasonable  terms  on  which 
these  ships  may  be  operated. 

Secretary  Redfield.  Yes.  And  you  will  observe  it  is  further  safe- 
guarded in  the  authorization  in  the  final  words  that  they  may  at  any 
time  part  with  the  stock  of  the  corporation  thus  owned. 

There  are  sections  of  the  world,  Mr.  Chairman,  in  which  it  is  very 
important  that  American  commerce  should  go,  but  to  which  it  may 
not  for  a  time  be  possible  that  a  private  individual,  firm,  or  corpora- 
tion should  be  able  to  carry  it.  Now,  the  altcu-native  without  this 
clause  would  simply  be  that  it  would  not  go,  and  we  do  not  feel — I  do 
not  feel-- that  we  should  in  substance  put  an  estoppel  upon  its  going 
by  refusing  to  give  the  board  the  power  in  such  an  emergency  to  make 
it  possi})le  for  it  to  go.  That  is  the  whole  story,  to  my  mind.  This 
bill  carries,  as  its  avowed  purpose,  the  assisting  of  firms  and  corpora- 
tions in  the  development  of  American  commerce.  That  is  what  it  is 
for.  Now,  if  they  can  not,  as  in  the  case  just  suggested,  if  they  can 
not,  th'  n  this  j)ow(  r  is  h(  Id  in  reserve.  It  is  um  re  ly  the  expression  of 
a  i)ow('r  which  always  exists,  and  it  is  expr'  ^^^sly  )irovid(  d  that  it  may 
sell  stock  of  such  corporations  that  ai\>  so  friiu(  d  at  any  time,  and 
tliis  should  be  taken  in  tlie  light  of  a  stateuK  nt  made  formally  by  the 
President  to  Congress,  that  any  procedure  of  this  kind  would  be  of 
temporary  character;  that  anything  else  would  be  a  false  interpreta- 
tion. 

Mr.  Byrxes.  What  objection  have  you  to  including  that  state- 
ment or  something  to  that  effect  in  the  bill  ? 

Secretary  Redfield.  None,  so  far  as  I  am  concerned,  if  it  can  be 
so  done  as  not  to  involve  a  limitation  which  might  be  very  unfor- 
tunate at  some  unforeseen  time  and  some  unforeseen  occasion. 

Mr.  Byrnes.  As  to  the  operation  and  limitation  upon  the  operation. 

Secretary  Redfip:ld.  Yes;  in  length  of  time. 

Mr.  Byrnes.  What  would  be  the  objection  to  the  limitation  of 
five  years,  say  at  the  close  of  this  present  war?  Wliat  is  your 
objection  ? 

Secretary  Redfield.  My  only  thought  would  be  this:  I  hesitate 
to  put  a  limitation  imder  circumstances  of  which  we  can  not  now 
know.  Putting  a  limitation  on  the  unlvno\Am  is  a  thing  which  as  a 
matter  of  practice  I  hesitate  to  do.  Here  is  a  body  acting  in  the 
open.  That,  to  my  mind,  is  the  greatest  of  all  limitations.  It  is  an 
open  book,  an  open  forum,  and  it  can  only  act  with  the  approval  of 
the  Executive.  It  has  another  limitation.  It  must  act  responsibly 
in  the  matter;  it  comes  again  in  the  presence  of  Congress,  which  in  a 
few  months  at  the  most  can  discuss  the  whole  matter  and  remove 
the  conditions.     It  can  not  escape  these  threefold  checks. 

Mr.  Byrnes.  Yes.  The  checks  are  ample  if  the  object  was  to 
establish  a  permanent  corporation;  but  if  it  is  to  be  of  a  temporary 
character,  and  that  is  the  idea,  what  is  the  objection  to  making  it 
certain  that  it  is  temporary  by  putting  some  limitation  ? 

Secretary  Redfield.  I  can  oiilv  say  that  I  should  be  afraid  of  some 
unknown  difficulty  arising  under  it. 

Mr.  Hardy'.  Among  the  unknown  difficulties  might  it  not  be  an 
unreasonable  result  that  if  the  life  of  this  corporation  was  known  and 
it  was  sought  to  sell  these  vessels,  interested  parties  might  take  advan- 
tao:e  of  that  limit  and  force  them  to  sell  ? 


140      SHIPPING  BOABD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.       . 

Secretary  Kedfield.  Yes. 

Mr.  Byrnes.  Suppose  we  did  this,  limit  the  corporation  but  do  not 
limit  the  time  in  which  the  equipment  can  be  sold  I 

Mr.  Hardy.  Then  you  would  have  to  sell  for  nothino;  to  keep  our 
vessels  out. 

Mr.  Byrnes.  Wouldn't  it  be  based  upon  the  idea  that  when  you 
sold  in  the  open  market  you  could  get  a  ])etter  price  ? 

Mr.  Hardy.  You  might  have  a  falling  market. 

Secretary  Redfield.  You  see,  this  is  a  corporate  operation,  not  a 
Government  operation.  The  board  is  not  authorized  to  operate.  It 
is  a  corporation  which  the  private  interests  are  supposed  to  operate 
if  need  be.  Frankly,  I  am  afraid  of  the  limitation.  If  you  could  get 
assurance  that  there  never  should  be  such  causes,  that  there  never 
should  be  any  emergencies  arising,  that  capital  would  always  be  forth- 
coming— if  that  could  be  assured  in  anyway — then,  of  course,  there 
iv^ould  be  no  necessity. 

But  there  are  cases,  unquestionably,  where,  either  temporarily  or 
perhaps  in  some  places  permanently,  private  capital  could  not  of  itself 
alone  always  do  the  work. 

IVIr.  Byrnes.  The  object  is  to  make  it  permanent? 

Secretary  Redfield.  I  do  not  mean  it  to  be  understood  in  that 
way.  I  mean  that  there  might  be  a  port,  for  example,  a  single  port, 
to  which  private  capital  could  hardly  afford  to  run  a  line  of  vessels. 
But  while  that  might  always  be  so,  it  might  become  possible  to  link 
that  up  with  other  ports  so  that  a  line  could  run  for  such  a  time  as 
was  necessary  to  get  the  thing  moving,  and  this  would  give  an  op- 
portunity^ of  getting  it  going,  and  then  it  could  be  turned  over  to  the 
Erivate  interests  which  are  most  competent  to  handle  it.  I  think  you 
ave  got  to  interpret  this  in  the  light  of  the  intention,  the  expressed 
purpose  of  section  3,  ''with  a  view  to  chartering,  leasmg,  or  selling 
such  vessels  to  any  corporation,  firm,  or  individual,  a  citizen  or  citi- 
zens of  the  United  States,  desiring  to  use  them  in  the  transportation 
of  the  commerce  of  the  United  States." 

Take  the  port  of  Vigo,  Spain.  It  might  well  happen  that  a  fruit 
line  could  not  undertake  to  go  to  Vigo,  Spain.  There  is  not  enough 
of  it.  But  from  developments  now  progressing  it  is  highly  important 
to  have  vessels  going  there.  In  due  time  private  interests  will  come 
along  that  can  not  go  to  Vigo  but  will  go  to  Barcelona  and  Cadiz,  and 
will  take  over  that  Vigo  vessel.     That  is  my  idea. 

Mr.  Byenes.  Suppose  such  a  declared  purpose  was  included  in  the 
bill  some  way,  would  it  not  be  quite  reassuring  to  private  lines. 

Secretary  Redfield.  That  is  a  question,  I  think,  of  the  committee's 
judgment 

;\ii'.  Byrnes  (continuing).  Not  to  be  used  in  competition  on  the 
line,  but  to  develop  a  line  between  two  ports  such  as  you  have 
mentioned. 

Secretary  Redfield.  Isn't  that  the  statement  of  section  3  ? 

IMi".  Byrnes.  Perhaps  it  is. 

Secretary  Redfield  [reading].  "And  military  purposes,  with  a 
view." 

The  Chairman.  As  I  understand  you,  ^Mr.  Secretary,  you  do  not 
want  to  fix  a  time  limit  because  to  do  so  you  might  destroy  the  very 
efficacy  of  the  act,  and  defeat  the  purposes  we  have  in  view,  of  giv- 
ing to  American  commerce  ample  facilities  and  provide  trade  routes 


SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      141 

whore  private  vessel  owners  would  not  be  willing  to  enter  for  the 
time  being.  We  might  say  two  years,  and  while  we  are  in  the  very 
midst  of  the  development  of  that  trade,  the  time  limit  comes,  and 
the  effort  is  lost. 

Mr.  Byrnes.  In  other  words,  it  might  not  be  a  definite  time  before 
the  line  would  be  taken  up  by  the  individual  owner? 

Secretary  Redfiei.d.  Quite  so. 

Mr.  Burke.  IMr.  Secretary,  in  your  opinion,  would  the  including 
of  a  time  limit  in  this  bill  wJien  this  shipping  board  would  go  out  oi 
existence,  have  a  tendency  to  retard  the  develo}nnent  of  commerce 
in  the  lines  in  which  you  put  these  ships. 

Secretary  Redfield.  I  think  so.  I  would  not  subscribe  any  stock 
in  a  corporation  wliich  had  to  expire  at  a  fixed  time. 

Mr.  Burke.  Isn't  it  also  true  that  there  might  be  instances  where 
customers  in  foreign  countries  might  refuse  to  patronize  these  lines 
because  they  were  only  temporary  lines  ^oing  out  of  existence  in 
three  years  or  five  years,  whatever  the  limitation  might  be  ?  It 
strikes  me  it  might  hnvo  a  tondenc}^  to  retard  the  development  of 
commerce  along  those  lines. 

Mr.  Edmonds.  My  opinion  woukl  be  that  you  should  pass  a  bill 
without  a  time  limit  in  it. 

Secretary  Redfield.  You  see  to  establish — take  the  case  of  Vigo 
again — to.  establisli  a  line  to  Vigo  moans  the  investment  of  a  large 
sum  of  money  for  buildings,  docks,  etc.  Now  if  the  thing  is  subject 
to  a  certainty,  and  at  the  end  of  five  yeai*s  some  private  interest  is 
not  read}^  })ut  it  has  got  to  stop  anyway,  I  doubt  if  any  one  would 
build  the  docks. 

^Ir.  Byrnes.  The  idea  is  that  you  want  to  carry  to  the  people  of 
Vigo  the  assurance  that  it  is  not  to  be  temporary  ? 

Secretary  Redfield.  So  far  as  the  line  is  concerned. 

Mr.  Byrnes.  Carry  with  it  the  assm*ance  that  Congress  may  do 
with  it  as  it  pleases  later  on. 

Mr.  Hardy.  And  that  the  line  will  be  established  as  promised. 

^Ir.  Byrnes.  That  the  Government  will  maintain  it  until  private 
capital  comes  in. 

Mr.  Curry.  Do  you  feel  sure  that  private  capital  will  invest  in  this 
corporation  under  the  provisions  of  the  bill  ? 

Secretary  Redfield.  No.  You  put  a  very  strong  question  to  me. 
I  can  not  be  sure  of  that. 

!Mi\  Curry.  Then  it  looks  very  much  as  if  it  was  the  enactment  of 
a  permanent  law  for  permanent  Government  ownership  ? 

Secretary  Redfield.  No;  not  at  all.  It  is  expressly  provided 
that  at  any  time  it  may  sell. 

Mr.  Hardy.  That  is,  assuming  that  we  want  to. 

Secretary  Redfield,  Yes,  of  course.  Here  is  a  company  doing 
a  certain  fine  of  business,  and  they  have  developed  a  good  business 
in  theu'  line  and  have  a  large  trade.  At  the  end  of  a  isw  years  the 
business  has  become  highly  profitable.  It  has  become  highly  profit- 
able while  we  maintained  a  boat  line.  Then  we  had  to  sell  out  and 
the  business  is  lost. 

Mr.  Curry.  If  it  is  good  for  .5  or  10  years  it  might  be  good  for 
perpetuity. 

vSecretary  Redfield.  But  you  can  not  escape.  It  all  has  the 
supervision  of  Congress. 

32910—16 ^10 


142      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Edmonds.  If  I  can  ask  you  a  legal  question  again,  exactly  what 
liability  the  Government  would  have  in  these  chartered  vessels  in 
case  of  accident. 

Mr.  Thurman.  It  would  depend  entirely  upon  the  agreement  that 
you  made  with  the  charter,  that  you  might  make  with  the  vessel 
from  whom  you  lease. 

Mr.  Edmonds.  ^Vlien  you  lease  a  vessel,  who  supplies  the  crew  ? 
Woald  you  be  liable  for  any  damages  occasioned  by  that  vessel? 

Mr.  Thurman.  I  assume  so.  This  chartering  does  not  carry  with 
it  the  necessity  of  taking  the  old  form  of  charter.  We  do  not  have 
to  take  the  crew  with  it. 

Mr.  Edmonds.  Isn't  there  any  Jiavigation  law  with  regard  to 
chartering  a  vessel  ? 

Mr.  Thueman.  I  do  not  thhik  there  is. 

Mr.  Chamberlain.  No. 

Mr.  Edmonds.  Then  it  would  depend  entirely  on  the  character  of 
the  contract  which  was  made  ? 

Mr.  Chamberlain.  We  do  not  assume  any  liability  that  comes 
along.     That  is  true. 

Secretary  Redfield.  The  provisions  as  to  preferential  rates,  page 
11  at  the  bottom.  The  board  has  the  power  to  do  that  as  a  means 
of  overcoming  such  preferential  rates  on  the  part  of  our  competetors 
against  us.  This  is  how  it  operates.  A  manufacturer  in  Germany 
desiring  to  compete  with  an  English  manufacturer  in  South  America 
on  application  received  at  45  per  cent  reduction  in  freight  rates 
through.  That  is  the  habitual  practice,  and  has  been  used  as  a  very 
potent  means  in  the  hands  of  our  foreign  competitors  against  Ameri- 
can business,  and  this  is  meant  to  give  to  this  board  power  in  the 
event  that  such  rates  shall  be  necessary  to  protect  foreign  commerce 
of  the  United  States,  or  to  give  authority  to  make  such  preferential 
rates. 

Mr.  Edmonds.  This  would  also  give  the  board  the  privilege  of 
making  a  minimum  rate  in  case  they  wanted  to  fill  out  a  cargo  with 
some  freight  that  was  going  to  be  carried  from  port.  I  notice  you 
follow  Mr.  Raker  very  closely  in  this  biU. 

Mr.  Thurman.  The  book  was  written  after  the  bill. 

Secretary  Redfield.  The  form  of  preferential  rates  is  a  regular 

{)ractice  with  the  German  Government.  Two  German  steamship 
ines,  the  German  East  Africa,  and  the  German  Levant  lines,  are 
granted  largely  reduced  rates  on  goods  on  through  bills  of  lading  for 
Africa  or  the  Levant.  The  system  was  introduced,  the  former  in  1890 
and  the  other  in  1895.  It  is  a  very  common  thing  in  American  ex- 
port trade  to  run  against  preferential  rates  granted  by  the  Govern- 
ment-owned roads  in  Germany. 

Mr.  Kincheloe.  Is  there  any  other  country  which  has  a  law 
like  or  similar  to  this '( 

Secretary  Redfield.  In  this  respect? 

Mr.  Kincheloe.  In  the  encouragement  of  the  merchant  marine. 

Secretary  Redfield.  I  know  of  nothing  that  is  like  it. 

Mr.  Lowe.  England  has  a  board  which  has  very  extensive  power 
over  their  ships. 

Mr.  Kincheloe.  Is  there  any  other  country?  Is  there  any  other 
country  in  the  world  which  has  a  law  similar  to  this  ? 

Mr.  Chamberlain.  I  don't  know  of  any. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      143 

Ml-.  KiNCHELOE.  Is  there  aii}^  country  in  the  world  that  has 
absohitely  Government-owned  vessels? 

Mr,  Chamberlain.  Yes;  there  are  a  number  that  have  Govern- 
ment-owned vessels. 

Mr.  Curry.  Brazil? 

Mr.  Chamberlain.  Brazil  is  an  example  w^hich  is  suggested. 
Brazil  had  lieavy  subsidies  and  the  line  got  so  embarrassed  the 
Government  had  to  take  it  over. 

Mr.  KiNCHELOE.  All  her  vessels? 

Mr.  Chamberlain.  I  mean  only  the  Lloyd-Brazilian  line.  Then, 
the  Roumanian  Government,  in  connection  w4th  its  railways,  has  its 
own  steamships,  with  two  branches,  one  that  runs  up — or  did  before 
the  war — runs  up  to  Dutch  ports  and  to  Antwerp,  and  another  that 
runs  in  the  Black  Sea,  to  Constantinople  principally,  and  the  Mediter- 
ranean. Then,  the  Government  of  South  Australia  had  a  small  fleet, 
I  think  there  were  only  two,  possibly  three,  small  steamers  operate'd 
as  a  Government  venture. 

The  Chairman.  Does  the  Russian  Government  have  any  ? 

Mr.  Chamberlain.  No;  the  Russian  volunteer  fleet  is  not  a  Gov- 
ernment institution,  although  the  relations  are  very  close.  It  was 
organized  when  there  was  a  possibility  of  w^ar  between  England  and 
Russia  and  a  number  of  wealthy  Russians  raised  the  money  to  buy  a 
fleet  of  vessels,  and  that  has  been  continued  ever  since,  but  it  is  really 
a  private  company,  just  as  any  other  steamship  company,  but  it 
receives  very  liberal  subsidies  from  the  Russian  Government.  The 
Government  pays  the  tolls  on  these  ships  when  they  go  through  the 
Suez  Canal. 

Mr.  KiNCHELOE.  What  has  been  the  present  increase  on  freight 
rates  from  this  country  to  England,  Germany,  and  HoUand  since  this 
.war  began  ? 

Mr.  Chamberlain.  1  do  not  know.  I  think  this  committee  had 
the  figures  last  year. 

The  Chairman.  I  am  having  Dr.  Pratt,  who  is  Director  of  the 
Bureau  of  Foreign  and  Domestic  Commerce,  collect  that  data.  (See 
page  772.) 

Mr.  KiNCHELOE.  Much  obliged. 

Mr.  Hardy.  Along  the  line  just  stated  by  the  Secretary,  I  should 
like  to  ask  him  if  it  be  a  fact  that  Germany  has  given  on  her  Govern- 
ment-owned railroads  special  rates  to  goods  brought  in  German  ships. 
Isn't  that  a  close  shave  to  a  violation  of  the  treaty  between  Germany 
and  the  United  States  insuring  equal  treatment? 

Secretary  Redfield.  You  have  got  the  wrong  man  to  answer  that. 
I  am  not  a  lawyer. 

Mr.  Hardy.  You  have  a  great  deal  of  power  of  analysis.  A  con- 
cession is  made  here  which  amounts  to  a  remission  of  tonnage  dues, 
to  the  grant  of  special  rates,  and  it  seems  very  clearly  a  discrimination. 

Secretary  Redfield.  There  is  no  question  of  the  German  habit  of 
giving  preferential  rates  on  their  railways.  I  had  never  considered 
the  question  of  its  being  a  violation  of  the  most  favored-nation  clause 
of  the  treaty. 

Mr.  Hardy.  It  is  certainly,  I  think  we  w^ill  all  agree,  a  discrimi- 
nation. 

Secretary  Redfield,  But  the  case  that  I  spoke  of,  a  45  per  cent 
reduction  of  freight  rates,  was  all  done  within  a  day.     There  was  no 


144      SHIPPING  :^OAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

question  of  a  hearing.  It  was  regular  routine.  That  happened  to 
be  the  German  branch  of  an  American  concern. 

I  find  that  Russia  makes  a  loan  to  the  volunteer  fleet  free  of  mterest 
for  the  acc^uisition  of  six  new  steamers.  That  is  their  form  of  caring 
for  them.  The  Roumanian  Government  maintains  not  only  two 
lines  of  steamers  but  also  a  line  of  river  steamers  on  the  Danube 
owned  and  operated  by  the  Roumanian  Government. 

Mr.  RowE.  England  has  loaned  2^  per  cent. 

Secretary  Redfield.  Yes.  I  should  not  see  any  particular  occa- 
sion for  the  German  Government  to  give  a  freight  subsidy  or  any 
government  paymg  a  subsidy. 

Mr.  Hardy.  But  the  English  Government  does  not  pay  any  sub- 
sidy to  freight  lines. 

Mr.  Edmonds.  That  is  why  the  Germans  have  built  up  their  trade 
and  the  English  haven't. 

Mr.  Hardy'.  Yes. 

Secretary  Redfield.  There  is  one  important  provision  on  behalf 
of  American  commerce  in  this  section  which  I  have  had  personal 
experience  with,  and  that  is  the  provision  in  Hue  17.  authorizing  ship- 
ments for  specific  sailings.  There  is  one  of  those  little  things  that 
plan's  havoc  with  American  business  at  times.  A  factory  shipping 
from  the  interior,  let  us  say,  for  example,  taking  a  shipment  of  mining 
machinery  from  a  concern  in  Denver  for  South  America.  It  is  the 
condition  now  that  they  can  not  ship  to  catch  a  certain  vessel. 
Raih'oad  companies  are  forbidden  to  receive  goods  to  catch  a  certain 
vessel.  The  reason  of  that  is  because  if  they  do  so  they  may  be  held 
in  an  action  at  law  if  they  fail  to  do  so,  and  the  Interstate  Commerce 
Commission  thought  that  was  a  form  of  rebate  and  forbids  the  whole 
thing.  That  is  important.  It  is  frequently  the  case  that  there  is  a 
ship  only  once  a  month,  and  if  the  goods  do  not  arrive  they  are  held 
up  three  or  four  weeks.  There  is  serious  damage,  and  if  the  goods 
are  perishable  they  are  sometimes  destroyed.  It  is  one  of  the  mean 
Uttle  obstacles  in  the  way  of  the  ordinary  flow  of  trade,  which  ought 
to  be  as  free  from  those  things  as  possible.  This  was  put  hi  to  remove 
that  handicap.  It  frecpiently  amomits  to  this,  that  if  you  can  not 
ship  perishable  goods  with  a  certainty  that  they  will  catch  a  steamer, 
you  v.'ould  not  try  to  get  the  business.  That  is  why  this  was  put  in 
here. 

Mr.  Hardy'.  Does  the  Interstate  Commerce  Commission  hokl  that 
they  can  not  make  provision  that  it  must  reach  its  destination  at  a 
certain  date. 

Secretary  Redfield.  I  can  not  saj.  Thej  will  not  allow  them  to 
ship  for  a  certain  sailmg.  You  want  to  get  a  bill  of  lading  to  be  for- 
warded by  a  certain  steamer.  You  can  not  advise  your  correspondent 
in  South  America  that  the  goods  will  be  there  on  a  certain  sailing. 

Mr.  Hardy'.  As  I  understand  it,  if  the  companj^  is  ^viUing  to  under- 
take the  shipment,  and  it  is  an  honest  contract,  there  ought  to  be  no 
objection  to  it? 

Secretary  Redfield.  None  whatever. 

There  is  under  section  10  the  license  fee,  the  fact  about  which  Mr. 
Douglas  spoke  this  morning,  and  in  view  of  the  very  arbitrary  treat- 
ment of  shippers  in  our  ports  by  steamship  lines  of  all  countries,  I 
think  it  is  high  time,  if  we  admit  them,  as  we  always  will,  to  the  great 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE,      146 

benefits  to  be  derived  from  our  commerce,  that  we  should  establish 
the  condition  under  which  they  shall  be  so  entered. 

The  Chairman.  If  we  deepen  our  harbors  and  extend  our  docks, 
we  ought  to  have  some  contribution. 

Secretary  Redfield.  And  Mr.  Thurman  tells  me  that  this  is  con- 
stitutional. I  want  you  to  think  of  the  condition  a  man  would  be 
in  who  has  a  large  supply  of  lumber.  He  goes  to  them  and  they  say 
they  do  not  care  to  ship  it.  They  had  a  contract  to  do  it,  but  they 
don't  care  to  keep  it.  It  was  better  to  break  the  contract  than  to 
carry  the  goods.  There  have  been  many  cases  of  that  kind  where 
goods  have  been  delivered  to  the  seaport  and  the  steamship  company 
says  they  won't  take  them. 

They  exercised  the  right  (which  would  put  any  railroad  man  in 
jeopardy)  to  say  not  only  the  rate  the}^  shall  take  them  at,  but 
whether  they  shall  take  them  at  all  or  not.  That,  it  seems  to  me,  is 
an  intolerable  condition,  and  we  ought,  as  the  Chairman  says,  if  we 
admit  them  at  large  expense  to  ports  which  we  prepare  and  light 
and  chart  and  maintain  at  large  Government  expense,  to  have 
something  to  say  about  the  terms  on  which  they  shall  use  these  ports. 
There  ought  to  be  some  guarantee  of  equitable  treatment  to  all 
Americans  alike. 

Mr.  Byrnes.  Do  you  think  the}^  ought  to  be  restricted  by  agree- 
ment to  certain  rates  ? 

Secretary  Redfield.  Oh,  no;  I  did  not  say  that. 

Mr.  Byrnes.  I  was  wondering  about  it. 

Mr.  Thltrman.  I  can  not  recall  the  exact  book  or  page,  but  the 
general  proposition  is  that  the  Government  has  control  over  the 
commerce  in  the  ports  of  the  United  States 

Mr.  Hardy.  Is  it  not  absolutely  essential  that  both  foreign  and 
domestic  trade  shall  be  subjected  to  the  same  rules  and  regulations  ? 

Secretary  Redfield.  Undoubtedly. 

Mr.  Hardy.  Otherwise  there  would  be  a  discrimination  in  favor 
of  foreign  vessels  ? 

The  Chairman.  I  think  it  is,  however,  wholly  impracticable  ior 
this  board,  if  created,  to  make  specific  rates  and  require  them  to  be 
filed  with  the  board. 

Mr.  Rowe.  Mr.  Redfield,  what  other  countries  have  license? 

Secretary  Redfield.  Great  Britain — just  established. 

Mr.  Rowe.  That  is  just  recently.     Has  Germany  ? 

Secretary  Redfield.  I  do  not  know.  Perhaps  Mr.  Chamberlain 
does. 

Mr.  Chamberlain.  They  have  particular  license  for  a  particular 
line  of  trade  between  foreign  ports. 

Mr.  Edmonds.  Every  vessel  or  every  firm  ?  Does  the  board  require 
a  firm  to  license  or  a  vessel  to  have  a  license  ? 

Secretary  Redfield.  It  says  "firm,  or  corporation,  or  individuals." 

Mr.  Edmonds.  What  would  you  do  with  respect  to  a  tramp  ship  ? 

Secretary  Redfield.  That  is  a  question  that  came  up  this  morn- 
ing, and  that  I  suppose  would  have  to  come  under  a  regulation  in  the 
form  of  what  might  be  called  a  "temporary  permit."  I  think  that  is 
a  matter  of  administration. 

Mr.  Edmonds.  Have  vou  an  idea  of  charging  for  this  license  ? 


146      SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Thurman.  I  think  it  Avould  be  up  to  tho  board,  which  would 
make  rules  and  regulations. 

Secretary  Redfield.  Here  is  th(^  situation  as  it  stands  to-day, 
Mr.  Edmonds. 

Take  the  product  of  the  Southwark  Foundry  &  Machine  Works, 
or  the  Sugar  Refining  Co.,  on  the  Philadelphia  water  front,  say,  to 
the  Baldwin  Locomotive  Works,  ''No;  we  do  not  care  to  carry  your 
stuff."  That  sort  of  thing  has  happened.  It  actually  happened  that 
the  Baldwin  Locomotive  Works  was  refused  transportation  and  had 
to  go  out  and  get  its  own  ship  in  order  to  get  its  goods  delivered  to 
South  America.  They  are  arbitrary  about  it.  A  man  shipped  a  lot 
of  goods  from  central  Pennsylvania  down  to  Baltimore,  and  they 
told  him  they  did  not  want  to  take  it,  and  left  it  on  the  dock,  and  he 
had  it  all  sent  back. 

Mr.  Edmonds.  We  have  some  woolen  goods  manufactured  in 
Philadelphia  and  can  not  get  it  out.  The  Scandinavian  Line  will  not 
take  them. 

Secretary  Redfield.  That  is  what  this  license  is  for,  to  give  us 
some  control  over  the  situation. 

There  are  in  the  United  States  Navy  at. the  present  time  24  fuel 
ships,  with  a  combined  cargo  capacity  for  carrying  over  132,000  tons 
of  coal  and  38,000  tons  of  fuel  oil.  I  am  advised  that  half  of  this  fleet 
could  be  spared  at  this  time,  as,  owing  to  a  deficiency  in  the  appro- 
priation for  their  maintenance,  it  will  very  soon  be  necessary  to  tie 
them  up.  There  have  been  times  this  year,  Mr.  Chairman,  when,  if 
we  could  have  had  three  of  those  ships  to  carry  coal  to  Spain,  we 
could  have  had  business  which  did  not  exist. 

Mr.  Edmonds.  Does  this  condition  still  exist  ? 

Secretary  Redfield.  Yes. 

Mr.  Edmonds.  I  do  not  see  why  we  could  not  put  a  resolution 
through  transferring  those  vessels  to  the  Department  of  Commerce. 

Mr.  Price.  Is  it  your  construction  that  barges  or  schooners  plying 
between  States  will  have  to  take  out  a  license  ? 

Secretary  Redfield.  Yes,  I  think  so.    Coastwise  vessels,  you  mean  ? 

Mr.  Price.  Yes, 

Secretary  Redfield.  Yes. 

Mr.  RowE.  If  you  put  a  license  on  foreign  ships  you  realize  they 
will  compel  us  to  do  the  same  thing  on  American  ships  to  foreign 
ports  very  shortly  ? 

Secretary  Redfield.  Very  likely. 

Mr.  RowE.  Will  it  not  be  a  grat  deal  of  embarrassment  to  shippers, 
and  give  them  a  good  deal  of  trouble? 

Secretary  Redfield.  They  want  our  business.  Our  commerce  is 
the  great  prize  of  the  ocean. 

Mr.  Rowe.  But  it  works  both  ways;  they  have  the  ships. 

Secretary  Redfield.  You  have  got  to  depend  on  the  board  to 
exercise  ordinary  sense.  It  is  up  to  them.  If  they  got  arbitrary 
and  behaved  badly,  I  take  it  Congress  woidd  remove  the  power. 

Mr.  Hadley.  What  additional  element  of  control  has  the  Secretary 
concluded  would  be  authorized  over  foreign  owners  imder  a  license 
system?     He  spoke  o^  that  a  moment  ago. 

Secretary  Redfield.  I  can  find  it  very  hard  to  say  in  detail,  but 
I  can  see  what  it  would  be  aimed  at.  I  can  see  the  object  to  be 
accomplished,  but  it  h  a  good  deal  to  jump  right  in  and  say  how 


SHIPPING  BOARD,  NAVAL  AUXIJ.TARY,  AND  MERCHANT  MARINE.      147 

I  would  accomplish  it.  I  think,  however,  we  ought  to  stop  by  the 
license  feature  the  arbitrary  exercise  on  the  part  of  any  steamship 
company  as  to  which  American  citizen  they  will  oblige  by  taking 
his  goods  and  which  they  will  not  oblige  by  refusing  his  goods,  too. 
I  should  aim  a  license  feature  at  that. 

Mr.  Hardy.  In  other  words,  you  think  if  those  vessels  were  required 
to  have  a  license  our  administration  might  require  them  to  treat  all 
customers  equally? 

Secretary  Redfiei.d.  Exactly. 

Mr.  Hardy.  Or  else  revoke  their  license  and  destroy  their  privilege 
of  doing  business  in  our  ports  ? 

Secretary  Redfield.  I  should  object  to  an  arbitrary  clause  in  bills 
of  lading  in  aimual  contracts  which  permitted  a  power  not  at  war 
whenever  for  its  own  convenience  it  saw  fit  to  withdraw  its  ships 
without  notice.  That  is  what  happened  to  the  man  in  Winona,  with 
his  flour.  I  do  not  think  that  ought  to  be  permitted.  If  we  give  our 
great  and  profitable  business,  and  if  we  give  them  the  use  of  our  ports, 
I  think  they  should  give  reasonable  notice. 

The  Chairman.  If  some  line  should  use  fighting  ships  to  prevent 
competition,  you  would  add  that  to  the  conditions,  that  they  should 
discontmue  that  practice  ? 

Secretary  Redfield.  Quite  so,  and  it  would  give  us  the  same  con- 
dition of  control,  I  am  reminded,  over  these  international  conferences, 
these  quiet  gettmgs  together. 

The  Chairman.  It  might  include  this  provision  that  no  foreign 
ships  or  general  ships  trading  from  American  ports  should  practice  or 
engage  in  the  practice  of  deferred  rebates  ? 

Secretary  Redfield.  Yes;  all  that  whole  thing.  It  might  prevent 
unfair  discrimmation  between  ports. 

The  Chairman.  And  between  individuals  ? 

Secretary  Redfield.  And  between  individuals,  and  between  ports. 
You  can  easily  see  there  is  a  broad  field  for  a  firm  but  entirely  just 
and  well-balanced  regulation  there. 

Mr.  Hardy.  Would  that  be  possible  as  a  regulation,  without  a  law 
to  back  it  up  ?  For  instance,  the  prohibition  against  discrimination 
between  ports  ? 

Secretary  Redfield.  This  is  the  law.  They  have  power  to  pres- 
cribe the  terms  of  those  licenses. 

Mr.  Hadley.  Would  not  about  the  only  element  of  final  action  that 
could  be  imposed  by  law  be  the  forfeit  of  the  license  ? 

Secretary  Redfield.  Ah.  But  they  could  not  be  cleared  without 
the  license;  that  winds  them  up. 

Mr.  Hadley.  It  cuts  them  out  of  business;  that  would  be  the  ulti- 
mate language  of  the  law  ? 

Secretary  Redfield.  Yes;  they  could  not  be  cleared. 
Mr.  Edmonds.  We  have  a  lot  of  wool  and  yarn  in  Philadelphia 
that  can  not  be  shipped  to  Scandinavia  because  the  Scandinavian- 
American  Line  will  not  take  it.     That  is  one  of  these  cases  you  have 
spoken  of? 

Secretary  Redfield.  Yes. 

Mr.  Edmonds.  If  we  had  an  American  ship  and  we  loaded  it  on, 
what  would  happen  to  it  ? 

Secretary  Redfield.  Now  ?  I  do  not  think  it  would  have  any  diffi- 
culty; it  would  go  right  straight  through. 


148      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Edmonds.  It  would  go  right  straight  through? 

Secretary  Redfield.  I  think  so. 

Mr.  Edmonds.  Has  not  England  prevented  thp  import  of  a  large 
amount  of  material  to  Scandinavian  countries  ? 

Secretary  Redfield.  On  the  part  of  neutrals  ? 

'Mr.  Edmonds.  On  the  part  of  neutrals. 

Secretary  Redfield.  I  think  not;  not  noncontraband  goods. 

Mr.  RowE.  They  have  an  agreement  with  Nonvay  thafthey  are 
only  to  be  used  in  their  country,  and  that  would  be  a  limited  amount. 

Secretary  Redfield.  And  the  vScandanavian  steamship  lines  ac- 
ceded to  that  agreement.  It  would  be  up  to  the  American  lines  to 
say,  No :  we  will  not  accede  to  your  agreement.     Why  should  we  ? 

Mr.  RowE.  They  are  not  contraband? 

Secretary  Redfield.  Under  those  circumstances  our  country  could 
carry  it  straight  through.     I  think  there  is  no  difficulty  about  it. 

Mr.  RowE.  I  will  tell  you,  Mr.  Secretary,  you  spoke  here  about  us 
getting  together  and  not  having  any  politics,  and  I  am  agreed  there 
ought  not  to  be  any  politics,  but  I  want  to  ask  you  a  question:  To 
accomplish  in  a  round-about  way  exactly  what  we  would  accomplish 
as  near  as  we  can  see  if  we  gave  a  subsidy  *    . 

Secretary  Redfield.  I  do  not  think  the  subsidy  has  ])een  a  howling 
success. 

Ml".  Edmonds.  We  are  going  to  utilize  a  great  deal  of  money,  and 

{)robably  going  to  utilize  more  money  as  time  goes  along,  in  paying  the 
osses  of  these  hues  or  the  losses  of  ships  in  the  operation  thereof.  If 
we  were  to  subsidize  a  line  of  steamers  at  the  present  day,  going  to 
South  America  to  ports  that  we  wanted,  could  we  not  by  close  super- 
vision of  that  line  find  out  it  was  making  profits,  keep  it  on  a  reduced 
subsidy  until  we  got  the  amount  of  money  put  up  by  the  taxpayers 
to  the  minimum  ? 

Secretary  Redfield.  That  is  not  the  result  of  experience,  Mr. 
Edmonds.  The  Japanese  lines  are  heavily  subsidized,  and  they  pay 
the  dividends  out  of  the  subsidies  and  run  at  a  loss.  They  are  under 
the  strictest  kind  of  regulation.  I  hold  in  my  hand  Senate  Docu- 
ment 152,  which  gives  the  details.  They  are  under  a  degree  of 
supervision  that  would  frighten  us,  I  am  afraid.  The  passenger 
fares  and  freight  charges  are  subject  to  the  approval  of  the  ministry 
of  state.  He  may  specify  the  kinds  of  passengers  and  of  cargo  for 
which  the  charges  are  to  be  reduced.  It  goes  into  a  minute|detail 
of  regulation. 

Mr.  Edmonds.   A  subsidy  of  about  $1,300,000? 

Secretary  Redfield.  A  very  large  subsidy,  and  their  dividends 
are  paid  out  of  it.     They  run  at  a  loss. 

Mr.  Edmonds.  While  I  was  in  Japan,  the  newspapers  there  stated 
that  the  Toyo  Kish;;n  Kaisha  Co.  intended  to  go  out  of  business, 
but  when  they  heard  the  Pacific  Mail  Steamship  Line  went  out  of 
business  they  stayed  in,  so  that  they  could  charge  us  more  for  our 
stuffs  and  bring  their  own  back  cheaper. 

Secretary  Redfield.  In  1906,  1908,  1909,  1910,  1911,  and  1912 
the  dividends  were  paid  out  of  the  subsidies. 

Mr.  RowE.  If  the  Government  had  run  it,  they  would  have  run  it 
at  a  loss  and  paid  thek  own  losses  ? 

Secretary  Redfield.  No;  the  Government  is  not  concerned  in  the 
operations  of  the  vessels  under  this  bill.  These  vessels  are  run  by 
individuals,  firms,  and  corporations  in  private  business. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      149 

Mr.  RowE.  If  the  corporation  loses  money,  it  is  organized,  and  it 
is  United  States  money;   have  you  not  got  to  stand  it? 

Secretary  Redfield.  In  the  first  place,  that  can  not  take  place 
until  after  the  whole  object  of  the  bill  has  failed,  because  nobody 
else  can  be  fomid  to  do  it. 

Mr.  RowE.  Mr.  Secretary,  suppose  you  can  not  lease  your  vessels, 
because  they  would  rather  run  under  the  English  flag  or  under  the 
Norwegian  flag,  on  account  of  labor  conditions,  and  you  can  not 
lease  your  vessels,  you  have  got  to  run  them;  you  can  pay  a  rate  of 
interest  ? 

Secretary  Redfield.   No:  I  do  not  see  that  you  have. 

Ml".  Rowe.   What  are  you  going  to  do  with  them? 

Secretary  Redfield.  I  do  not  quite  understand  where  they 
would  come  from  in  the  first  place. 

Mr.  Rov/e.  You  are  building  vessels  with  the  idea  of  leasing 
them  ? 

Secretary  Redfield.  I  do  not  ivuow  v.iiat  I  should  do  as  a  mem- 
ber of  that  board,  but  I  am  very  much  inclined  to  think  that  just  as 
I  would  not  build  a  factory  without  some  reasonable  expectation  of 
having  use  for  it,  so  I  would  not  go  aher.d  and  charter  ships  unless 
some  reasonable  expectation  of  use  existed.  They  have  got  to 
exercise  ordinary  business  judgment  as  a  board. 

Mr.  Rowe.  Up  to  this  time  the  preference  has  been  to  run  under 
other  flags  of  late  years;  up  until  the  war  began  the  tendency  has 
been  that  way  strongly  ? 

Secretary  Redfield.  Yes.  Other  nations  have  developed  their 
individual  marines  more.  I  do  not  think  you  can  quite  put  it  justly 
in  that  way.  We  have  not  had  the  money  to  invest  in  this  country 
in  merchant  marine.  We  have  been  a  nation  that  has  been  getting 
a  large  part  of  its  money  from  other  people.  We  built  our  raih'oads 
with  foreign  money,  we  have  built  our  miUs  with  foreign  money,  and 
constructed  our  public  utilities  with  foreign  money;  we  borrow  for- 
eign money  for  our  cities.  The  St.  Paul  Raikoad  issued  bonds  in 
French.  We  had  to  borrow  over  five  thousand  millions  abroad. 
When  the  war  broke  out  we  owed  that  amount  of  money  abroad. 
We  have  had  no  money  with  which  to  go  ahead.  That  situation 
has  entirely  altered.  From  a  debtor  nation  we  have  become  a  credit 
nation  in  less  than  two  years.  We  now  have  the  money  to  invest 
and  the  record  shows  we  are  puttiag  it  by  chimks  into  the  merchant 
marine,  and  that  we  have  900,000  tons  buildmg  at  this  muiute. 

Mr.  Rowe.  Well,  then,  why  put  any  Government  money  in  it? 

Secretary  Redfield.  Because  we  need  more,  very  much  more. 

Mi\  Rowe.  Not  if  there  is  plenty  of  private  money? 

Secretary  Redfield.  I  ought  to  have  said — I  think  I  am  perfectly 
safe  in  saymg  that  we  are  about  400  ships  short  of  what  we  should 
need  to  keep  our  present-sized  Navy  at  sea  in  time  of  war,  and  we 
would  have  to  use  battleships  as  colliers  to  come  back  and  get  their 
own  fuel. 

Mr.  Hardy.  If  this  bill  should  become  a  law  and  the  question  of 
drivmg  private  individuals  out  of  business  comes  up,  and  those  pri- 
vate  individuals  desire  to  enter  the  business,  does  not  this  bill  give 
your  board  the  right  to  make  any  kind  of  reasonable  inducement  to 
them  to  enter  it  ? 


150      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Secretary  Redfield.  The  bill  declares  that  the  board  is  created 
for  the  purpose  of  helping  individuals,  firms,  and  corporations. 

Mr.  Hardy.  And  for  the  purpose  of  inducing  individual  enterprise 
to  go  into  it  ? 

Secretary  Redfield.  That  is  its  excuse  for  existence. 

Mr.  Hardy.  And  if  you  can  induce  individual  enterprise  to  go  into 
it  the  Government  proposes  to  stay  out,  as  I  understand  it  ? 

Secretary  Redfield.  Certainly.  The  law  says  it  is  with  the  view 
of  doing  this,  if  mdi vidua!  firms  and  corporations  do  not.  It  is  as 
plain  a  declaration  of  purpose  as  can  be  made. 

Mr.  Hardy.  And  only  m  case  you  fail  to  induce  individuals,  firms, 
or  corporations,  then  you  organize  your  corporation  ? 

Secretary  Redfield.  Of  course. 

The  Chairman.  If  there  is  a  trade  that  can  be  developed  in  the 
interest  of  American  commerce  ? 

Secretary  Redfield.  The  illustration  is  there,  that  when  it  is 
necessary  to  carry  out  the  purposes  of  the  act — the  purpose  of  the 
act  is  to  build  or  purchase  ships,  with  a  view  to  leasing,  chartering, 
or  selling  to  private  firms  or  corporations. 

Mr.  Hardy.  As  far  as  this  law  can,  it  intends  to  try  to  pursuade 
private  individuals  to  go,  with  certain  advantageous  terms,  into  the 
business  ? 

Secretary  Redfield,  So  it  says. 

Mr.  Hardy.  And  if  it  can  not,  it  will  do  it  itself  ? 

Secretary  Redfield.  So  it  says,  it  wiU  do  it  itself  just  as  plainly  as 
it  can  be  said,  to  organize  with  a  view  to  providing  this  assistance  to 
corporations,  firms,  or  individuals. 

Mr.  Hardy.  Then  why  has  private  enterprise  been  so  upset  ? 

Secretary  Redfield.  I  do  not  believe  it  is.  Judge  Hardy.  My 
own  belief  is  that  there  is  a  very  general  and  widespread  approval 
of  this  measure  without  regard  to  party  and  without  very  serious 
regard  to  interest,  and  I  think  that  Mr.  Douglass  showed  that  very 
plainly  this  morning. 

Mr.  Hardy.  And  there  is  a  pretty  fairly  well  disseminated  mis- 
representation of  the  purpose  of  the  bill? 

Secretary  Redfield.  I  think  there  is  a  fairly  disseminated  attempt 
to  make  some  portions  of  it  misunderstood.  I  think  that  we  have  a 
parallel  case  in  the  seaman's  act.  You  are  not  unfamiliar  with  the 
statement  that  the  seaman's  act  operates  to  deter  capital  from  en- 
tering into  shipping,  yet  more  vessels  have  been  ordered  constructed 
since  the  seaman's  act  went  into  effect  than  for  several  years  prior  to 
that  time. 

Mr.  Edmonds.  It  may  be  because  of  their  misunderstanding  of  the 
bill  is  the  reason  they  are  in  favor  of  it.  I  did  not  know  whether  you 
were  trying  to  get  at  that  or  not.     [Laughter.] 

Mr.  Curry.  You  stated  there  were  about  400  ships  short  for  fuel 
carriers  ? 

Secretary  Redfield.  Of  aU  kinds. 

Mr.  Curry.  Have  you  taken  into  consideration  the  privately  owned 
oil  carriers  of  the  Standard  Oil  Co.  and  Union  Oil  Co. ;  all  of  those  _? 

Secretary  Redfield.  Oh,  yes.  I  think  I  am  not  mistaken  in  stating 
they  wanted  250  colliers  alone,  and  they  wa,nted  as  many  as  possible 
of  the  oil  carriers  and  others. 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      151 

I  think,  looking  at  it  soberly,  if  we  had  to  keep  our  fighting  fleet  at 
sea,  we  are  about  400  ships  short  of  what  is  necessar}^  to  keep  them 
moving  this  minute. 

The  Chairman.  It  might  be  interesting  to  read  the  part  of  this 
clipping  from  the  New  York  Herald,  under  date  of  February  6, 
entitled  "Wlience  will  come  merchant  marine?  shipping  men  ask. 
Reported  offer  of  Pacific  Mail  Co.  to  Govei-nmert  considered  pos- 
sible," and  other  matters  of  interest.     One  feature  is  this  [reading]: 

Not  long  ago  in  a  speech  at  the  Advertising  Chib  Willard  D.  Straight,  who  was  one 
of  the  organizers  of  the  corporation,  said  that  his  purpos'^  was  to  handle  s'^curities  for 
contractors  and  others  who  desired  to  compete  with  foreign  corporations  in  obtaining 
business  abroad . 

(The  entire  newspaper  clipping  here  submitted  by  the  chairman  is 
as  follows:) 

(NTew  York  Herald,  Feb.  6, 1910.] 

Whence  Will  Come  Merchant  Marine?  Shipping  Men  Ask  -Reporte:>  Offer 
OF  Pacific  Mail  Co.  to  Government  Considered  Probable. 

A  report  that  the  newly  reorganized  Pacific  Mail  Steamship  Co..  now  under  control 
of  the  American  International  Corporation,  has  offered  to  operate  the  ships  which 
the  Government  will  purchase  if  the  850.000,000  appropriation  for  that  purpose  is 
passed  by  Congress  aroused  intense  interest  in  shipping  circles  yesterday. 

At  the'offices  of  the  International  Corporation  and  the  Pacific  Mail  Co.  confirmation 
of  the  report  was  refused,  but  shipping  men  generally  believe  that  if  no  offer  has 
been  made  directly  to  the  Government  in  connection  with  this  matter  one  will  be 
made  just  as  soon  as  the  legislation  is  passed.  It  is  admitted  that  the  Pacific  Mail 
Co.  may  not  itself  make  the  offer  nor  even  have  it  under  consideration.  However, 
the  statement  was  made  that  one  of  the  avowed  purposes  of  the  American  International 
Corporation  is  to  float  the  bonds  of  individuals  and  concerns  whose  purpose  is  to 
promote  foreign  trade. 

Not  long  ago  in  a  speech  at  the  Advertising  Club  "sVillard  D.  Straight,  who  was 
one  of  the  organizers  of  the  corporation,  said  that  its  purpose  was  to  hand'e  securities 
for  contractors  and  others  who  desired  to  compete  with  foreign  corporations  in  obtain- 
ing business  abroad.  Recalling  that  statement,  shipping  men' said  yesterday  that 
undoubtedly  the  corporation  would  back  any  reliable  company  of  representative 
maritime  men  who  might  desire  to  operate  the  Government  fleet.  Ihere  is  the 
utmost  confidence  in  shipping  circles  that  should  the  bill  pass  there  will  be  no  diffi- 
culty in  getting  a  coi-poration  to  operate  the  vessels.  As  a  matter  of  fact,  it  Avill  be 
more  difficult,  it  was  said,  for  the  Government  to  obtain  the  bottoms  than  it  will  be 
to  operate  them  successfully  after  they  have  been  obtained . 

whence  will  they  come? 

Practically  i  very  shipbuilding  yard  in  the  country  is  running  to  full  capacity  day 
and  night,  it  was  said.  Therefore  shipping  men  are  asking  whore  the  Government 
will  obtain  the  ships.  The  proposed  appropriation  can  not  purchase  more  than  40  or 
50  vessels  of  comparatively  light  tonnage,  but  even  this  number  could  not  be  built 
in  a  short  period  of  time  unless,  it  is  said,  the  Government  us'  s  the  Federal  yards  at 
Pensacola,  Portsmouth,  and  New  Orleans.  These  yards,  it  is  said,  have  been  prac- 
tically idle  for  some  time,  but  shipping  men  believe  that  if  a  large  Navy  program 
is  adopted  they  will  be  occupied  with  building  war  ships  of  the  smaller  types. 

It  is  possible  that  the  corporation  which  agrees  to  operate  the  ships  may  also  agree 
to  build  them  if  the  present  war  drags  on  indefinitely.  In  the  event  the  war  stops 
soon,  one  prominent  shipper  said  he  believed  that  it  would  be  possible  to  purchase 
that  number  of  foreign  bottoms  at  a  reasonable  price ,     He  said ; 

"Contrary  to  the  general  opinion,  which  seems  to  be  that  European  nations,  and 
especially  thos"  at  war,  are  going  to  put  all  their  merchant  ships  in  operation  to  regain 
lost  foreign  trade,  I  would  saj'-  that  I  believe  they  will  have  little  or  no  us  ■  for  a  trem- 
enduous  number  of  ships  for  s  'veral  years  after  the  war.  Those  nations  do  not  want 
to  S'dl  bottoms  now,  first,  because  they  have  us"  for  them  in  transporting  war  materials 
and,  secondly,  because  they  don't  know  justhow  trade  conditions  will  be  after  the  war. 
With  the  possible  exception  of  Germany,  who  will  need  her  foreign  trade  badly  to  recu- 


152      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

perate  from  the  effects  of  the  war,  I  believe  that  all  the  belligerent  nations  will  have 
enough  for  their  labor  to  do  in  rebuilding  their  devastated  countries  and  in  supplying 
their  own  people  with  those  necessities  of  life  and  the  luxuries  which  they  have 
been  lacking  for  some  time.     I  believe  that  there  will  be  plenty  of  ships  ol)tainable. 

BELIEVES    GERMANY    WOULD    SELL. 

"Even  Germany  isn't  going  to  jump  into  the  front  trenches  of  trade  immediately 
after  the  war.  Her  system  of  foreign  credits  is  completely  upset.  Her  merchants 
who  have  dealt  with  foreign  customers  and  extended  to  them  long  time  credits  are 
impoverished.  They  won't  be  able  to  do  an  extensive  credit  business  on  long  time 
periods  for  years  after  the  war.  I  believe  that  German  bottoms  will  be  obtainable 
in  large  numbers  when  the  hostilities  are  over." 

The  majority  of  shipping  men  seem  to  think  that  the  $50,000,000  appropriation 
ehould  be  increased  at  least  tenfold  to  do  any  material  good  in  the  effort  to  restore 
the  American  flag  on  the  high  seas.  It  was  admitted,  however,  that  the  amount 
now  stipulated  would  tend  to  stimulate  American  investments  in  shipping  enterprises. 

Another  phase  of  the  question  which  is  of  interest  is  just  what  trade  routes  the  Gov- 
ernment vessels  must  ply.  One  of  them  suggested  was  the  trans-Pacific  lane  from 
which  the  principal  American  company  recently  withdrew.  American  ships  could 
also  be  profitably  used,  it  was  said,  in  the  trade  between  the  Pacific  coast  and  the 
Far  East,  Australia,  and  Vladivostok,  Russia.  Some  of  them  should  also  be  put  in 
operation  to  the  west  coast  of  South  America  from  Atlantic  ports  and  to  the  east  coast 
from  Pacific  ports  by  way  of  the  canal. 

Secretary  Redfield.  I  think  I  can  say  from  knowledge  that  there 
is  no  opposition  on  their  part  to  this  measure. 

Mr.  Edmonds.  Do  you  think,  Mr.  Secretary,  that  the  trade  regula- 
tions here  will  meet  with  the  approval  of  the  shipping  people  or  will  it 
deter  them  ? 

Secretary  Redfield.  No  disapproval  has  been  expressed. 

Mr.  Edmonds.  Have  you  heard  any  approval  expressed? 

Secretary  Redfield.  I  can  not  say  I  have  had  any  communication 
either  way. 

Mr.  Edmonds.  1  was  just  wondermg  whether  it  might  have  a  de- 
terring effect  on  the  building  of  ships ;  whether  we  were  trymg  to  build 
up  ships  on  the  one  hand  and  knocking  them  down  on  the  other  ? 

Secretary  Redfield.  Mr.  Chairman,  may  I  just  call  attention  to 
one  or  two  other  small  matters  ? 

I  hold  in  my  hand  a  statement  sent  us  by  the  surveyor  of  the  Port 
of  San  Francisco,  givmg  the  complete  crew  and  the  steamer  list  of  an 
English  and  an  American  steamer  in  the  Australian  trade,  and  the 
amounts  are  set  side  by  side.  The  salary  list  of  the  English  vessel 
is  $4,340  a  month,  and  of  the  American  vessel  $5,705  a  month.  When 
you  come  to  reduce  that  to  the  unit  of  tons,  the  American  vessel  bemg 
a  little  bit  larger,  it  works  out  that  the  salaries  and  wages  list  of  the 
American  ship  is  $1.46  per  net  ton  and  the  English  ship  $1.79  per  net 
ton ;  so  that  any  statement  that  we  made  based  purely  upon  the  actual 
pay  roll  would  be  misleading,  until  you  come  to  figure  what  it  is  you 
get  for  your  pay  roll. 

(The  letter  and  statement  here  submitted  by  Secretary  Redfield 
are  as  follows:) 

Treasury  Department, 
United  States  Customs  Service, 

San  Francisco,  Cal.,  December  14,  1915. 
Hon.  William  C.  Redfield, 

Secretary  of  Commerce,  Washington,  D.  C. 
My  Dear  Mr.  Secretary:  Herewith  I  am  inclosing  a  crew  list  of  the  steamship 
Sonoma,  owned  by  the  Oceanic  Steamship  Co.,  and  the  steamship  Moana,  owned 
by  the  Union  Steamship  Co.,  a  foreign  corporation.     I  am  told  by  Mr.  Samuels,  man- 


SHIPPING  BOARD^  NAVAL  AUXILIARY^  AND  MERCHANT   MARINE.      153 


ager  of  the  Oceanic  steamship  Co.,  that  the  Union  Steamship  Co.  is  in  receipt  of  a 
subsidy  of  £20,000  a  year  from  the  New  Zealand  Government.  In  addition  to  that, 
of  course,  it  receives  an  unknown  sum  from  the  French  Government  for  carrying  the 
mails  between  Tahiti  and  this  port  and  money  from  the  Australian  Government  for 
conveying  the  mails  from  that  Commonwealth. 

I  do  not  know  whether  this  data  will  be  of  any  value ;  but  it  is  interesting  to  note  that 
the  wages  of  the  crew  of  the  American  ship  are  very  much  higher  than  those  paid  by 
the  Union  Steamship  Co.,  and  that,  despite  this  difference,  the  Oceanic  Steamship 
Co.  found  it  profitable  to  place  on  the  run  between  here  and  Australia  another  steamer 
in  the  last  30  days. 

AMERICAN.  \  ENGLISH, 

Sonoma,  gross,  6,279;  net,  3,911;  oil 
burner.  Passenger  capacity,  150,  first 
class;  72,  second  class;  28,  third  class. 

Captain,  1 $250, 00 

First  mate,  1 125. 00 

Second  mate,  1 95. 00 

Third  mate,  1 80. 00 

Fourth  mate,  1 Go.  00 

Chief  engineer.  1 \  1 80. 00 

First  assistant  engineer,  1 125. 00 

Second  assistant  engineer,  1. . .  100. 00 

Second  assistant  engineer,  1. . .  90. 00 

Third  assistant  engineer,  1.  . . .  85. 00 

Ref .  engineer,  1 70. 00 

Ref.  engineer,  1 60.  00 

Electrician,  1 70. 00 

Purser,  1 125. 00 

Surgeon,  1 75. 00 

Wireless  operators,  2,  at  ,$25 ....  50. 00 

Carpenter,  1 50. 00 

Boatswain,  1 50. 00 

Quartermasters,  4,  at  |45 180. 00 

Seamen,  1 2,  at  $40 480. 00 

Deck  bov.  1 25.  00 

Cadets,  3.  at  $20 60. 00 

Chief  steward.  1 100. 00 

Second  steward  .1 60. 00 

Second  cabin  steward,  1 50. 00 

Steerage  steward  .1 35. 00 

Stewardesses,  2.  at  $25 50. 00 

Storekeeper,  1 50. 00 

First  cook,  1 75.  00 

Second  cook,  1 60.  00 

Third  cook,  1 45. 00 

Fourth  cook,  1 35. 00 

First  baker,  1 75. 00 

Second  baker,  1 50. 00 

First  butcher,  1 60. 00 

Second  butcher,  1 35. 00 

First  paritr\anan,  1 45. 00 

Second  pantrj^man,  1 35.  00 

Third  pantryman  ,1 30.  00 

Second-cabin  pantryman,  1 .  .  .  35. 00 

First  messman,  1 40. 00 

Second  messman,  1 30.  00 

Third  messman,  1 30.  00 

Seamen's  messman,  1 30. 00 

Firemen's  messman,  1 30. 00 

Saloon  watchman,  1 30. 00 

Steerage  watchman,  1 30. 00 

Janitors,  2,  at  $30 60. 00 


Moana,   gi-oss,    3,914;   net,    2,414;   coal 

burner.     Passenger     capacity,  74,     first 

class;  49,  second  class;  40,  third  class. 

Captain,  1 $180. 00 

First  mate,  1 92. 00 

Second  mate,  1 78. 00 

Third  mate,  1 63. 00 

Chief  engineer,  1 146. 00 

Second  engineer 102. 00 

Third  engineer,  1 87. 00 

Fourth  engineer,  1 73. 00 

Fifth  engineer,  1 58. 00 

Sixth  engineer,  1 58. 00 

Seventh  engineer,  1 58. 00 

Donkevman.  1 .      53.00 

Purser*  1. . . .  ^ 68. 00 

Surgeon,  1 63. 00 

Wireless    operators,    2,    at    24 

cents .48 

Carpenter,  1 65. 00 

Boatswain.  ] 44. 00 

Seamen,  10,  at  $39 390. 00 

Seamen,  2.  at  $29 58. 00 

Deck  boy,  1 10. 00 

Chief  steward,  1 68. 00 

Second  steward,  1 37. 00 

Second  cabin  steward,  1 37. 00 

Steerage  steward,  1 32. 00 

Stewardess.  1 24.00 

Stewardess.  1. 20. 00 

Storekeeper,  1 27. 00 

Chief  cook.  1 70.  00 

Second  cook.  1 49. 00 

Third  cook.  1 36. 00 

Third  cook.  1 36. 00 

Ship's  cook,  1. 44. 00 

First  baker,  1 53. 00 

Second  baker,  1 37. 00 

Butcher,  1 39. 00 

Pantr\Tnan ,  1 32.  00 

Scullerv  m&n,  4,  at  $32 128. 00 

Pantryman.  1 32. 00 

Firemen's  messman.  1 20. 00 


154      SHIPPING  BOARD,  NAVAL  AUXILIARY",  AND  MERCHANT  MARINE. 

A  MERicAN — coiitiuued .  E  N  ( jLisH — coiitiuued . 

Barber,  L |0.  25     Barber,  1 

Linen  man,  1 35. 00 

Porter,  1 35.00 

Printer,  1 35. 00 

Water  tenders,  3,  at  $60 180.  00 

Water  tenders,  3,  at  .?55 165.  00 

Oilers,  6,  at  |45 270.00     Oilers,  2,  at  $49 198.00 

Storekeeper  (Eng.),  1 45. 00     Storekeeper  (Eng.j,  1 49. 00 

Firemen,  10.  at  $55 550.00     Firemen,  12,  at  |49 588.00 

Cadets  (Eng.),  3,  at  |20 60. 00     Trimmers,  9,  at  $39 351. 00 

Silver  man.  1 35. 00 

Waiters,  20,  at  $30 600. 00     Waiters,  13,  at  $27 351. 00 

Waiters,  14,  at  $24 336. 00 


Total,  118 5,  705.  25  :  Total,  105 4.  340.  48 

Mr.  Curry.  Mr.  Secretary,  there  was  some  talk  about  the  reasons 
for  American  money  not  havmg  been  invested  in  the  merchant 
marine.  Do  you  not  think  tliat  the  primary,  reason  is  tiiat  there  are 
more  profits  and  more  inducements  for  American  money  in  develop- 
ing the  undeveloped  natural  resources  of  the  country  than  there  was 
to  be  made  by  investing  the  same  amount  of  money  in  the  merchant 
marine  in  the  past? 

Secretary  Redfield.  That  is  true. 

Mr.  Curry.  Conditions  have  changed  now  ? 

Secretary  Redield,  Undoubtedly  that  is  true,  Mr.  Curry,  and  it  is 
also  true  that  we  did  not  have  enough  money  for  developing  our  own 
internal  resources;  we  had  to  borrow  it  from  abroad. 

Ml'.  Curry.  But  there  were  more  profits  in  developing  the  internal 
resources  of  the  country? 

Secretary  Redfield.  Yes. 

Mr.  Curry.  Than  there  was  in  putting  the  money  in  the  merchant 
marine  ? 

Secretary  Redfield.  Unquestionably,  and  that  argument  finds  a 
sound  support  in  American  history.  We  were  at  the  origin  a  mari- 
time country,  because  maritime  occupation  in  our  early  days  was 
the  most  profitable  occupation.  Money  could  be  made  in  the  sea. 
As  we  became  agricultural  and  became  industrial,  we  passed  tlu'ough 
an  evolution  when  money  could  be  made  in  those  projects.  Now,  the 
pendulum  has  swung  again. 

Mr.  Curry.  Yes;  ])ut,  Mr.  Secretary,  we  used  to  charge  10  per  cent 
more  duty  on  imports  that  were  brought  in  foreign  bottoms  than  we 
charged  on  those  brought  in  domestic  bottoms. 

Secretary  Redfield.  It  was  a  preferential  tariff  for  some  time. 

Mr.  Ha<rdy.  In  connection  with  having  no  money  to  invest  in 
these  foreign  ships,  is  it  not  also  a  fact  that  what  money  we  did  have 
to  invest  in  that  way  and  what  money  we  did  invest  that  way  we 
invested  under  tlie  foreign  flags? 

Secretary  Redfiet  d.  Yes. 

Mr.  Hardy.  The  American  individuals  and  citizens  did  put  money 
into  it,  but  they  put  it  under  foreign  fla^s  ? 

Secretarv  Redfield.  That  is  true  to  a  large  extent. 

Mr.  Hardy.  And  true  to  the  extent  of  SI 50,000,000  invested  that 
way  shows  there  was  sotnething  else  than  the  lack  of  money  that 
caus(>d  them  not  to  invest  under  our  flag  ? 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      155 

Secretary  Redfield.  I  am  not  sure  a  certain  amount  of  it  was 
not  foreign  money. 

Mr.  Hardy.  But  American  capital  invested  a  vast  amount  of  money 
in  foreign  shipping.     So  there  is  some  other  reason. 

Mr.  Curry.  Possibly  that  was  the  foreign  subsidy. 

Secretary  Redfield.  A  great  many  reasons  led  to  that  one  result. 

Mr.  Hardy.  And  there  are  ships  which  received  absolutely  no 
subsidy  ? 

Secretary  Redfield.  Tliat  is  true. 

Mr.  Hardy.  Is  not  that  very  easy  to  understand,  inasmuch  as 
when  an  American  wants  to  buy  ships  for  the  foreign  trade  he  can 
get  a  British  ship  cheaper  than  an  American  ship  ? 

Secretary  Redfield.  That  was  true  for  a  great  many  years?  it 
has  ceased  to  be  true  now. 

Mr.  Hardy.  I  do  not  think  it  will  l)e  true  under  certain  conditions. 

Secretary  Redfield.  We  have  had  to  build  ships  as  a  jobbing  oper- 
ation, one  ship  at  a  time,  and  go  to  an  English  yard.  We  did  not  make 
that  kind  of  a  ship. 

Mr.  Hardy.  When  our  commerce  was  flourishing  on  all  the  seas,  it 
was  a  fact  that  we  built  ships  not  only  for  ourselves  but  for  other 
nations,  too,  did  we  not  ? 

Secretary  Redfield.  Yes. 

Mr.  Hardy.  And  we  built  the  best  ships  for  the  money  ? 

Secretary  Redfield.  We  built  a  standardized  ship. 

Mr.  Hardy.  We  at  least  built  the  best  ships  for  the  nlone3^  is  my 
understanding. 

Secretary  Redfield.  Yes;  they  were  famous  all  over  the  world. 

Mr.  Curry.  Then  we  stopped  the  preferential  duty  and  they  com- 
menced paying  subsidies  ? 

Secretary  Redfield.  Great  Britain  does  not  pay  subsidies  on 
freighters. 

Mr.  Curry.  They  pay  subsidies  only  on  liners, 

Mr.  Rowe.  Germany  "works"  us  to  get  a  subsidy. 

Secretary  Redfield.  I  would  like  to  file  with  the  stenograplier  a 
memorandum  on  the  British  control  of  merchant  shipping,  giving  the 
British  acts  of  the  last  few  months,  and  to  call  attention  to  Senate 
Document  673,  parts  1  and  2,  last  year,  embodying  the  complaints  of 
business  men  at  that  time  and  the  rise  in  freight  rates  up  to  that  period, 
and  also  to  refer  to  page  137  of  my  own  annual  report,  in  which  the 
cost  of  operation  of  the  larger  vessels  in  the  Lighthouse  Service  is  given 
in  great  detail,  reduced  to  cost  per  mile  run.  I  put  that  in  there 
thmkmg  I  would  draw  fire  from  some  private  parties,  and  I  have  not 
drawn  it  so  far. 

(The  statement  of  Britisli  control  of  merchant  sliipping,  etc.,  here 
submitted  by  Secretary  Redfield  is  as  follows:) 

Department  or  Commerce, 

l^uREAU  OF  Navigation, 

Washington.  Febrvary  9,  1916. 
Memorandum  for  Secretary  Redfield. 

BRITISH   control   OF   MERCHANT   SHIPPING. 

The  following  are  the  principal  war  measures  by  which  the  British  GoA^erninent 
has  taken  control  over  merchant  shipping,  as  far  as  I  know: 

1.  August  5,  1914.  British  act  passed  prohibiting  British  ships  from  carrying  con- 
traband between  foreign  ports  (including  neutral  ports). 

2.  March  16,  1915.  "British  act  passed  prohibiting  transfer  of  any  i5ritish  ship  or 
any  share  therein  to  foreigners. 


156      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

3.  April  13,  1915.  Order  in  Council  requisitioning  all  refrigerated  space  in  British 
ships  in  trade  with  Australia,  Xew  Zealand,  and  later  River  Plate. 

4.  July  6,  1915.     Made  an  offence  to  take  intoxicating  liquor  into  a  dock  or  on  a  ship. 

5.  November  10,  1915.  Order  in  Council  prohibiting  British  ships  fi"om  carrying 
«ars:o  between  foreign  ports  after  December  1,  1915,  unless  licensed  so  to  do  by  board 
of  trade. 

6.  November  10,  1915.  Board  of  Ti'ade  authorized  in  emergencies  to  requisition 
merchant  ships  to  carry  foodstuffs  and  other  necessary  supplies  to  the  United  Kingdom. 
(This  indirectly,  of  course,  gives  control  over  rates). 

The  measures  above  do  not,  of  course,  cover  requisitions  of  ships  directly  for  mili- 
tary and  naA'al  operations.  Sir  Norman  Hill,  Secretary  of  the  Liverpool  Steamship 
Owners'  Association,  and  probably  the  best  authority  in  England  on  the  subject, 
reported  to  his  association  on  October.  1915.  that  the  Admiralty  had  taken  up  for 
Government  service  about  800,  i.  e.  20  per  cent  of  the  steamships  belonging  to  the 
United  Kingdom,  which  are  of  1,000  net  tons  and  upwards.  Of  these  ve.?sels  about 
250  are  Liners  and  550  general  cargo  boats.  Amongst  the  liners  are  vessels  certified 
to  carry  as  passengers  and  crews  125,000  persons.  The  Admiralty  has  in  addition 
taken  up  nearly  300  trade  steamships  of  less  than  1,000  net  tons  and  a  very  large 
number  of  tugs,  yachts  and  trawlers.  He  estimated  that  as  a  net  result,  the  war, 
by  losses  and  by  the  requirements  of  the  Admiralty,  has  diminished  by  about  25  per 
cent  the  number  of  British  vessels  available  for  the  ocean  over-sea  trade.  Through 
causes  incidental  to  the  war  the  number  of  seamen  available  for  the  ocean  over-sea 
trade  has  also  been  reduced  about  25  per  cent. 

E.  T.  Chamberlain, 

Comniisdoner. 

Secretary  Redfield.  I  think  that  is  everythiiig.  Mr.  Chairman, 
unless  you  wish  something  more  from  me. 

The  Chairman.  Are  there  any  further  questions  desired  to  he 
asked  the  Secretary  ? 

Mr.  Cltiry.  I  do  not  Iviiow  whether  the  Secretary  is  in  position  to 
give  the  information  or  not,  but  there  have  been  some  claims  made 
before  this  committee  at  the  last  session,  and  some  few  references  at 
this  time  stating  that  the  American  merchant  marine  was  under  a 
handicap  on  account  of  the  difference  in  tonnage.  I  do  not  think 
there  is  very  much  merit  in  that. 

The  Chairman.  Tlie  Commissioner  of  Navigation  will  come  before 
the  committee  and  go  over  that  matter  with  us. 

Secretary  Redfield.  While  they  say  that  these  ships  have  been 
transferred  under  the  ship  registry  act,  many  of  them  are  going  back 
to  the  other  flag,  and  while  my  good  friend  Dollar  is  quoted  as  an 
example  of  doing  that,  I  think  Mr.  Chamberlain  says  that  ship  has 
not  been  transferred. 

^li\  Chamberlain.  One  has  been  transferred. 

Secretary  Redfield.  But  no  ship  put  under  the  American  flag 
has  ever  been  taken  out  from  under  it. 

Tlie  Chairman.  Right  at  that  point,  all  his  ships  were  under  the 
English  flag  until  the  war  in  Europe  commenced,  and  then  he  put 
them  under  the  American  flag. 

Secretary  Redfield.  And  he  has  kept  them  there,  except  one  sold 
to  Shanghai.  It  was  a  British  ship  and  came  under  the  American 
flag  and  was  sold  to  Shanghai,  and  the  nevr  owner  put  her  under  the 
British  flag. 

The  point  T  was  going  to  make  is  that  while  these  ships  are  under 
the  American  flag,  these  hundred  and  odd  vessels,  the  officers  of  these 
ships  show  a  most  commendable  desire  to  become  American  citizens; 
and  out  of  900  quite  a  few  more  than  500  are  already  American 
citizens,  over  a  hundred  more  have  taken  out  the  first  papers,  so 
that  substantially  two-thirds  of  them  either  are  citizens  or  are  becom- 
ing such,  which  is  not  an  exact  suggestion  that  they  are  expecting 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      157 

to  be  transferred  back  to  a  foreign  flag  in  the  near  future.  It  is  a 
little  side  light  upon  that  situation. 

The  Chaikmax.  It  is  to  be  hoped  they  will  not  do  so,  and  that 
conditions  will  not  compel  them  to  do  so. 

]Mr.  Edmonds.  I  met  a  Japanese  captain  who  said  he  would  like 
to  be  an  American  captain  because  he  got  pie  every  day. 

STATEMENT  OF  CAPT.  ELLSWORTH  P.  BEETHOLF,  CAPTAIN 
COMMANDANT,  UNITED  STATES  COAST  GUARD,  TREAS- 
URY   DEPARTMENT. 

The  Chairman.  Capt.  Bertholf,  state  what  your  position  is,  that 
it  may  go  into  the  record;  I  know  myself. 

Capt.  Bertholf.  Commandant  of  the  Coast  Guard,  which  in- 
cludes the  Revenue-Cutter  Service. 

The  Chairman.  And  for  how  many  years  have  you  been  such  ? 

Capt.  Bertholf.  Five  years  now. 

The  Chairman.  Capt.  Bertholf,  we  want  to  call  your  attention  to 
section  11  of  the  bill.  Will  you  explain  its  provisions  and  what  the 
practical  effect  will  be,  and  what  the  cost  will  be  if  certain  of  these 
vessels  are  designated  as  part  of  the  United  States  Naval  Auxiliary 
Reserve  ? 

Capt.  Bertholf.  I  had  a  memorandum  of  that.  I  gave  it  to  some- 
body this  morning,  and  I  have  not  a  copy  now,  but  I  can  get  it  for 
you. 

The  Chairman.  I  have  a  copy. 

Capt.  Bertholf.  If  I  may  have  it,  please. 

(The  memorandum  referred  to  was  handed  to  Capt.  Bertholf.) 

NAVAL    RESERVE    FEATURE    OF   THE    SHIPPING    BILL. 

The  monthly  allowances  proposed  in  section  11  of  the  biU  seem  to  be  fair  and  reason- 
able. 

The  annual  cost  on  a  basis  of  500,000  gross  tons  would  be  about  $631,000  (approxi- 
mately $1.26  per  gross  ton  per  annum)  divided  among  the  units  as  follows: 

8  ships  of  Great  Northern  type $118, 176 

20  ships  of  Havana  type 229,  440 

25  ships  of  Suwanee  type 115,  300 

40  ships  of  Atlantic  type 168,  480 

631,  396 
Great  Northern,  owned  by  the  Portland  &  Seattle  Raihoad  Co.  and  operating  be- 
tween San  Francisco,  Loa  Angeles,  and  Honolulu:  Type,  fast  passenger  and  freight 
steamer;  speed.  23  knots;  gross  tonnage,  8,225;  built,  1915;  cost,  $1,250,000. 
Crew:  Per  annum. 

9  officers,  at  $15  per  month " $1,  620 

3  warrant  officers,  at  $12  per  month 432 

20  petty  officers,  at  $10  per  month 2,  400 

172  men,  at  $5  per  month 10,  320 

204  14, 772 

Havana,  owned  by  the  New  York  &  Cuba  Mail  Steamship  Co.  and  operating  between 
New  York  and  Havana:  Type,  medium  speed  passenger  and  freight  steamer;  speed, 
18  knots;  gross  tonnage,  6,391;  built,  1907;  cost,  $960,0|00. 
Crew:  Per  annum. 

8  officers,  at  $15  per  month $1,  440 

3  warrant  officers,  at  $12  per  month 432 

20  petty  officers,  at  $10  per  month 2,  400 

120  men,  at  $5  per  month 7,  200 

151  11,472 

32910—16 11 


158      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Suwanee,  owned  by  the  State  Street  Trust  Co.:  Type,  slow  passenger  and  freight, 
steamer;  speed,  13  knots;  gross  tonnage,  3,648;  built,  1911;  cost,  $550,000. 

Per 
Crew:  annum. 

5  officers,  at  $15  per  month $900 

3  warrant  officers,  at  $12  per  month 432 

8  petty  officers,  at  $10  per  month 960 

52  men,  at  $5  per  month 3, 120 

68  5, 412 

Atlantic,  owned  by  John  S.  Emery  &  Co.  (Inc.):  Type,  bulk  freight  carrier;  speed, 
12  knots;  gross  tonnage,  5,330:  built,  1914;  cost,  $540,000. 

Per 
Crew:  annum. 

5  officers,  at  $15  per  month $900 

3  warrant  officers,  at  $12  per  month 432 

8  petty  officers,  at  $10  per  month 960 

32  men,  at  $5  per  month 1,  920 

48  4, 212 

RESUME. 


Number 
in  crews. 


Gross 
tonnage. 


Cost  for 

Naval 

reserve 

allowances 

per  annum. 


8  Great  Northerns 

20  Havanas 

25  Suwanees 

40  Atlantics 

93  Total 

Approximations 


1,H32 
3,020 
1,700 
1,020 


66,040 
127, 820 

91,200 
213, 200 


8,272 
8,300 


498, 260 
500,000 


.?118, 170 
229, 440 
115, 300 
168, 480 


631,396 
631,000 


The  object  sought  under  that  is  sort  of  a  corollary  to  the  other  pro- 
vision whereby  any  of  these  vessels  leased  or  sold  by  the  board  must 
be  obligated  to  become  available  as  auxiliaries  in  time  of  war.  This 
section  11  acts,  in  a  measure,  to  provide  for  the  crews  of  those  vessels 
and  to  encourage  a  naval  reserve  in  the  personnel,  the  idea  being 
that  the  officers  and  men  on  these  various  board  ships  should,  in 
consideration  of  a  small  monthly  retainer,  obligate  themselves  to 
enter  the  service  of  the  Navy  whenever  required  in  time  of  war  or 
other  national  emergency. 

In  estimating  on  the  cost  of  this  feature  of  the  bill,  we  take  as 
examples  four  types  of  ships  now  in  existence. 

First,  the  Great  Northern,  operating  on  the  west  coast.  She  is  a 
fast  passenger  and  freight  steamer,  making  23  knots.  Presumably, 
as  auxiliaries,  they  would  need  several  of  those  ships — as  we  figured 
on  eight  of  them. 

Next,  20  ships  of  the  Havanna  type.  She  is  a  medium-speed  pas- 
senger and  freight  steamer. 

Next,  25  ships  of  the  Suwanee  type,  this  vessel  being  a  slow  passen- 
ger and  freight  steamer. 

And  next,  40  ships  of  the  Atlantic  type.  She  is  a  bulk  freight 
carrier. 

Taking  a  total  of  93  ships  of  these  four  types,  we  figured  what  the 
total  cost  would  be  under  section  1 1  of  the  bill,  if  all  of  the  personnel 
of  those  ships  were  enrolled  under  the  naval-reserve  feature.  This 
would  give  approximately  500,000  gross  tons  for  naval  auxiliaries,  a 
personnel  of  7,300  men,  and  would  cost  annually  only  $631,000. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      159 

Of  coiu'se,  to  have  a  larger  reserve  would  simply  be  a  question  of 
multiples,  but  this  is  the  maximum  amount  section  11  of  the  bill 
would  cost,  providing  the  crews  of  all  of  these  ships  would  enroll. 
The  enrollment  is  voluntary,  and,  of  course,  all  persons  to  be  enrolled 
must  be  American  citizens. 

Mr.  Edmonds.  It  does  not  say  so  in  the  act. 

Capt.  Bertholf.  I  thought  it  did — that  is,  provided  that  they 
shall  be  citizens  of  the  United  States  in  line  19. 

Mr.  Edmonds.  $631,000? 

Capt.  Bertholf.  $631,000  would  be  the  maximum  cost  under  this 
section  for  500,000  gross  tons  of  sliipping. 

Mr.  Edmonds.  Of  course  all  the  men  on  the  ships  would  not  bo 
eligible  ? 

Capt.  Bertholf.  Oh,  no;  and  possibly  all  the  men  on  the  ships 
would  not  volunteer.     So  it  would  not  cost  us  this  much,  although  in 
estimating  the  cost  we  assumed  a  full  crew  for  all  these  vessels. 
•     Mr.  Edmonds.  Is  that  money  to  come  out  of  the  $50,000,000,  Mr. 
Chairman  ? 

The  Chairman.  Yes;  it  is  well  spent. 

Mr.  Edmonds.  It  is  well  spent.  I  was  wondering  where  it  was  to 
come  from  and  who  was  to  pay  it. 

Capt.  Bertholf.  The  biU  provides  that  later  on  all  expenses  are  to 
be  paid  from  the  sum  provided.  Furthermore,  all  of  these  naval- 
reserve  features  must  operate  under  rules  and  regulations  prescribed 
by  the  Secretary  of  the  Navy,  but  with  the  approval  of  the  board,  so 
that  the  military  feature  is  not  unduly  emphasized.  It  must  be  made 
subordinate  to  the  trade  requirements. 

Mr.  Edmonds.  If  the  average  pay  of  a  man  on  an  American  ship 
was  $30,  would  it  only  be  $25  under  this  ?  If  so,  it  would  act  just  the 
same  as  the  subsidy  to  a  ship  in  reducing  the  wages  of  the  ship;  or 
would  they  still  pay  the  fuU  salary  and  take  this  as  an  aside  ? 

Capt.  Bertholf.  I  do  not  know  just  how  that  would  work.  In  the 
English  service  the  enlisted  men  of  the  reserve  receive  an  annual 
retainer;  the  officers  do  not  and  are  paid  only  when  called  for  training 
or  for  actual  service. 

Mr.  RowE.  In  other  words,  if  given  that  extra  pay  it  would  tend 
to  secure  a  higher  grade  of  men  ? 

Capt.  Bertholf.  Naturally,  and  not  only  that,  I  think  experience 
has  taught  there  is  something  more  besides  the  pay.  These  men  will 
be  very  glad  to  enroU  as  reserves.  It  gives  them  a  certain  standing 
and  steady  income  right  along. 

The  Chairman.  And  provides  that  they  must  be  American  citi- 
zens? 

Capt.  Bertholf.  That  they  must  be  American  citizens. 

The  Chairman.  Under  existing  law,  the  crew  of  the  vessel,  aside 
from  the  watch  officers,  are  not  required  to  be  American  citizens  ? 

Mr.  Edmonds.  I  did  not  object;  I  was  only  trying  to  see  what  the 
effect  would  be.  Here  is  the  proposition :  Take  a  ship  with  50  men, 
25  go  into  the  Naval  Ixeserve,  say,  getting  $30  a  month  as  wages. 
Twenty-five  of  those  get  $30  and  25  get  $30,  together  with  the  $5 
from  the  Naval  Reserve.  What  would  be  the  result  of  these  men 
getting  $5  more  than  the  other  feUow?  Would  that  be  to  reduce 
their  wages  to  $25  a  month,  because  they  are  getting  this  ? 


160      SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Capt.  Bertholf.  I  could  not  say  how  it  would  act.  In  the  case 
you  speak  of,  25  men  belonging  to  the  auxiliary  reserve,  and  25  not, 
and  the  rate  for  that  ship  being  S30  a  month,  it  does  not  seem  to  me 
that  the  sIitjd  would  be  successful  if  they  reduce  the  wages  of  those  25 
men  $5.  Those  men  would  go  to  other  ships  where  they  would  be 
allowed  to  keep  this  as  extra,  and  if  they  were  good  men  they  would 
get  it. 

Mr.  Edmonds.  It  looks  to  me  as  if  that  would  work  out  that  way, 
because  I  do  not  think  there  would  be  any  ship  go  mider  that  rule 
where  every  man  would  be  in  the  reserve. 

Capt.  Bertholf.  No;  because  the  tendency  of  the  shipping  people 
is  to  keep  their  crew  if  they  can,  and  it  is  much  more  economical  to 
do  so. 

Mr.  Curry.  I  have  some  information  on  the  nativity  of  sailors  in 
certain  ports,  that  is,  other  than  officers,  if  it  is  worth  while  putting 
into  the  record.  The  United  States  supervising  inspector  at  San 
Francisco  reports  that  up  to  January  28  of  this  year  2,064  sailors 
have  qualified  under  the  seaman's  act;  of  that  number  the  native 
born  were  8  per  cent,  168;  the  naturafized  17  per  cent,  345;  foreign- 
ers, 75  per  cent,  1,551;  the  total  of  2,064. 

Of  the  nine  largest  ports  in  the  United  States,  including  San  Fran- 
cisco, New  York,  Philadelphia,  and  Baltimore,  and  others,  I  would 
like  to  submit  the  following: 

[San  Francisco  Daily  Commercial  News,  Feb.  9, 1916.] 

The  foreign  trade  department  of  the  San  Francisco  Chamber  of  Commerce  has  pro- 
cm-ed  from  the  United  States  local  inspectors  at  the  principal  ports  an  official  statement 
of  the  number  of  seamen  who  have  received  certificates  since  the  seaman's  law 
became  effective. 


Ports. 

Total 
number 
passed. 

Native- 
born 

Ameri- 
cans. 

Per 
cent. 

Natural- 
ized 

Ameri- 
cans. 

Per 
cent. 

Aliens. 

Per 
cent. 

891 
226 

2,064 
288 
293 
752 

3,163 
742 
699 

9 

11 

168 

29 

15 

543 

455 

185 

161 

1 

5 
8 
10 
5 
72 
14 
25 
23 

18 
44 

345 
20 
10 
17 

199 
89 
25 

2 
19 
17 

7 
3 
2 
6 
12 
4 

864 
171 

1,551 
239 
268 
192 

2,509 
468 
513 

97 

76 

75 

Galveston  

83 

New  Orleans 

92 

26 

80 

63 

Philadelphia  

73 

Total 

9,118 

1,576 

17 

767 

8 

6,775 

75 

Capt.  Bertholf.  Of  course,  under  this  provision  there  would  be 
an  added  incentive  for  a  man  to  become  a  naturafized  citizen. 
There  is  probably  a  considerable  percentage  of  those  men  now  enti- 
tled to  be  naturalized,  but  vnih  no  particular  advantage  in  naturali- 
zation under  existing  law,  they  are  either  careless  in  the  matter  or 
they  did  not  have  the  time  to  attend  to  it,  going  from  port  to  port, 
and  never  remaining  long  in  one  port.  This  section  11  would  be  an 
inducement  to  men  who  wanted  to  be  citizens  to  quafify. 

The  Chairman.  We  will  now  adjourn  until  to-morrow  morning  at 
10.30. 

(Thereupon,  at  5.20  o'clock  p.  m.  the  committee  adjourned  to  meet 
to-morrow,  February  11,  1916,  at  10.30  o'clock  a.  m.) 


CHEATING  A  SHIPPING  BOARD,  A  NAVAL  AUXILIARY,  AND  A 
MERCHANT  MARINE. 


Committee  on  Merchant  Marine  and  Fisheries, 

House  of  Representatives, 
Washington,  D.  C,  Friday,  Fehrvary  11,  1916. 
The  committee  met  at  10.30  o'clock  a.  m.,  Hon.  Joshua  W.  Alex- 
ander (chairman)  presiding. 

The  Chairman.  Gentlemen,  we  have  present  this  morning  Mr.  A.  B. 
Farquhar,  who  is  one  of  the  vice  presidents  of  the  United  States 
Chamber  of  Commerce.  He  has  other  business  this  morning,  and  if 
there  is  no  objection  we  wiU  let  him  make  such  a  statement  as  he 
cares  to  with  reference  to  the  bill,  H.  R.  10500,  known  as  the  ship- 
ping bill. 

STATEMENT  OF  MR.  A.  B.  FARQUHAR,  YORK,  PA.,  VICE-PRESI- 
DENT CHAMBER  OF  COMMERCE  OF  THE  UNITED  STATES. 

The  Chairman.  Mr.  Farquhar,  please  state  to  the  committee  your 
business  connections. 

Mr.  Farquhar.  I  have  been  in  business  60  years  the  7th  of  next 
April,  and  have  been  in  the  foreign  trade  for  50  years,  shipping  to 
export  establishments  in  New  York. 

The  Chairman.  What  class  of  goods? 

IVIr.  Farquhar.  Mainly  machinery — steam  engines,  boilers,  agri- 
cultural implements,  and  machinery  of  various  kinds.  I  have  an 
agricultural  implement  factory,  and  also  a  large  machinery  factory  in 
York,  Pa. 

Of  course,  we  had  no  difficulty  in  obtaining  shipping  at  low  rates 
until  the  war  came  on,  and  I  took  no  very  special  interest  hi  the 
question  of  mercantile  marine,  exoept  that  I  felt  it  was  very  essential 
for  the  support  of  our  Navy.  Since  then  I  have  seen  plainly  that  we 
are  suffermg  very  much  in  many  w^ays  by  not  having  a  mercantile 
marine  of  our  own.  You  see,  when  you  get  a  competitor  to  carry 
your  goods  and  have  no  way  of  shipping  them  except  through  a  com- 
petitor you  are  at  a  disadvantage.  He  will,  of  course,  give  his  own 
people  the  preference  in  rates  and  he  will  give  them  preference  in  very 
many  ways,  especially  when  there  is  more  shipping  than  there  is  room 
for.  We  are  delayed  both  in  loading  and  in  delivery,  and  it  is  impos- 
sible, in  our  opinion,  that  we  can  successfully  hold  our  export  trade 
in  competition  with  the  world  unless  we  have  our  own  shipping. 

So  I  have  reluctantly  come  to  the  conclusion  that  it  is  essential  that 
there  should  be  a  subsidy  or  subvention  sufficient  to  pay  the  difference 
between  the  cost  of  running  American  ships  and  the  cost  of  running 
foreign  ships,  unless,  of  course,  all  the  restrictions  are  removed. 

itil 


162      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MEECHANT  MARINE. 

Now,  I  find  in  England,  although  the  labor  unions  are  stronger 
there  than  any^vhere  else  in  the  world,  that  they  interfere  in  no  way 
with  the  shipping.  They  see  it  is  to  their  advantage  in  the  long  run, 
because  it  gives  them  more  work.  I  believe  our  labor  unions  would 
see  the  matter  in  the  same  way  if  the  facts  were  pointed  out  to  them, 
and  that  they  would  oppose  all  restrictions  of  any  kind  upon  our 
having  it. 

Of  course,  with  restrictions  against  shipping,  it  will  be  impossible 
to  get  capital  in  America  to  invest  to  any  great  extent  in  ships  unless 
they  are  assured  the  Government  will  pay  thom  enough  to  make  the 
difference  between  the  cost  of  American  and  foreign  labor,  and  in 
the  long  run  that  would  pay  us  richly.  We  would  be  hundreds  of 
millions  of  dollars  better  off  now  if  even  five  or  six  million  dollars  had 
been  expended  annually  in  the  last  15  or  20  years  in  subventions  or 
subsidies,  and  we  would  now  have  a  large  mercantile  marine.  And 
that  mercantile  marine,  of  course,  if  the  Government  subsidized  it, 
should  be  available  for  the  Navy  in  case  of  any  trouble.  Om-  Navy 
is  of  no  use  without  it.  We  had  difficulties  enough  in  the  Spanish 
War,  when  we  had  to  buy  old,  wortliless  vessels  at  tremendous 
prices. 

We  have  idle  navy  yards  in  New  Orleans,  Pensacola,  and  Ports- 
mouth that  could  be  occupied  right  now  and  started  to  work  build- 
ing ships.  Of  course,  it  would  cost  more  than  it  would  for  private 
concerns  to  build  them,  but  our  individual  yards  are  filled  lor  at 
least  two  years  to  come.  Those  navy  yards  are  of  no  use  while 
they  are  idle,  and  it  would  be  of  great  advantage  to  give  them  work, 
to  have  the  men  trained,  and,  as  a  business  man,  I  tliink  that  in  the 
long  run  it  would  pay  the  country  richly. 

But  a  mercantile  marine  now  is  absolutely  essential  it  we  are  to 
carry  on  our  export  trade.  We  are  paying  from  200  to  300  per  cent, 
and  as  high  as  800  per  cent,  more  than  we  paid  four  years  ago  for 
shipping  goods.  In  very  many  cases  we  can  not  ship  at  all.  The 
railroads  are  clogged  up,  so  that  we  can  not  even  get  raiboad  trans- 
portation to  the  vessels.  And  as  an  exporter  and  a  manufacturer 
for  export  I  find  it,  in  my  judgment,  absolutely  essential  that  some- 
thing should  be  done,  and,  although  I  do  not  approve  of  Government 
ownership — it  costs  far  more  for  the  Government  to  build  ships  and 
to  run  them  and  to  manage  them  and,  for  that  matter,  to  manage 
anything  else,  than  it  does  individuals — yet  in  tliis  emergency  I 
cordially  approve  of  the  present  bill,  wliich  I  have  read  carefully.  I 
think  tiie  country  has  lost  very  heavily  by  not  passing  the  bill  a 
year  ago.  I  did  not  favor  it  then,  but  there  is  no  question  that  at 
that  time  we  could  have  bought  ships  from  Italy,  Norway,  and 
elsewhere,  and  we  would  have  had  ships  to  the  value  of  at  least 
$100,000,000  more  than  it  was  proposed  to  pay  for  them,  and  it 
would  have  saved  that  much  more.  That,  however,  is  past;  but 
even  this  bill  as  it  stands  will  be  a  step,  at  any  rate,  and  wifh  a 
competent  board  appointed — and  it  would  have  to  be  an  expert 
board,  of  course,  on  the  plan  of  the  Interstate  Commerce  Commis- 
sion, which  has  been  of  vast  benefit  to  shippers — there  would  be  no 
trouble  about  any  imposition.  The  board,  I  think,  would  see  that 
nothing  must  be  done  to  interfere  with  Americans  building  ships, 
because  we  need  not  $50,000,000,  but  $500,000,000  to  build  even  a 
fair  amount  of  ships  to  carry  on  our  own  trade.     The  English  have 


SHIPPING  BOAED,  NAVAL  AUXILIARY^  AND  MEECHANT  MAEINE.      163 

20,000,000  or  21,000,000,000  tons,  and  we  have  only  about  750,000 
tons,  and  yet  we  do  a  little  over  a  quarter  of  the  export  trade  of  the 
world. 

I  do  not  think  I  have  anything  special  to  say,  but  I  would  be  glad 
to  answer  any  questions  that  I  can  answer. 

Mr.  Curry.  You  said  an  expert  board  would  be  necessary.  Have 
3^ou  noticed  that  this  bill  does  not  require  any  experts  on  the  board  ? 

Mr.  Farquhar.  Yes;  I  have  noticed  that.  I  think  that  is  a 
mistake  that  the  President  would  see  the  wisdom  of  correcting  as  he 
appoints  the  members.  I  see  no  special  objection  to  having  the 
Secretary  of  Commerce  and  the  Secretary  of  the  Navy  on  the  board 
if  the  other  three  men  were  all  ex])erts  who  understood  shipping  and 
all  that  pertains  to  it.  They  would  be  in  the  majority  but,  of  course, 
the  Department  of  Commerce  and  the  Navy  Department  would  have 
a  good  deal  to  do  with  it.  Men  should  be  educated  for  the  mercan- 
tile marine  service  on  those  vessels.  The  idea  of  having  apprentices 
is  a  good  one,  I  think. 

Mr.  Curry.  Do  you  think  that  the  Secretaries  in  the  Cabinet,  with 
theh  other  multitudinous  duties,  could  pay  sufficient  attention  to  the 
details  of  this  work  ? 

Mr.  Farquhar.  I  think  it  is  of  such  ]iaramount  importance  they 
would  take  the  necessary  time.  I  haA'^e  found  as  a  business  man  that 
I  could  always  find  time  to  do  what  it  was  necessary  to  do.  The 
busier  I  was  the  more  time  I  would  find. 

Mr.  Curry.  But  you  have  never  tried  to  do  something  you  did  not 
know  something  al)Out  ? 

Mr.  lARQUHAR.  No;  I  have  always  taken  great  pains  to  study  it. 
This  bill  I  have  taken  pains  to  study  from  its  very  inception,  and  I 
have  followed  the  proceedings  of  Congress  for  the  last  30  years. 

Mr.  Curry.  You  have  said  something  about  the  disadvantages 
that  the  American  merchant  marine  was  under.  Do  you  know  what 
they  are?     If  you  do  not,  I  do  not  want  to  ask  the  question, 

Mr.  Farquhar.  I  only  know  such  as  have  come  under  my  personal 
notice.  The  shipping  companies  give  preference  to  the  people  of 
their  own  countries  in  shipping,  and  if  there  is  a  scare tiy  of  shipping 
we  do  not  get  it;  we  have  to  await  their  convenience.  Preference  is 
given  also  by  way  of  advertisement — the  flag  is  an  advertisement  in 
the  ports.  I  remember  very  well  that  in  1856,  when  I  went  in  busi- 
ness, in  my  travels  I  would  see  our  flag  in  pretty  nearly  every  port, 
and  we  do  not  see  it  now  at  all.  That  would  be  a  great  advertisement 
to  our  business  and  our  trade. 

Mr.  Curry.  Of  course,  the  giving  of  that  preference  is  natural.  Is 
there  anythmg  in  the  American  law  that  would  prevent  an  American 
ship  from  giving  preference  to  an  American  shipper  ? 

Mr.  Farquhar.  No;  there  is  nothing  in  the  law  at  present,  but  I 
think  that  if  we  appointed  a  board  whatever  restrictions  are  made 
against  American  shipping  would  gradually  be  made  f  gainst  foreign 
shipping  and  they  would  all  be  put  in  the  same  class. 

Mr.  CiTRRY.  At  the  time  you  speak  about,  when  the  American 
shipping  was  first  or  second  in  the  shipping  of  the  world,  you  remember 
that  America  allowed  a  difierential  of  10  per  cent  on  goods  carried  in 
American  bottoms  ? 

Mr.  Farquhar.  Yes;  from  5  to  10  per  cent.  I  think  the  most  of 
it  was  5  per  cent. 


164      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Curry.  Five  per  cent  across  the  Atlantic  and  10  per  cent  to 
the  Pacific. 

Mr.  Farquhar.  Yes;  that  is  correct.  Of  course,  we  had  the  advan- 
tage when  the  ships  were  nearly  all  of  wood.  When  steel  was  sub- 
stituted for  wood  it  gave  the  English  an  advantage  over  us,  but  now 
we  make  steel  just  as  cheaply  as  they  do. 

Mr.  Curry,  tor  the  past  20  years  the  only  difference  in  cost  of 
construction  between  a  British  ship  and  an  American  ship,  as  far  as 
material,  not  labor,  is  concerned,  has  been  tliree-eighths  of  I  per 
cent. 

Mr.  Farquhar.  Yes;  it  amounted  to  very  little.  But  it  costs  so 
much  more  to  run  American  ships  on  account  of  the  higher  price  of 
labor  and  various  restrictions  in  our  navigation  laws. 

Mr.  Curry.  I  think  if  you  will  look  that  up  you  will  find  that,  ton 
for  ton,  it  does  not  cost  so  much  more  as  you  imagine.  Have  you 
looked  into  that  ? 

Ml*.  Iarquhar.  Oh,  yes.  The  difference  is  not  so  great  as  people 
commonly  think,  but  it  takes  but  a  very  small  difference  to  swing  the 
trade  one  way  or  the  other.  I  have  been  opposed  to  giving  the 
American  ships  the  preference  in  the  way  of  tariff,  but  I  have  come 
to  the  conclusion  it  is  so  necessary  that  if  we  want  a  mercantile 
marine  we  should  change  that.  I  think  the  American  ship  should 
have  95  per  cent  advantage. 

Mr.  Curry.  Om*  treaties  contain  a  provision  requiring  one  3^ear's 
notice  from  this  country  or  the  other  country 

Mr.  Farquhar.  Yes;  and  notice  has  been  given  to  most  of  the 
countries,  so  that  they  can  be  changed  this  summer. 

Mr.  Curry.  That  notice  has  been  given,  so  far  as  the  seamen's 
law  is  concerned,  but  not  so  far  as  the  5  per  cent  is  concerned  in  the 
Underwood  bill. 

Mr.  Farquhar.  No. 

Mr.  Hardy.  Mr.  Farquhar,  you  say  that  at  this  time  when  our 
merchant  marine  was  so  flourishing  there  was  a  differential  of  5  per 
cent  on  the  Atlantic  and  10  per  cent  on  the  Pacific  on  goods  carried 
in  our  own  ships  ? 

Mr.  Farquhar.  Yes. 

Mr.  Hardy.  Do  you  remember  back  as  far  as  1828? 

Mr.  Farquhar.  No.  In  1828,  of  course,  we  commenced  to  do  the 
vast  majority  of  our  shipping.  By  1830  we  did  nine-tenths  of  all  the 
shipping.  But  I  do  not  remember  back  that  far.  The  first  thing 
I  remember  is  the  death  of  Gen.  Harrison  and  the  cannon  fired  over 
his  grave,  but  I  was  too  young  then  to  give  the  shipping  question 
any  attention.     [Laughter.] 

Mr.  Hardy.  Do  you  know  that  there  has  been  no  differential  or 
discriminatmg  duty  allowed  to  ships  bearing  our  flag  since  1828? 

Mr.  Farqlthar.  I  thought  that  change  was  made  in  1836  ? 

IMr.  Hardy.  In  1828,  under  Anderw  Jackson,  the  last  vestige  of  a 
discriminating  duty  was  done  away  with.  Now,  you  have  no 
recollection  of  a  time  when  discriminating  duties  caused  our  ships 
to  be  on  the  seas  ? 

Mr.  Farquhar.  Oh,  I  think  that  had  a  great  deal  to  do  with 
starting  them  on  the  seas  in  the  first  place,  but  not  in  keeping  them 
there.  I  have  no  recollection  of  the  time  when  a  differential  was 
allowed. 


I 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      165 

Mr.  Hardy.  So  you  are  mistaken,  I  suppose,  about  the  time  when 
you  say  you  saw  our  ships  on  the  seas,  when  you  say  they  were 
enjoying  a  5  per  cent  differential  or  10  per  cent? 

Mr.  Farquhar,  No;  I  do  not  think  I  said  that.  I  think  the  mer- 
cantile marine  was  started  and  built  up  largely  b}'^  that  discrimination, 
by  the  disposition  shown  by  Congress 

Mr.  Hardy.  Do  you  think,  then,  that  if  up  to  1828  we  had  discrim- 
inating duties  that  would  have  carried  us  on  to  1861  ? 

Mr.  Farquhar.  I  think  so;  yes.  I  do  not  think  there  woidd  have 
been  any  falling  off  if  we  had  had  this  discriminating  duty,  up  to  1856, 
probably,  when  iron  took  the  place  of  wood  so  largely  in  ships. 
There  was  a  falling  off  then  when  England  had  the  advantage  in 
material. 

Mr.  H^vRDY.  I  confess  there  was  a  considerable  diminution  in  the 
percentage  of  our  trade  along  about  1856,  England  beginning  to  build 
better  ships. 

Mr.  Farquhar.  Yes;  it  commenced  to  fall  off  very  much  about 
that  time. 

Mr.  EU.RDY.  Did  you  ever  look  into  the  question  to  see  whether  the 
prosperity  of  the  American  merchant  marine  was  not  always  co- 
existant  with  the  fact  that  the  American  shipper  had  the  best  ship 
for  the  money  ? 

Mr.  Farquhar.  Yes;  those  grand  old  clipper  ships  they  used  to 
lun  were  the  best  on  the  ocean. 

Mr.  Hardy.  And  they  were  the  best  up  to  1856  ? 

Mr.  Farquhar.  Yes. 

Mr.  H.VRDY.  And  as  long  as  we  had  the  best  and  cheapest  ships  we 
won  our  way  on  the  seas,  didn't  we? 

]Mr.  Farquhar.  Yes;  that  is  true;  but  we  must  remember  there 
was  comparatively  little  difference  in  labor. 

Mr.  Hardy.  Yes;  and  just  as  soon  as  our  ships  commenced  to  cost 
more  than  they  cost  in  England  they  commenced  to  build  better 
vessels  and  began  to  crawl  up  on  us. 

Mr.  Farquhar.  Yes. 

Mr.  Hardy.  And  when  the  war  came  on  and  we  lost  part  of  our 
shipping  and  put  a  heavy  duty  on  shipbuildmg  material  and  it  began 
to  cost  us  more  to  build  ships  we  then  fell  still  further  behind,  and 
every  day  we  have  been  behind  has  been  a  day  when  our  vessels  cost 
from  50  to  100  per  cent  more  than  theirs. 

Mr.  Farquhar.  No,  not  altogether;  because  of  late  years  there  has 
been  comparatively  little  difference. 

Mr.  Hardy.  I  suppose  the  propulsion  we  already  had  toward  the 
bottom  of  the  sea  has  been  keeping  us  down.  But,  as  a  matter  of 
fact,  is  it  not  practically  impossible  for  this  nation  or  any  other  nation 
to  compete  on  the  open  seas  with  vessels  that  cost  50  to  100  per 
cent  more  than  the  vessels  of  their  competitors  ? 

Mr.  Farqltiar.  It  is  absolutely  impossible.  But  vessels  do  not 
cost  here  more  than  10  or  15  per  cent  more  than  in  England. 

Mr.  Hardy.  That,  of  course,  is  a  question. 

Mr.  Farqlhiar.  I  only  hear  it  from  our  builders  of  ships. 

The  Chairman.  I  do  not  think  any  shipbuilder  at  this  time  would 
insist  that  it  costs  any  more  to  build  a  ship  in  an  American  shipyard 
than  it  costs  abroad. 


166      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Farquhar.  No;  because  we  have  been  trying  to  buy  them- 


The  Chairman.  The  difference  in  cost  has  been  gradually  lessening 
during  the  years  I  have  been  in  Congress. 

Mr,  Farquhar.  Tliat  is  correct. 

Mr.  Hardy.  I  am  of  the  opinion  they  can  be  built  here  as  cheaply 
as  anywhere. 

Mr.  Farquhar.  That  is  shown  by  the  very  fact  that  I  can  export 
in  competition  with  every  nation  in  the  world.  Several  years  ago  I 
was  talking  with  an  English  manufacturer  who  was  manufacturing 
for  South  Africa  the  same  class  of  o;oods  that  I  was  making.  He 
told  me  what  the  goods  cost,  what  his  expenses  were.  He  said  at 
that  time,  which  was  a  good  many  years  ago — 1884 — "I  can  manu- 
facture those  goods  cheaper  than  you  can  in  America.  My  material 
is  cheaper;  my  iron  and  steel  are  cheaper."  "No/'  I  said,  "j^our 
labor  is  very  much  higher.  You  have  one  process  there  that  you 
pay  64  cents  for;  I  make  the  same  thing  for  6§  cents.  If  I  find  there 
are  enough  of  those  goods  wanted  to  warrant  it,  I  can  compete  with 
you  and  you  will  have  to  stop  making  them."  "All  right,"  he  said, 
"beat  me  if  you  can,"  Well,  some  time  later,  when  a  new  contract 
was  made,  the  contract  went  to  me  and  he  could  not  touch  it.  We 
made  a  profit  on  it  in  competition  with  England, 

Mr,  Hardy.  There  are  ways  of  meeting  competition  if  you  have  to. 

Mr,  Farquhar,  We  are  the  most  wasteful  and  careless  nation  on 
the  earth. 

Mr,  Hardy,  Is  it  not  your  opinion  that  just  so  long  as  our  ship- 
builders are  given  an  absolute  monopoly  in  the  coastwise  trade  and 
not  required  to  compete  for  it  they  are  very  likely  to  charge  more  for 
ships  than  if  they  had  to  compete  ? 

Mr.  Farquhar.  That  is  absolutely  true. 

Mr,  PIardy,  Has  it  occurred  to  you  that  in  all  the  discussions  of 
the  fading  away  of  our  merchant  marine  you  have  seen  very  little 
from  the  interested  parties  in  reference  to  that  difference  in  the 
cost  of  ships,  but  you  have  heard  about  wages  and  things  of  that 
sort,  and  about  our  restricted  and  antiquated  navigation  laws. 
Have  you  ever  found  anybody  who  could  tell  you  what  those  "anti- 
quated navigation  laws"  were? 

Mr,  Farquhar.  Not  anyone  who  could  give  a  complete  answer. 

Mr.  Hardy,  I  wish  you  would  inquire  from  now  until  the  next 
Congress,  and  if  you  find  anyone  I  would  like  for  you  to  report  it 
to  me. 

Mr.  Farquhar.  I  am  a  practical  business  man,  you  know 

Mr.  Hardy,  You  have  not  studied  the  law — — 

Mr,  Farquhar,  Yes;  I  have. 

Mr,  Hardy.  You  have  just  heard  that  song  about  the  antiquated 
laws? 

Mr.  Farquhar.  Yes;  I  can  not  give  you  a  satisfactory  answer, 
although  I  have  studied  it,  I  only  know  that  in  England  the  ship- 
pers are  all  encouraged,  and  in  this  country  they  seem  to  be  dis- 
couraged because  in  all  the  discussions  in  the  Houses  of  Congress 
there  has  been  no  disposition  to  encourage  the  shipbuilders  of  this 
country, 

Mr,  Hardy,  Can  you  find  any  law  that  is  on  our  statute  books 
that  the  shipowners  have  ever  asked  us  to  repeal?  Of  course, 
you  might  mention  the  seamen's  bill 


« 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MEECHANT  MAEINE.      167 

Mr.  FARQL^^AR.  Oh,  yes;  there  are  some  mistakes  there. 

Mr.  Hardy.  But  the  merchant  marine  had  gone  down  before  that. 
Now,  will  you  find  out  from  them  or  anybody  el^e  what  law  there  is 
on  our  statute  books  that  ship  owners  have  asked  us  to  repeal  ? 

Mr.  Farquiiar.  The  shipowners  have  not  taken  sufficient  interest 
in  their  ships,  except  in  domestic  trade,  as  you  say.  They  have  not 
organized  and  have  not  done  their  part;  I  am  willing  to  say  that. 
That  has  hurt  us  and  hurt  our  mercantile  marine. 

Mr.  Hardy.  Mr.  Hill  only  a  little  while  ago  made  the  statement 
that  the  cost  of  an  American  ship  was  from  50  to  100  per  cent  more. 

Mr.  Farquhar.  Mr.  Hill  made  a  mistake. 

Mr.  Hardy.  Possibly  he  did.  Even  if  it  is  25  per  cent,  or  even 
if  it  is  only  15  per  cent,  do  you,  as  a  business  man,  believe  that  any 
carrier  will  use  a  vessel  that  costs  15  per  cent  more  than  he  could  buy 
one  for  elsewhere  ? 

Mr.  P^ARQUHAR.  No;  and  it  is  possible  that  if  similar  subventions 
were  started  up 

Mr.  Hardy.  Does  it  occur  to  you  that  without  subvention  our 
shipowners  would  give  the  shipyards  the  same  support  if  you  would 
let  them  buy  them  ? 

Mr.  Farquiiar.  I  believe  that  if  our  navy  yards  were  encouraged 
to  run  at  their  full  capacity  tliey  could  buy  very  much  cheaper.  In 
England,  you  know,  they  have  standardized  the  shipbuilding  busi- 
ness until  they  can  turn  them  out  just  like  cutting  pieces  off  a  roll 
of  tape. 

Mr.  Hardy.  But  what  business  have  we  got  in  the  shipbuilding 
business  if  our  shipbuilders  can  not  standardize  as  well  as  any  other 
country  ? 

Mr.  Farquhar.  The  whole  trouble  is  in  starting  up.  If  they  are 
encouraged  to  start  I  believe  they  would  continue. 

Mr.  Hardy.  I  am  afraid  we  are  arguing  now. 

Mr.  Edmonds.  You  made  the  statement  to  Mr.  Hardy,  I  believe, 
that  you  thought  our  coastwise  trade  should  be  op^n  to  foreign  ships  ? 

Mr.  Farquhar.  Oh,  no. 

Mr.  Edmonds.  I  understood  that  you  did.  But  you  say  it  would 
be  a  good  thing  and  would  encourage  shipbuilding  if  the  coastwise 
trade  were  open.  Do  you  believe  it  is  a  good  thing  to  continue  our 
navigation  Jaws  so  our  coastwise  trade  can  be  protected? 

Mr.  Farquhar.  Oh,  yes;  I  think  it  should  be  protected. 

Mr.  Edmonds.  And  you  a-so  think  that  the  islands  of  Hawaii  and 
Porto  Rico  should  be  kept  in  our  coastwise  trade  ? 

Mr.  Farquhar.  I  think  they  should  be  kept  in  our  coastwise  trade. 
And  I  will  go  further  than  that:  I  think  they  ought  to  be  made  a  part 
of  the  country  really. 

Mr.  Edmonds.  Do  you  think  that  if  this  war  were  not  going  on  in 
Europe,  and  ordinary  conditions  prevailed  we  would  be  able  to  build 
ships  in  this  country  as  cheaply  as  they  do  in  Europe? 

Mr.  Farquhar.  Not  unless  we  built  them  in  large  quantities.  We 
would  have  to  arrange  to  build  them  in  large  numbers. 

Mr.  Edmonds.  Well,  wo  have  to  consider  that  this  war  is  not  going 
to  last  forever,  and  afterwards  this  bill  is  going  to  be  in  operation. 
Now.  you  do  not  think  for  a  minute  that  with  the  difference  between 
the  class  of  labor  in  this  country  and  the  class  of  labor  in  the  shipyards 


168      SHIPPING  BOAED,  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE. 

of  England  it  is  possible  to  build  a  ship  within  15  or  20  per  cent  of  the 
cost  of  an  English  ship,  do  you? 

Mr.  Farquhar.  Yes;  because  I  think  we  can  furnish  the  material 
cheaper.  The  making  of  steel  is  the  greatest  expense.  We  make  it 
cheaper  than  anywhere  else  in  the  world,  and  were  exporting  in 
large  quantities  even  before  the  war.  I  think  that  would  make  a 
difference  in  our  favor.  And  I  think  the  American  workmens  will 
do  more  than  English  workmen;  they  do  it  in  every  other  bu  iness 
that  is  standardized  and  run  on  a  large  scale.  The  shipbuilding  busi- 
ness heretofore  has  been  run  in  a  haphazard  way,  and  they  have  not 
built  them  anjwhere  near  as  cheaply  as  they  could. 

Mr.  Edmonds.  But  we  are  gradually  approaching  the  point  where 
we  can  build  them  cheaper? 

Mr.  Farquhar'.  I  think  we  can  come  within  about  5  per  cent  after 
the  war  is  over. 

Mr.  Edmonds.  Before  the  war  it  was  a  difference  of  40  per  cent  on 
the  same  class  of  ships? 

Mr.  Farquhar.  Oh,  no 

The  Chairman.  The  testimony  has  been  that  it  was  not  to  exceed 
25  per  cent,  and  before  the  war  in  recent  years  it  was  15  per  cent. 

Mr.  Edmonds.  There  was  published  in  the  Philadelphia  Ledger  a 
case  where  a  man  took  an  English  boat  and  an  American  boat  of  the 
same  class,  and  he  figured  that  the  difference  in  price  was  40  per  cent. 
This  was  about  two  years  before  the  war. 

Mr.  Farquhar.  It  was  the  same  class  of  ship  ? 

Mr.  Edmonds.  Possibly  it  might  have  been  a  ship  that  they  had 
standardized  and  we  had  not  standardized.  But  I  remember  very 
distinctly  taking  the  figures  at  the  time  and  figuring  out  it  was  about 
40  per  cent  difference. 

!Mr.  Hardy.  Let  me  say  right  there  that  last  year  a  shipowner  in  the 
oil  business  told  me  of  ordering  a  ship  here  for  which  he  paid  $600,000, 
which  he  could  have  got  abroad  for  $375,000. 

Mr.  Edmonds.  That  boat  is  being  built  by  Harlan  &  Hollingsworth 
at  Wilmington. 

Mr.  Hardy.  I  have  forgotten  the  details,  but  that  is  the  difference 
he  told  me. 

Mr.  Edmonds.  I  realize  that,  Mr.  Hardy.  I  realize  that  the  price 
is  growing  closer.  Wliether  that  situation  wiU  continue  after  the 
war  is  over,  I  do  not  know,  and  I  do  not  think  anybody  knows. 

Mr.  Farquhar.  So  many  have  been  killed  over  there  and  so  many 
ships  have  been  destroyed  I  have  an  idea  that  labor  will  advance  in 
price  after  the  war. 

Mr.  Edmonds.  I  would  not  be  surprised  myself. 

jVIi-.  Curry.  Are  you  acquainted  with  the  system  of  the  British 
Board  of  Trade  by  which  they  practically  compel  the  business  men 
of  Great  Britain  to  assist  in  building  up  their  merchant  marine  ?  I 
have  a  statement  here  and  wiU  give  it  to  you,  if  you  are  not. 

lyir.  Farquhar.  There  is  some  truth  in  that.  The  Government  is 
always  ready  to  help  them. 

Mr.  Curry.  The  Government  does  not  help  tramp  ships. 

The  British  Board  of  Trade  has  a  way  to  force  English  manufacturers,  exporters, 
and  importers  to  subscribe  for  minority  stock  in  privately-owned  vessels  and  to  make 
their  investments  permanent.  Such  required  investment  is  based  on  the  volume 
of  trade  of  the  indi\'idual  firm  or  corporation,  as  the  case  may  be. 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      169 

No  English  business  naan  dare  refuse  to  make  such  investment  wheri  requested.  If 
he  should,  he  would  be  punished  by  not  being  allowed  to  ship  his  goods.  He  would 
find  that  every  vessel  on  which  he  attempted  to  make  a  shipment  had  a  full  cargo. 

On  January  19,  1915.  the  Washington  Times  published  an  article  explaining  the 
English  method  of  building  up,  developing,  and  perpetuating  their  meichant  ma- 
rine. From  that  article  I  have  gathered  and  present  the  following  account  of  their 
system:  ® 

Subsidies  or  subventions  are  paid  to  certain  classes  of  liners,  and  private  invest- 
ments in  merchant  vessels  are  made  permanent.  All  British  merchant  ships  are 
divided  into  64  equal  shares.  The  ownership  of  33  shares  absolutely  control  her. 
The  managing  owners  hold  the  33  shares,  which  represent  control.  The  rest  are  dis- 
tributed among  investors,  and  the  investors  in  the  minority  shares  are  practically 
compelled  to  buy  them. 

Exporters,  importers,  and  manufacturers  are  requested  to  subscribe  for  the  mi- 
nority shares,  and  in  order  to  insure  the  shipment  of  their  goods  at  reasonable  rates 
they  find  it  to  their  advantage  to  do  so.  It  enables  them  to  import  and  export  their 
goods  at  reasonable  freight  rates  and  insures  a  market  and  a  profit  on  their  mer- 
chandise. 

The  managing  owner,  under  his  contract,  receives  2  per  cent  of  the  gross  freight 
earnings  plus  the  earnings  on  his  33  shares,  which  gives  him  a  large  return.  The 
average  minority  owner  rarely  receives  over  2  per  cent  on  his  investment  in  the  ship. 

The  managing  owners  always  write  into  their  contracts  a  provision  that  if  a  ship 
should  be  lost  and  the  insurance  collected,  that  the  insurance  money  shall  at  once  be 
reinvested  in  a  new  vessel.     It  is  never  distributed  to  the  shareholders. 

When  a  new  ship  is  turned  out  from  a  British  yard  it  is  registered  at  Lloyd's  as 
"A*  1*  100,"  the  highest  index  designation.  It  sails  under  that  designation  for  10 
years  and  is  insured,  with  its  cargo,  on  the  most  favorable  terms.  After  10  years  its 
rating  is  "A*  100,"  and  its  insurance  rates  are  higher.  When  the  vessel,  after  years 
of  use,  can  not  get  so  good  a  rating  of  insurance,  it  is  sold  and  transferred  to  some  foreign 
flag,  and  the  money  is  reinvested  in  a  new  ship. 

Mr.  Farquhar.  That  is  rather  exaggerated,  in-view  of  the  enormous 
amounts  that  stockholders  invest  in  England.  They  would  not  do  it 
if  they  did  not  make  as  good  or  better  returns  than  the}"  do  on  other 
investments.    You  mention  some  extreme  cases  there. 

The  Chairman.  From  what  are  you  reading,  Mr.  Curry? 

Mr.  Curry.  I  am  reading  from  a  speech  I  made  at  the  last  session 
of  Congress,  and  I  obtained  that  from  reliable  information. 

Mr.  Farquhar.  That  2  per  cent  is  the  average  though. 

Mr.  Curry.  They  could  not  get  more  than  2  per  cent.  That  comes 
from  a  British  source. 

Mr.  Farquhar.  You  try  that  source  again.  They  may  be  mis- 
taken. 

Mr.  Cuery.  That  is  where  the  business  men  are  forced  by  the 
British  Board  of  Trade  to  assist  m  building  up  the  British  merchant 
marine. 

Mr.  Farquhar.  The  all  important  thing  is  to  get  a  merchant 
marine.  You  all  admit  we  must  have  it.  We  must  have  it  for  the 
Navy  and  for  our  export  trade.  We  can  not  depend  upon  our  com- 
petitors to  carry  our  goods  with  any  safety  to  our  export  trade. 

Mr.  Greene.  I  have  been  unavoidably  absent  and  perhaps  you 
may  have  answered  this  question.  Outside  of  the  cost  of  the  vessel — 
which  seems  to  be  a  matter  of  doubt  in  the  mind  of  my  friend  from 
Texas,  Mr.  Hardy;  possibly  you  can  buy  just  as  cheaply  here  as  you 
can  abroad — have  you  taken  up  the  cost  of  runnmg  the  vessel  after 
it  is  built  ? 

Mr.  Farquhar.  Oh,  yes;  it  costs  more  under  our  present  laws, 
especially  under  the  seamen's  bill,  which  has  added  to  the  cost.  It- 
costs  more  than  it  costs  abroad,  unless  the  board  will  have  power  to 
license  and  equalize.  It  may  take  a  considerable  change  in  it  to 
give  them   that  power.     It  is  the  fuU-crew  idea  that  shipowners 


170      SHIPPIXG  BOAED,  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

object  to,  like  the  full-crew  provision  for  the  railroads  which  forces 
them  to  employ  men  who  have  nothing  to  do  at  all.  I  asked  a  rail- 
road man  a  short  time  ago  what  he  had  to  do,  and  he  replied,  "I  do 
not  do  anything  at  all  except  to  go  and  draw  my  pay." 

Then  the  language  test  is  all  wrong.  With  the  gre%t  majority  of 
seamen  it  does  not  make  a  bit  of  difference  whether  the.y  understand 
the  language  of  the  captain  or  not,  because  the  captain  does  not  give 
the  orders.  The  orders  all  go  through  the  subordinates,  and  we  ought 
to  be  privileged  to  employ  the  cheaper  labor  abroad. 

Those  restrictions,  of  course,  all  affect  the  shipping,  but  the  all- 
important  question  now  is  to  get  shipping,  and  I  am  sure  if  you  will 
look  into  it  as  carefully  as  we  business  men  have  been  forced  to  you 
will  see  it  is  absolutely  essential.  Whenever  a  bill  is  introduced 
that  will  give  us  those  ships  I  will  favor  it.  I  favor  the  present  bill 
as  a  start.  I  object  very  much  to  Government  owmership,  as  as  rule, 
and  especially  to  the  Government  running  the  vessels,  but  I  am 
willing  to  do  something  as  a  start. 

Mr.  Hardy.  In  other  words,  if  you  can  not  get  what  you  want 
you  will  take  the  next  best  thing? 

Mr.  Farquhar.  Certainly.  The  great  trouble  is  the  need  of  stand- 
ardization. Making  one  or  two  ships  of  different  styles  they  cost  so 
much  more  to  make  than  to  make  a  large  number  of  vessels  of  the 
same  style.  It  is  utterly  impossible  to  compete  in  any  manufacture 
unless  you  standardize. 

Mr.  RowE.  You  said  that  three  members  of  this  board  should  be 
familiar  with  shipping  ? 

Mr.  Farquhar.  Experts;  yes. 

Mr.  RowE.  Do  you  think  you  can  get  those  men  at  $10,000  a  year? 

Mr.  Farquhar.  Oh,  yes;  I  think  they  would  serve,  just  like  the 
members  of  our  Chamber  of  Commerce  of  the  United  States,  who 
give  a  large  portion  of  their  time.  Our  president  gives  all  his  time 
and  gets  nothing  at  aU  but  travehng  expenses — if  he  draws  them. 
I  have  never  asked  for  that.  We  find  we  are  doing  good;  we  are 
doing  a  great  deal  of  good,  and  that  is  fair  enough.  And  there  is  a 
large  number  of  business  men  who  have  that  feeling  that  they  are 
doing  good.  There  is  a  great  deal  more  of  that  patriotism  among 
business  men  than  you  would  suppose, 

Mr.  RowE.  And  you  believe  there  is  a  good  deal  of  patriotism 
among  shipping  men,  too,  do  you  not? 

Mr.  Farquhar.  Certainly. 

The  Chairman.  Do  you  think  the  bill  ought  to  define  the  class  of 
men  who  should  be  employed? 

Mr.  Farquhar.  I  think  so;  I  think  that  is  true,  and  there  would 
be  no  objection  then  to  having  the  Secretary  of  the  Navy  and  the 
Secretary  of  Commerce  on  the  board. 

Mr.  RowE.  Do  you  think  we  should  have  seven  members  if  the 
Secretary  of  the  Navy  and  the  Secretary  of  Commerce  are  members  ? 

Mr.  Farquhar.  I  would  prefer  having  it  seven;  yes.  I  would 
advocate  that  strongly. 

The  Chairman.  I  think  Mr.  Farquhar  has  made  some  very  valuable 
suggestions. 

Mr.  Farquhar.  I  wish  I  could  be  of  further  use,  and  I  wish 
you  would  get  together  and  give  us  some  ships.  I  am  sure  you  are  in 
earnest. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARIN  L.      171 

STATEMENT    OF    CAPT.     ELLSWORTH    P.     BERTHOLF,     COM- 
MANDANT   UNITED    STATES    COAST    GUARD— Resumed. 

The  Chairman.  I  do  not  recall,  Capt.  Bertholf,  just  where  you  left 
off  yesterday  afternoon.     Will  you  continue  your  statement  ? 

Capt.  Bertholp\  I  think,  Judge,  I  had  about  completed  the  state- 
ment concerning  the  naval  reserve  feature  in  section  1 1 . 

The  Chairman.  You  were  saying  something  about  the  personnel 
on  these  naval  reserve  vessels.  Now,  I  know  you  have  also  made  an 
investigation  of  the  oil-burning  steamships  and  also  of  the  types  of 
freight  carriers  using  the  Diesel  type  of  engine,  have  you  not  ? 

Capt.  Bertholf.  The  Secretary  asked  for  a  memorandum  con- 
cerning the  cost  of  operation  of  typical  ships  which  it  was  presumed 
would  be  used  under  the  shipping  bill.  We  have  made  the  memo- 
randum, but  it  is  rather  long,  and  perhaps  I  had  better  submit  it  for 
the  committee  and  make  a  general  statement. 

We  assumed  that  the  typical  cargo  ship  of  the  world  was  one 
having  the  following  dimensions:  Gross  tonnage,  4,665;  net  registered 
tonnage,  2,930;  dead  weight  cargo  capacity,  7,880;  steaming  radius, 
3,500  miles ;  average  sea  speed,  10^  knots;  indicated  horsepower,  2,500- 

The  Chairman.  Without  going  into  the  details,  have  you  worked 
out  the  different  costs  ? 

Capt.  Bertholf.  We  took  the  cost  of  operation  on  the  Pacific 
Coast,  and  compared  a  typical  new  American  ship,  with  Diesel  engine, 
American  crew,  American  wages,  and  American  standard  of  food, 
with  the  typical  existiiig  foreign  competitor  with  average  efficiency, 
of  steam  propulsion,  Asiatic  crew,  cheap  wages,  and  poor  food;  both 
these  vessels  making  five  or  six  round  trips  a  year  between  the  west 
coast  of  the  United  States  and  the  west  coast  of  South  America,  a 
distance  of  about  5,000  miles.  We  found  that  the  increased  annual 
cost  for  the  American  ship  under  this  plan  was  $17,472  for  the  cost 
of  the  wages  and  the  food,  the  food  being  estimated  at  50  cents  a  day 
for  American  ships  and  20  cents  for  foreign.  There  would  be  a  de- 
creased annual  cost  to  the  American  ship,  because  of  the  saving  in  the 
cost  of  oil  over  coal,  of  S18,664.  That  left  a  net  annual  saving  for 
the  American  ship  of  $1,175.  That  is  for  the  operation.  And  it 
should  be  stated  that  our  figures  are  based  on  conditions  as  they 
existed  prior  to  the  war. 

By  using  the  Diesel  engine  instead  of  the  steam  engine  there  would 
be  an  annual  increase  in  earning  cppacity  of  this  American  ship  of 
about  400  additional  tons  for  freight  space,  which  would  bring  an 
annual  revenue  of  $32,000.  That  would  give  in  favor  of  this  Ameri- 
can ship  an  annual  operating  return  of  $33,000 — that  is,  as  I  have  said, 
using  a  new  American  ship,  with  Diesel  installation,  American  crew, 
American  wages,  and  American  standard  of  living,  against  the  present 
existing  steamship  on  the  Pacific  coast 

Mr.  Edmonds.  While  you  are  on  that  subject,  may  I  ask  a  ques- 
tion? You  are  using  the  very  highest  type  of  ship  in  comparison 
with  the  very  cheapest  grade  of  ship  ? 

Capt.  Bertholf.  Precisely;  because  if  anyone  builds  a  ship  now 
he  would  ordinarily  build  the  most  economical  type,  and  not  an  out- 
of-date  uneconomical  type. 

Mr.  Edmonds.  Well,  there  is  no  special  hold  on  the  Diesel  engine. 
Any  nation  can  build  it. 


172      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MAEINK. 

Capt.  Bertholf.  That  is  true. 

Mr.  Edmonds.  In  fact,  it  is  a  German  invention  and  improved  by 
German  patents. 

Capt.  Bertholf.  That  does  not  stop  us  from  usin^  it. 

Mr.  Edmonds.  Any  shipbuilding  company  in  this  country  that 
builds  that  ship  has  to  pay  a  royalty  on  that? 

The  Chairman.  You  are  mistaken  in  that;  that  is  not  correct.  I 
had  occasion  to  investigate  it.  We  have  installed  the  Diesel  type  of 
engine  in  a  little  plant  in  my  home  town.  The  Allis-Chalmers  people 
build  the  Diesel  type  of  enghie;  the  Snow  people  build  it;  the  Busch- 
Sulzer  people  build  it.  Tliose  patents  have  run  out.  The  Diesel 
type — I  will  not  explain  the  process,  though  I  have  investigated  it 
thoroughly,  but  anybody  can  build  an  engine  of  that  type  now. 

Mr.  Edmonds.  I  will  agree  with  you  fully  on  that  point;  but  it 
has  been  found  that  for  the  successful  operation  of  the  ship  it  is 
necessary  to  use  inventions  perfected  by  another  inventor — a  Mr. 
Bolinger,  I  believe  it  is.  That  is  a  patent  that  is  in  existence  to-day, 
and  the  New  York  Shipbuilding  Co.  and  another  company  are  licensed 
under  that  patent  to  make  these  ships.  I  am  infonned  by  a  Danish 
captain,  with  whom  I  talked  recently,  that  these  ships  can  not  be 
operated  successfully  with  the  ordinary  type  of  Diesel  engine,  and 
that  is  one  reason  why  the  patent  has  run  out  without  very  many 
of  the  engines  being  installed  in  the  marine  service.  The  new  patent 
has  made  the  operation  of  these  ships  successful,  and  all  German 
ships  and  all  Danish  ships  that  are  now  being  built  are  using  this 
patent,  and  it  is  only  recently,  within  the  last  month,  that  the  New 
York  Shipbuilding  Co.  and  another  company  in  this  country  have 
been  licensed  under  that  patent  to  use  it. 

The  Chairman.  But  the  Diesel  principle 

Mr,  Edmonds.  I  agree  with  the  chairman  on  the  first  point,  of 
course.     I  am  not  contesting  that  at  all. 

The  Chairman.  Tliere  may  be  something  added  to  it  that  is 
patented. 

Mr.  Curry.  I  think  it  would  be  nothing  but  fair,  if  the  captain 
has  it  in  his  mind  or  can  get  the  infoiTnation,  if  he  would  let  us  know 
the  difference  in  cost  in  rumiing  a  Norwegian  ship,  say,  and  an 
American  ship  of  sunilar  type  with  a  Diesel  engine.  My  informa- 
tion is  that  Nonvay  is  transforming  all  of  her  ships  to  the  Diesel 
system. 

Capt.  Bertholf.  Perhaps  I  should  explain  this  former  statement. 

Mr.  CuTiRY.  That  would  be  better.  I  would  like  to  know  exactly 
the  difference  in  cost. 

Capt.  Bertholf.  The  very  pertinent  suggestion  was  made  that 
other  countries  could  build  these  ships  as  well.  That  is  quite  true, 
but  this  memorandum  was  made  for  the  purpose  of  ascertaining 
what  could  be  done  if  a  building  program  were  entered  upon,  and 
naturally  anybodj'  building  ships  would  make  use  of  the  best  type, 
both  hull  and  machinery.  It  may  be  said  that  our  foreign  com- 
petitors can  also  build  these  ships,  which  is  quite  true;  but  the  fact 
remains  that  they  are  handicapped  by  their  existing  fleets  of  coal- 
burning  vessels,  with  expensive  types  of  steam  machinery  which 
can  not  be  scrapped.  This  ^vill  give  this  country  an  advantage  for 
a  period  of  at  least  six  years. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      173 

Mr.  Curry.  Would  it  be  possible  to  change  one  of  those  coal- 
burning  ships  into  a  Diesel  engine  ship  ? 

Capt.  McAllister.  It  would  not  be  practicable. 

Capt.  Bertholf.  I  am  speaking  now  of  the  fleet  which  would  be 
contemph-ied  possibly  under  the  shipping  board.  What  could  they 
do  ?  They  would  naturally  build  the  modern  types.  Then,  if  you 
take  the  types  of  existing  ships  with  which  we  must  compete — they 
can  not  throw  those  ships  away,  and  Capt.  McAllister  says  that  from 
an  engineering  standpoint  tliey  can  not  transform  them. 

Capt.  McAllister.  They  can  transform  them,  but  it  would  cost 
too  much. 

Mr.  Curry.  But  the}^  coidd  build  new  ships. 

Capt.  Bertholf.  Oh,  yes. 

Mr.  Curry.  Then  how  would  the  cost  of  running  compare  ? 

Capt.  Bertholf.  But  while  that  is  going  on  we  will  have  a  start 
on  this  thing. 

Mr.  Curry.  Not  if  they  would  commence  to  build  as  we  do. 

Capt.  Bertholf.  They  would  not  build  at  once. 

Mr.  RowE.  Some  nations  might — like  Norway. 

The  Chairman.  There  would  not  be  that  same  necessity  on  their 
part,  assuming  that  their  steam-driven  ships  can  be  operated  under 
existing  conditions  more  cheaply  than  we  can  operate  ships.  In 
other  words,  they  would  continue  to  use  their  existing  vessels,  whereas 
we  would  at  once  adopt  this  new  type  to  compete  with  their  ships. 

Mr.  Edmonds.  We  nave  another  advantage  in  favor  of  our  country 
in  this  respect;  that  is,  that  we  virtually  have  control  of  the  oil  supply. 

Capt.  Bertholf.  Sixty  per  cent. 

Mr.  Edmonds.  Have  you  ever  considered  the  very  dangerous 
position  in  which  they  would  be  if  they  could  not  get  oil  ?  That  is,  to 
my  mind,  one  of  the  reasons  for  the  trouble  in  Mexico — the  increas- 
ing use  of  oil  in  marine  vessels  and  the  increasing  demand  on  the 
Mexican  Government  for  concessions  for  oil  from  different  nations 
in  an  endeavor  to  make  themselves  independent  of  the  United  States 
as  to  oil  supply. 

Mr.  Curry.  Norway,  I  understand,  is  changing  all  her  sailing  ves- 
sels and  installing  Diesel  engines. 

Capt.  McAllister.  It  is  impracticable  at  present  to  build  Diesel 
engines  of  more  than  2,500  horsepower  in  one  unit.  With  twin 
screws  that  gives  you  5,000  horsepower.  For  anything  above  5,000 
horsepower  they  have  to  resort  to  steam.  There  are  eight  Norwe- 
gian steamships  being  built  in  this  country  now,  at  Chester.  They 
are  all  probably  of  more  than  5,000  horsepower,  and  for  that  reason 
they  are  all  going  to  be  steam  driven,  using  the  new  turbine  reduction 
gear. 

Mr.  Curry.  Do  you  understand  that  they  are  putting  these  engines 
in  their  sailing  ships  ? 

Capt.  McAllister.  A  few,  I  think.     But  auxiliary  vessels  do  not 

to  more  than  6  or  8  knots  an  hour  with  these  Diesel  engines;    they 
ardly  get  up  to  10. 
Mr.  Curry.  They  will  use  both  ? 

Capt.  McAllister.  Both  sail  and  auxiliary  power;  yes,  sir.  For 
anything  above  5,000  horsepower  they  can  not  at  present  use  the 
Deisel  engine.     We  have  only  used  them  in  this  country  a  short  time. 

32910—16 12  • 


174      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Thei  e  is  one  large  Diesel  engine  being  built  in  this  country,  and  that  is 
in  the  Brooklyn  Navy  Yard,  for  a  collier,  the  Maumee. 

Mr.  Loud.  What  power  is  that  being  built  for? 

Capt.  McAllister.  I  think  she  is  a  twin-screw  vessel  of  about 
5,000  horsepower. 

Mr.  Edmonds.  About  how  fast  would  you  think  that  5,000  horse- 
power would  drive  an  average  coasting  vessel? 

Capt.  McAllister.  About  10  or  11  knots.  Freight  vessels  do  not 
try  to  go  more  than  10^  or  11  knots. 

Mr.  Edmonds.  I  understood  from  the  captain  of  this  ship  I  was  on 
that  he  could  make  about  10  or  12  knots. 

Capt.  McAllister.  They  might  get  up  to  12. 

Mr.  Curry.  Diesel  engines,  then,  would  not  be  suitable  for  naval 
reserve  purposes? 

Capt.  McAllister.  I  think  so. 

Ml'.  Curry.  You  think  that  a  ship  propelled  by  a  Diesel  engine 
would  be  good  for  naval  auxiliary  purposes  ? 

Capt.  McAllister.  It  would  for  bulk  carriers;  of  course,  not  for  fast 
transports. 

Mr.  Curry.  Not  for  oil  carriers  or  anything  of  that  kind  ? 

Capt.  McAllister.  Oh,  yes;  for  fuel  ships  they  would  be  all  right. 
That  is  the  way  one  of  the  naval  colliers  is  being  equipped  now. 

Mr.  Loud.  Wliat  power  do  they  put  into  naval  coUiers  of  the 
Neptune  class  ? 

Capt.  McAllister.  About  6,000  or  7,000  horsepower. 

Mr.  Loud.  That  would  be  too  much  for  this  type  of  engine  ? 

Capt.  McAllister.  That  would  be  too  much;  they  would  use 
steam.  They  have  used  steam-driven  reciprocating  engines  in  all 
the  colliers,  except  one  building  with  Diesel  engine,  one  with  reduc- 
tion gear,  and  one  with  electric  drive. 

Ml'.  LoLT).  There  is  one  with  electric  drive  building  now,  or  already 
built? 

Capt.  McAllister.  Only  one  already  built,  but  from  now  on  they 
wiU  probably  put  in  the  reduction  gear. 

Mr.  Kincheloe.  You  say  that  oil-burning  engines  of  more  than 
2,000  horsepower  are  not  economical  ? 

Capt.  McAllister.  In  one  unit  it  is  impracticable  to  use  over 
2,500  horsei)Ower.     It  is  not  a  question  of  their  economy. 

Mr.  Kincheloe.  Wliy  can  they  not  use  more  than  2,000  horse- 
power ? 

Capt.  McAllister.  The  limitation  comes  in  the  size  of  the  cylinder. 
The  heat  is  so  intense  that  cast  iron  will  not  stand  it.  It  is  internal 
combustion,  you  know,  with  the  fire  right  agamst  the  iron.  When 
you  get  a  cjdmder  up  to  25  to  28  inches  in  diameter,  you  can  keep  it 
cool  with  circulating  water,  but  above  that  the  heat  is  so  mtense 
that  you  can  not  cool  it.  Cylinders  of  that  size  develop  about  250 
to  400  horsepower,  and  you  have  about  six  cylinders  to  one  engine. 
They  do  not  get  much  more  than  2,000  horsepower  on  account  of  in- 
ability to  cool  the  surface  properly.  No  metal  will  stand  that  intense 
heat.     That  is  what  limits  the  size  of  the  Diesel  engines. 

The  Chairman.  Capt.  Mc^Ulister  has  that  whole  matter  worked 
out  very  carefully,  I  know.  I  have  a  copy  of  his  memorandum,  and 
I  suggest  that  it  go  into  the  record, 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      175 

Mr.  Loud.  Is  the  Diesel  engine  suitable  for  high  speeds,  as  in 
destroyers,  for  example  ? 

Capt.  McAllister.  No,  sir. 

Mr.  LoLT).  It  is  not  suitable  for  them  ? 

Capt.  McAllister.  No;  they  can  not  get  the  horsepower.  Those 
vessels  use  from  10,000  to  16,000  horsepower  and  the  oil  engines  will 
not  develop  that. 

The  C'hairivl4.n.  I  think  both  those  memoranda  are  very  valuable 
and  will  ])rove  of  intense  interest  if  you  wiU  put  them  in  the  record. 

(Tile  memoranda  are  as  follows:) 

Shipping  Bill — Costs  of  Operation — Typical  Ships,  Using  Average  Wage  and 
Freight  Rates  Which  Obtained  Before  the  European  War. 

In  the  report  of  the  discussion  of  the  relative  merits  and  costs  of  different  types  of 
ship-propelling  machinery,  which  took  place  at  successive  meetings  of  the  Northeast 
Coast  Institute  of  Engineers  and  Shipbuilders  in  England,  it  was  decided  that  the 
typical  cargo  ship  of  the  world  at  the  present  time  is  one  having  the  following  dimen- 
sions, etc.: 

Gross  tonnage 4,  665 

Net  registered  tonnage 2,  930 

Dead-weight  cargo  capacity 7,  880 

Steaming  radius 3,  500 

Average  sea  speed  (knots) 10^ 

Indicated  horsepower 2,  500 

A  large  proportion  of  the  proposed  naval  auxiliary  reserve  fleet  contemplated  by 
the  shipping  bill  will  naturally  be  vessels  of  that  size.  In  order  to  compare  the  rela- 
tive costs  of  operation  of  an  American  vessel  and  of  the  average  existing  foreign  com- 
petitor in  the  Pacific  Ocean,  this  type  of  vessel  will  be  used.  The  cost  of  wages  and 
of  fuel  are  the  main  items  of  expense  in  the  operation  of  any  vessel.  This  vessel  will 
have  a  crew  of  44  officers  and  men.  From  various  sources  it  is  found  that  the  cost  of 
wages  per  month  on  the  Pacific  Ocean  for  an  American  vessel  with  an  American 
crew  was  $2,210  ($26,520  per  annum)  while  for  the  average  foreign  competitor  with 
Asiatic  crew  it  was  $1,150  per  month  ($13,800  per  annum).  The  American  vessel 
was  thus  handicapped  in  the  Pacific  trade  with  an  additional  cost  of  $1,060  per  month 
on  wages  alone  ($12,720  per  annum),  which  it  is  claimed  is  the  principal  item  in  the 
difference  in  cost  of  operation. 

Assuming  that  our  typical  new  freighter  is  equipped  with  the  modern  type  of  Diesel 
engine,  burning  crude  oils  by  internal  combustion,  there  will  be  certain  elements  of 
economy  of  operation  incident  to  this  type  of  propulsion,  as  follows: 

1.  Less  cost  of  wages  of  operating  force,  due  to  the  smaller  number  of  men  required. — 
There  seems  to  be,  in  the  opinion  of  experts,  a  question  as  to  the  economy  of  operation 
of  a  Diesel  engine  (excluding  cost  of  fuel)  due  to  higher  initial  cost,  greater  insurance 
rates,  and  possibly  greater  cost  of  repairs,  altliough  the  preponderance  of  opinion 
points  out  that  there  is  a  tangible  saving  in  cost  of  operation.  For  the  purpose  of  this 
comparison  this  item  will  be  ignored,  in  order  to  be  entirely  conservative. 

2.  Less  cost  of  fuel  for  operation. — There  is  absolutely  no  question  concerning  the 
great  saving  in  cost  of  fuel.  To  arrive  at  a  comparison  we  will  assume  this  typical 
freighter  as  operating  between  San  Francisco,  Cal.,  and  Valparaiso,  Chile,  and  that  she 
makes  only  five  round  trips  per  annum.  Tlie  distance  between  ports  is  5,140  miles. 
On  each  voyage  the  average  consumption  of  oil  will  be  231  tons,  the  same  ship,  fitted 
with  the  average  steam  machinery  using  coal,  will  use  597  tons.  The  cost  of  coal  on 
the  Pacific  coast  may  be  taken  at  $6  per  ton,  and  of  oil  at  $7  per  ton.  Applying  these 
factors,  we  find  a  saving  in-cost  of  fuel  each  one-way  voyage  of  $1,965,  or  $19,650  for 
five  round  trips. 

3.  Gain  in  freight-carrying  capacity,  owing  to  less  space  occupied  by  the  propelling 
machinery,  and  less  space  necessary  for  storing  fuel,  which,  it  has  been  demonstrated,  can 
be  carried  in  a  ship's  double  bottom — a  space  in  steam-propelled  vessels  heretofore  utilized 
only  for  water  ballast. — The  increased  capacity  incident  to  Diesel-engined  ships  is 
variously  estimated  by  writers  on  the  subject  as  from  5  to  10  per  cent  on  the  dead  weight 
cargo  rating.  To  be  well  within  conservative  limits,  the  assumption  is  made  in  the 
typical  ship  that  her  dead-weight  capacity  is  increased  from  7,880  to  8,280  tons  (400 


176      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

tons) ,  a  trifle  over  5  per  cent.  Prior  to  the  existing  war  the  freight  rates  between  Chile 
and  the  United  States,  on  the  average  of  all  bulk  commodities,  is  shown  by  the  Consular 
Reports  to  have  been  approximately  $12  per  ton.  At  the  present  time  they  have  in- 
creased about  80  per  cent  over  that  figure,  and  in  the  case  of  nitrates,  the  principal 
article  of  export,  the  increase  has  been  100  per  cent.  Again,  taking  a  conservative 
estimate,  we  will  assume  an  average  freight  rate  of  but  $8  per  ton,  weight  or  measure- 
ment. In  a  400-ton  increase  in  capacity  this  will  amount  to  $3,200  per  one-way 
voyage,  or  $32,000  per  annum  for  five  round  trips,  in  favor  of  the  typical  ship  having 
Diesel  engines. 

RESUME — PACIFIC   COAST. 

Typical  new  American  ship  with  Diesel  engines,  American  crew,  American  wages, 
and  American  standard  of  food,  versus  typical  existing  foreign  competitor  with 
average  efficiency  of  steam  propulsion,  Asiatic  crew,  cheap  wages,  and  poor  food, 
both  vessels  making  five  round  trips  a  year  between  the  west  coast  of  the  United 
States  and  the  west  coast  of  South  America,  a  distance  of  about  5,000  miles: 

Increased  annual  cost  for  American  ship: 

Wages  of  44  officers  and  men $12,  720 

Food  at  50  cents  per  day  instead  of  20  cents 4,  752 

$17,472 

Decreased  annual  cost  for  American  ship: 

Saving  in  cost  of  oil  fuel  over  coal 18,  644 

Net  annual  saving  for  American  ship 1, 172 

Annual  increase  in  earning  capacity  of  American  ship  from  400  tons  addi- 
tional freight  space 32,  000 

Operating  returns  in  favor  of  American  ship,  per  annum 33, 172 

ATLANTIC   COAST. 

For  the  typical  bulk  carrier  on  the  Atlantic  coast  the  conditions  are  somewhat 
different  from  those  on  the  Pacific  coast,  as  follows: 

1.  The  difference  in  cost  of  crews  was  less,  as  competitive  vessels  in  these  waters 
do  not  operate  with  Asiatic  crews,  and  their  standard  of  food  is  higher  than  for  Asiatic 
crews. 

The  American  scale  of  wages  for  officers  and  crew  can  be  taken  a^  the  same  as  those 
for  corresponding  vessels  on  the  Pacific  coast,  but  for  foreign  competitors  with  Cauca- 
sian crews  on  the  Atlantic  coast  the  average  wage  scale  for  the  typical  freighter  will  be 
approximately  $1,500  per  month  ($18,000  per  annum).  Food  cost  30  cents  per  day  at 
least. 

2.  Coal  being  more  plentiful  and  the  various  seaports  nearer  to  the  mines,  the  cost 
is  less  than  on  the  Pacific  coast.  The  ports  on  the  North  Atlantic  particularly  are 
farther  removed  from  the  oil  wells,  and  in  consequence  the  average  cost  of  oil  is 
higher  than  on  the  Pacific  coast. 

The  average  cost  of  coal  at  various  Atlantic  ports  will  be  $4  per  ton,  while  the 
average  cost  of  fuel  oil  should  be  taken  at  $8.75  per  ton,  a  price  somewhat  above  the 
normal  average. 

The  average  length  of  voyage  will  be  assumed  the  same  as  from  San  Francisco  to 
Valparaiso  (5.140  miles),  as  the  distance  from  New  York  to  Rio  Janeiro  is  4,441  miles, 
and  from  New  York  to  Montevideo  is  5,497  miles.  The  freight  rates  are  approximately 
the  same  as  those  on  the  Pacific  coast,  and  for  purposes  of  comparison  we  \vill  assume 
it  to  be  an  average  of  only  $8  per  ton,  weight  or  measurement  freight. 

Apphdng  these  modifications  for  the  Atlantic  coast  to  the  typical  freighter  assumed 
we  would  have  the  following: 

RESUME — ATLANTIC   COAST.  ■ 

Typical  new  American  ship  with  Diesel  engines.  American  crew.  American  wages, 
and  American  standard  of  food  versus  tyi^ical  existing  foreign  competitor  with 
average  efficiency  of  steam  propulsion,  European  crew,  fair  wages,  and  fair  food, 
both  vessels  making  five  round  trips  a  year  between  the  east  coast  of  the  United 
States  and  the  east  coast  of  South  America,  a  distance  of  5.000  miles. 

Increased  annual  cost  for  American  ship: 

Wages  of  44  officers  and  men $8,  520 

Food  at  50  cents  per  day  instead  of  30  cents 3,  204 

$11,  724. 00 


SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  ^MERCHANT  MARINE.      177 

Decreased  annual  cost  for  American  ship: 

Saving  in  cost  of  oil  fuel  over  coal $7,  672.  00 


Net  annual  loss  for  American  ship 4,  052. 00 

Annual  increase  in  earning  capacity  of  American  ship  from  400  tons  addi- 
tional freight  space 32,  000.  00 

Operating  returns  in  favor  of  American  ship  per  annum 27,  948.  00 

SHIPS  FOR   PASSENGERS  AND   FREIGHT. 

As  has  been  stated,  the  larger  mimber  of  the  proposed  naval  auxiliary  fleet  will 
naturally  be  freight  carriers,  and  consequently  of  slow  and  economical  speed.  While 
the  internal-combustion  engine  is  peculiarly  adapted  to  this  class  or  merchant  vessel , 
there  are  limitations  to  the  size  of  this  engine.  Under  existing  conditions  it  would 
be  impracticable  to  use  internal-combustion  engines  of  above  5.000  horsepower  (twin 
screw),  and  the  use  of  the  Diesel  engine  is  therefore  practically  limited  to  slow  freight 
ships  of  not  exceeding  5.000  gross  tons. 

There  would  be  in  this  fleet  of  board  ships  a  number  of  A^essels  of  about  6,500  gross 
tons  and  18-knot  maximum  speed,  for  passenger  and  high-class  freight  service,  and 
such  vessels  would  be  utiUzed  in  time  of  war  as  transports.  This  class  of  vessel  re- 
quires machinery  of  over  5,000  horsepower,  which  is  beyond  the  limit  of  power  for 
which  internal  combustion  engines  may  be  used.  However,  such  great  progress  has 
been  made  in  steam  machinery  that  a  very  pronounced  saving  in  fuel  can  be  made 
by  modern  installations.  Upon  certain  routes,  where  American  steamship  lines  are 
desirable,  further  economies  may  be  made  by  burning  oil  instead  of  coal. 

As  illustrative  of  what  can  be  accomplished  in  the  South  American  trade  we  will 
make  the  following  comparisons: 

The  steamship  Havana,  of  the  Ward  Line,  running  to  the  West  Indies,  is  of  the 
typical  size,  and  the  following  data  are  well  authenticated.  This  ship  was  built  in 
1907  and  consequently  represents  a  vessel  somewhat  more  efficient  than  the  average 
of  all  passenger  steamers  of  similar  size  and  ty]:>e. 

Gross  tonnage 6,  391 

Dead-weight  capacity 5,  084 

Horsepower 5,  000 

Bunker  capacity  (tons) 1, 010 

Speed  at  sea  (average  knots) 16.  6 

Coal  consumpti3n  per  day  (tons) 145 

Number  of  crew  (mcluding  39  firemen  and  coal  passers) 147 

Monthlv  wage  cost |5,  623 

Cost  of  food  ($12  per  man) $1,  740 

The  same  data  would  apply  to  the  typical  existing  foreign  vessel  to  be  met  in  com- 
petition, with  the  exception  of  wages  and  food.  The  pay  and  cost  of  food  for  the  for- 
eign slii]3  was  practically  30  per  cent  less.  Hence  we  would  have  for  the  operating 
ex]ienses  of  the  average  existing  coal-burning  foreign  steamer  the  following,  taking  a 
3,200-mile  8-day  voyage,  or  one  roimd  trip  per  month: 

Waoes  (70  per  cent  of  $5,623) $3,  936 

Food  (70  per  cent  of  $1,740) 1,  218 

Fuel  (145  tons  per  day,  at  $4  per  ton,  16  days) 9,  280 

Monthly  operatir)n  charges,  existing  foreign  steamer 14, 434 

In  the  proposed  American  steamer  with  up-to-date  geared  turbine,  burning  oil  fuel, 
the  crew  would  be  reduced  to  124  men  by  cutting  out  21  men  from  the  fireroom  force 
and  2  from  the  steward's  force.  There  would  be  also  a  decided  decrease  in  fuel  con- 
sumption, so  that  the  operating  expenses  would  be  as  follows  for  the  same  service: 

Wages,  124  men  at  American  rates  ($5,623— $1,080) $4,  543 

Food,  124  men  at  $12  per  month 1, 488 

Fuel  (65  tons  of  oil  per  day,^at  $8.75  per  ton)  for  16  steaming  days 9, 100 

Monthly  operation  charges,  new  American  steamer 15, 131 

In  addition  the  oil-burning  American  vessel,  by  carrj^ing  this  fuel  oil  in  her  double 
bottoms,  will  gain  at  least  10  per  cent  in  her  freight-carrj-ing  capacity,  or,  at  a  very 
conservative  estimate,  she  can  carry  500  tons  additional  revenue-producing  freight. 

Note. — The  proportionate  gain  in  freight-carrying  space  is  greater  in  a  faster  vessel 
than  in  a  slow  one.     The  faster  a  vessel  the  greater  must  be  her  bunker  space,  which 


178      SHIPPIXG  BOARD,  KAVAL  AUXILIARY,  AXD  MERCHANT  MARINE. 

correspondingly  reduces  the  freight  space.  Hence,  when  bunkers  are  eliminated  and 
oil  carried  in  double  bottoms  there  is  a  greater  proportionate  gain  in  freight-carrying 
capacity  than  in  slower  vessels,  which  do  not  have  to  carry  so  much  fuel. 

A  very  conservative  freight-rate  estimate  for  a  3,200-mile  voyage  is  $4  per  ton 
(weight  or  measurement).  One  round  trip  per  month  would  give  an  increased  earn- 
ing capacity  of  $4,000  in  favor  of  the  American  vessel  (500  tons  additional  freight  at 
$4  each  way). 

A  further  sa\dng  in  oil-burning  vessels  is  a  marked  reduction  in  the  cost  of  upkeep 
of  boilers,  cost  of  painting  the  ship,  etc.,  which  items,  however,  are  ignored  in  this 
comparison. 

RESUME — ATLANTIC   COAST. 

Typical  new  fuel  oil  burning  ship  with  geared  turbines,  American  crew,  American 
wages,  and  American  standard  of  food,  versus  typical  existing  foreign  competitor 
with  average  efficiency  of  steam  propulsion,  European  crew,  fair  wages,  and  fair 
food,  both  vessels  making  one  round  trip  a  month  between  the  Atlantic  Coast  of  the 
United  States  and  the  east  coast  of  South  America  on  a  route  of  3,200  miles. 

Increased  annual  cost  for  American  ship: 

Wages $7,  284 

Food 3,  240 

110, 524.  00 

Decreased  annual  cost  for  American  ship: 

Savingin  cost  of  oil  fuel  over  coal 2, 160.  00 

Net  annual  loss  for  American  ship .-. 8,  364.  00 

Annual  increase  in  earning  capacity  of  American  ship  from  500  tons  addi- 
tional freight  space 48,  000.  00 

Operating  returns  in  favor  of  American  ship,  per  annum 39,  636.  00 

To  illustrate  what  actually  has  been  done  on  the  Pacific  coast,  the  follo^ving  data 
concerning  the  5,218-ton  American  steamship  President  is  quoted  from  "'International 
Marine  Engineering"  of  July,  1914  (p.  283-284): 

"The  President,  which  has  just  returned  to  service,  has  been  converted  at  the 
Seattle  yards  on  a  contract  working  time  of  35  days.  Her  capacity  is  5,600  barrels  of 
oil  and  on  her  maiden  run  following  the  change  this  fast  steamer  added  one  knot  to 
her  steaming  speed. 

"In  making  the  oil  installation  the  vessel's  double  bottom  was  converted  into  fuel 
tanks  to  carry  her  capacity. 

"Using  coal,  this  vessel  formerly  filled  her  bunkers  with  about  1,350  tons  upon 
each  call  at  Seattle.  The  operation  required  9  working  hours,  which  frequently 
meant  from  12  to  15  hours,  including  waste  time.  Now  the  vessel  can  fill  her  tanks 
while  working  cargo,  thereby  having  a  considerable  saving  in  time,  which  is  no  in- 
significant item  because  these  vessels  are  almost  constantly  moving  and  rimning  on 
a  schedule  almost  as  good  as  that  of  an  express  train. 

"Roughly  estimating  the  value  of  coal  at  §3.30  per  ton,  and  that  of  fuel  oil  at  80 
cents  per  barrel  (S5.60  per  ton),  it  is  figured  that  the  President  will  effect  a  saving  in 
fuel  cost  alone  of  between  $800  and  $1,000  per  voyage.  (She  makes  four  voyages  each 
month.) 

"There  are,  however,  other  importaat  features  of  oil  burning  which  appeal  to  her 
owners.  With  the  elimination  of  coal  bunkers  each  vessel  has  approximately  600 
tons  of  additional  cargo  space,  which  is  of  much  value  considering  the  demand  for 
such  space,  especially  at  certain  seasons.  Probably  the  most  important  economy 
effected,  however,  is  that  in  crew.  Formerly  the  President  carried  a  total  of  136 
men,  and  nou-  her  roster  is  but  113.  The  reduction  of  23  men  is  apportioned,  21  men 
in  the  engine  department  and  2  in  the  steward's  department,  the  latter  being  elimi- 
nated following  the  reduction  of  the  fireroom  force.  Whereas  the  engine-room_  crew 
formerly  numbered  44,  there  are  now  but  23  required.  In  addition  to  the  saving  in 
wages  and  subsistence  of  these  men,  the  quarters  formerly  occupied  by  them  have 
been  turned  into  added  cargo  space." 

Of  course,  it  may  be  said  that  our  foreign  competitors  can  also  build  these  modem 
ships,  but  the  fact  remains  that  they  are  handicapped  by  their  existing  fleet  of  coal- 
burning  vessels  with  expensive  types  of  steam  machinery,  which  they  can  not  afford 
to  put  into  the  scrap  heap.  This'will  give  us  an  advantage  for  a  period  of  at  least  six 
years  before  the  competing  fleets  can  be  brought  up  to  the  same  state  of  efficiency  as 
this  proposed  American  fleet  of  new  ships. 

The  United  States  is  peculiarly  well  endowed  by  its  natural  resources  to  enter  into 
a  world-wide  competition  in  shipping,  since  it  will  be  reduced  to  a  battle  for  the 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      179 

supremacy  in  economical  equipment.  Oil  will  be  the  most  vital  factor  in  this  com- 
petition, on  account  of  its  many  advantages,  and,  as  is  well  known,  60  per  cent  of  the 
world's  supply  is  within  the  borders  of  the  United  States.  It  is  a  matter  of  common 
knowledge  that  American  shipowners  are  deterred  at  present  from  equipping  their 
new  vessels  for  oil  burning  owing  to  the  extreme  fluctuations  in  the  price  of  oil.  For- 
tunately, the  Government  has  reserved  large  tracts  of  oil-producing  lands  from  the 
public  domains,  and  should  the  machinations  of  private  producers  tend  to  deter  the 
development  of  our  merchant  marine,  it  is,  of  course,  possible  to  resort  to  the  Govern- 
ment's own  oil  supply. 

Note. — While  the  foregoing  comparisons  were  based  on  wage  scales  and  freight 
rates  as  they  existed  prior  to  the  war,  it  should  not  be  overlooked  that  since  the  out- 
break of  war  the  wage  scale  on  foreign  ships  has  increased  rapidly,  until  at  the  present 
time  it  approximates  the  American  scale  of  wages.  Freight  rates  have  increased 
enormously  as  is  generally  known. 

If  there  is  nothing  further  from  Capt,  Bertholf,  we  will  ask  Mr. 
Chamberlain  to  come  before  the  committee. 

STATEMENT   OF   HON.    EUGENE   T.    CHAMBERLAIN,    COMMIS- 
SIONER OF  NAVIGATION,   DEPARTMENT  OF  COMMERCE. 

The  Chairman.  You  have  held  the  position  of  Commissioner  of 
Navigation  how  long,  Mr.  Chamberlain  ? 

Mr.  Chamberlain.  Since  1893,  in  December. 

Ml*.  Chairman  and  gentlemen,  by  the  courtesy  of  the  chairman  I 
come  before  the  committee  for  a  few  minutes  to  make  a  statement  in 
regard  to  the  ''antiquated  navigation  laws"  which  have  been  re- 
ferred to  by  several  of  the  gentlemen  who  have  addressed  you  and 
still  more  frequently  by  certain  members  of  the  press  of  the  United 
States.  Tlie  origin  of  this  phrase,  I  might  say,  was  in  a  book  pub- 
lished by  Mr.  David  A.  Wells  in  1891,  that  book  being  an  assemblage 
of  articles  that  had  appeared  in  the  New  York  World  in  1880. 

The  substance  of  this  condenmation  of  our  laws  can  be  found 
beginning  on  page  73  of  this  publication.  After  devoting  72  pages  to 
historical  research,  Mr.  Wells  says: 

Such,  then,  is  a  brief  history  of  the  inception  and  growth  of  our  present  navigation 
laws.  Conceived  in  sin  and  brought  forth  in  iniquity,  they  seemed  to  have  entailed 
a  curse  (not  yet  fully  worked  out,  but  in  the  process  of  completion),  general  for  the 
whole  country,  but  more  especially  on  that  section  whose  fathers  sold  their  honor  to 
accomplish  the  result,  and  who  thereby  merited  execration  for  having  entailed,  for 
18  long  years,  the  horrors  of  the  African  slave-trade.  And  when  one  journeys  through 
New  England,  and  sees  how  thick  are  the  graves  of  her  sons,  slain  in  a  war  which 
slavery  originated,  the  question  might  suggest  itself:  Would  these  graves  exist  had 
the  ancestors  of  those  who  fill  them  not  consented  to  strengthen  and  perpetuate 
domestic  slavery  as  a  consideration  for  the  privilege  of  doing  another  wrong;  namely, 
that  of  restricting  their  fellow-citizens  from  freely  exchanging  the  products  of  their 
labor? 

Mr.  Hardy.  Wliat  is  the  date  of  that  book  ? 

Mr.  Chamberlain.  It  was  published  in  1891,  being  a  resume  of 
articles  published  in  1881. 

Mr.  Wells  followed  that  with  specific  criticisms  of  14  statutes. 
I  recently  wrote  to  Senator  Fletcher  on  the  subject.  Part  of  this  , 
letter  is  not  immediately  pertinent  to  your  inquiry,  but  it  is  not  very 
long,  and  with  your  permission  I  will  read  it.  If  you  think  it  desirable 
I  will  leave  this  book  here  and  have  inserted  in  the  record  the  7  or  8 
pages  of  Mr.  Wells's  summary,  to  which  the  letter  refers. 

The  Chairman.  If  there  is  no  objection,  that  will  be  done. 


180      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

(The  excerpt  referred  to  is  as  follows:) 

Chapter  V. 

THE   PROVISIONS   OF   OUR   NAVIGATION   LAWS. 

Having  traced  the  inception  and  growth  of  the  navigation  laws  of  the  United  States, 
let  us  next  inquire  into  their  provisions.  They  may  be  in  the  main  stated  and  illus- 
trated as  follows: 

1.  No  American  citizen  is  allowed  to  import  a  foreign-built  vessel,  in  the  sense  of 
purchasing,  acquiring  a  registry  or  title  to,  or  of  using  her  as  Ms  own  i^roperty;  the 
only  other  absolute  prohibitions  of  imports,  on  the  part  of  the  United  States,  being  in 
respect  to  counterfeit  money  and  obscene  publications  or  objects.  (Rev.  Stats., 
sec.  4132.) 

I  urthermore,  while  we  are  the  only  people  in  the  world  who  are  forbidden  to  pur- 
chase foreign-built  vessels,  we  freely  permit  all  the  world  to  enter  our  ports  with  ves- 
sels purchased  in  any  market.  Frecluded.  therefore,  by  the  first  provisions  of  our 
navigation  laws,  from  engaging  on  equal  terms  in  the  carrying  trade  with  foreigners; 
we  wonder  and  complain  that  the  carrjdng  trade  of  even  our  own  products  has  passed 
from  our  control. 

2.  An  American  vessel  ceased  to  be  such  if  owned  in  the  smallest  degree  by  any  per- 
son naturalized  in  the  United  States  who  may,  after  acquiring  such  ownership,  reside 
"for  more  than  one  year  in  the  country  in  which  he  originated,  or  more  than  two  years 
In  any  foreign  country,  unless  such  person  be  a  consul  or  other  public  agent  of  the 
United  States."     (U.  S.  Rev.  Stats.,  sec.  41.34.) 

3.  If  a  native-born  American  citizen,  for  health,  pleasure,  or  any  other  purpose, 
except  as  a  consul  of  the  United  States  or  as  a  partner  or  agent  in  an  exclusively  Amer- 
ican mercantile  house,  decides  to  reside  ("usually")  in  some  foreign  country,  any 
American  vessel  of  which  he  may  be,  in  all  or  any  part,  owner,  at  once  loses  its  register 
and  ceases  to  be  entitled  to  the  protection  of  the  flag  of  the  United  States,  even  though 
the  vessel  may  have  been  of  American  construction,  and  have  regularly  paid  taxes  in 
the  United  States,  and  the  owner  himself  has  no  thought  of  finally  relinquishing  his 
American  citizenship.     (U.  S.  Rev.  Stats.,  sec.  4133.) 

To  illustrate  this  provision  of  our  na\dgation  laws,  let  us  suppose  Capt.  John  Smith, 
not  a  naturalized  citizen,  but  a  native  American,  is  an  owner,  in  all  or  part,  of  an 
American  vessel.  He  becomes  afflicted  with  a  disease  of  the  lungs,  and,  for  his  health, 
goes  to  live  in  the  south  of  f'rance,  on  account  of  the  balmy  atmosphere  that  prevails 
there.  The  moment  that  Capt.  John  thus,  under  the  law,  begins  to  "usually  reside" 
in  a  foreign  country,  his  vessel  is  liable  to  lose  its  register  and  the  protection  of  the  flag 
of  his  country. 

4.  Every  citizen  of  the  United  States  obtaining  a  register  for  an  American  vessel 
must  make  oath  "that  there  is  no  subject  or  citizen  of  any  foreign  power  or  state 
directly  or  indirectly,  by  way  of  trust  or  confidence,  or  otherwise,  interested  in  such 
vessel  or  in  the  profits  thereof."     (U.  S.  Rev.  Stats.,  sec.  4142.) 

We  invite  foreign  capital  to  come  to  us,  and  help  build  our  railroads,  work  our 
mines,  insure  our  property,  and  even  buy  and  carry  our  Government  bonds  as  invest- 
ments; but  if  a  single  dollar  of  such  capital  is  used  to  build  an  American  ship,  and 
thereby  represents  an  ownership  to  any  extent  of  the  value  received,  we  declare 
the  ship  to  be  thereby  so  tainted  as  to  be  unworthy  of  the  benefit  of  American  laws. 

5.  A  foreigner  may  superintend  an  American  factory,  run  an  American  railroad,  be 
president  of  an  American  college,  or  hold  a  commission  in  the  American  Army,  but 
he  can  not  command  or  be  an  officer  of  a  registered  American  vessel.  (U.  S.  Rev. 
Stats.,  sec.  4131.) 

Notwithstanding  this  express  provision  of  law,  it  is  an  indisputable  fact  that  there 
is  hardly  an  American  vessel  engaged  in  foreign  trade  that  haa  not  one  or  more  for- 
eigners employed  as  officers;  and  instances,  it  is  said,  are  not  rare,  of  American  vessels 
which  have  no  citizens  of  the  United  States  on  board  except  the  master. 

If  Capt.  John  Smith,  being  a  foreigner,  took  command  of  an  American  vessel,  and 
falsely  swore  that  he  was  an  American  citizen,  he  would  "forfeit  and  pay  the  sum  of 
$1,000."  If  one  of  the  owners  should  take  such  oath,  Capt.  Smith  not  being  in 
the  district,  the  vessel  would  be  subject  to  forfeiture;  but  no  such  case  of  forfeiture 
has  ever  occurred.  She  would,  however,  not  be  subject  to  forfeiture  "if  Capt. 
Smith  had  been  appointed  the  lowest  officer  on  the  vessel."  To  be  sure,  the  law 
requires  that  "officers  of  vessels  of  the  United  States  shall  in  all  cases  be  citizens  of 
the  United  States";  but  there  is  no  penalty  whatever  imposed  on  the  vessel  if  they 
are  not. 

Many  American  citizens,  on  the  other  hand,  undoubtedly  own  vessels  under  foreign 
flags.     Some  of  them  transferred   their  vessels  to  English  colors  during  the  war  to 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      181 

escape  cajjtiire  by  Confederate  war  vessels,  but  there  are  many  who  adopt  this  expedi- 
ent to  obtain  cheap  ships.  They  engage  a  trustworthy  English  clerk,  for  instance, 
and  buy  the  vessel  in  his  name,  holding  a  m.ortgage  for  her  full  value  as  security. 

Some  years  ago  the  American  consul-general  to  China — Mr.  Seward — in  a  report  to 
the  State  Department  stated  as  within  his  personal  experience  from  1862  to  1875 
"that  the  rigid  enforcement  of  this  lavv^  would  often  have  forced  the  owners  or  agents 
of  those  vessels  engaged  in  that  part  of  the  world  to  lay  up  their  ships  or  transfer  them 
to  other  flags. " 

C^.  No  foreign-built  vessel  or  vessel  in  any  part  owned  by  a  subject  of  a  foreign  power 
can  enter  a  port  of  the  I'nited  States  and  then  go  to  another  domestic  port  with  any 
new  cargo  or  with  any  part  of  her  original  cargo  that  has  been  once  unladen  without 
having  previously  voyaged  to  and  touched  at  some  other  port  of  some  foreign  country 
under  penalty  of  confiscation.  By  a  comparatively  recent  construction  of  the  law 
all  direct  traffic  by  sea  between  the  Atlantic  and  Pacific  ports  of  the  United  States 
via  Cape  Horn  or  the  Cape  of  Good  Hope,  or  across  the  Isthmus  of  Panama,  is  held 
to  be  of  the  nature  of  a  coasting  trade  or  vovage  in  which  foreign  vessels  can  not 
participate.     (U.  S.  Rev.  Stats. .W.  4347.) 

In  view  of  the  fact  that  there  has  been  no  attempt  in  recent  times  on  the  pn.rt  of 
the  English,  French,  or  Dutr^h  Governments  to  interfere  with  the  transport  of  mer- 
chandise by  American  ships  by  the  common  highway  of  the  ocean  between  the 
home  ports  of  these  countries  and  their  colonial  possessions  this  construction  of  law, 
not  contemplated  at  the  period  of  its  enactm.ent.  was  regardel  by  Europe  as  a  bit  of 
very  sharp  and  mean  practice  on  the  part  of  the  L'nited  States,  as  it  undoubtedly  was. 

7.  An  American  vessel  once  sold  or  transferred  to  a  foreigner  can  never  be  bought 
back  again  and  become  American  property,  not  even  if  the  transfer  has  been  the 
result  of  capture  and  condemnation  by  a  foreign  power  in  time  of  war.  (U.  S.  Rev. 
Stats.,  sec.  4165.) 

8.  A  vessel  under  30  tons  can  not  be  used  to  import  anything  at  any  seaboard  port. 
(U.  S.  Rev.  Stats.,  sec.  3095.) 

9.  Goods,  wai'es,  and  merchandise,  the  produce  of  countries  east  of  the  Cape  of 
Good  Hope,  when  imported  from  countries  west  of  the  Cape  of  Good  Hope,  are  subject 
to  a  duty  of  10  per  cent  in  addition  to  the  duties  imposed  on  such  articles  when  im- 
ported directly.  This  law  is  interpreted  so  stringently  that  old  second-hand  gunny 
bags,  nearly  worn  out,  do  not  lose  their  distinctiveness  to  an  extent  sufficient  to 
exempt  them  from  additional  duties  if  they  finally  come  to  the  United  States,  in  the 
process  of  using,  from  a  place  west  of  the  Cape  of  Good  Hope.  A  few  years  ago  a 
vessel  from  China  destined  to  ^Montreal,  Canada,  was  sent,  on  arriving,  to  New  York 
without  breaking  bulk.  It  was  held  that  the  voyage  ceased  in  Canada,  and  that  the 
new  voyage  to  New  York  subjected  the  cargo  to  an  additional  10  per  cent.  By  the 
original  navigation  laws  (act  of  1790)  it  was  provided  that  the  tariff  on  all  articles 
imported  in  American  vessels  shall  be  less  than  if  imported  in  foreign  vessels.  On 
"Hyson"  tea  the  duty  in  American  vessels  was  20  cents  per  pound,  in  foreign  vessels 
45  cents.  The  present  discriminating  duties  on  products  of  countries  east  of  the 
Cape  of  Good  Hope,  imported  indirectlv,  are  a  remnant  and  legacv  of  these  old  restric- 
tions.    (U.  S.  Rev.  Stats.,  sec.  2501.) 

10.  If  a  vessel  of  the  United  States  becomes  damaged  on  a  foreign  voyage,  and  is 
repaired  in  a  foreign  port,  her  owner  or  master  must  make  entry  of  such  repairs  at  a 
customhouse  of  the  United  States,  as  an  import,  and  pay  a  duty  on  the  same  equal 
to  one-half  the  cost  of  the  foreign  work  or  material,  or  50  per  cent  ad  valorem;  and  this 
law  extends  so  far  as  to  include  boats  that  may  be  obtained  at  sea  from  a  passing 
foreign  vessel  in  order  to  assure  the  safetv  of  the  crew  or  passengers  of  the  American 
vessel.     (U.  S_.  Rev.  Stats.,  sec.  3114.) 

To  the  credit  of  former  days  it  should  be  said  that  this  provision  of  law  was  not  a 
part  of  the  original  navigation  laws  of  the  United  States,  but  was  incorporated  into 
them  by  special  statute  passed  July  18,  1866.  entitled  "An  act  to  prevent  smuggling, 
and  for  other  purposes."  Under  the  Treasury  regulations  it  is  held  that,  although  no 
part  of  the  proper  equipment  of  a  vessel  arriving  in  the  United  States  from  a  foreign 
country  is  liable  to  duty,  such  equipment,  if  considered  by  the  United  States  revenue 
officers  as  redundant,  is  liable  to  the  payment  of  duty  as  a  foreign  import,  although 
there  may  be  no  intent  of  landing,  disposing  of,  or  using  such  extra  equipment,  except 
in  connection  with  the  vessel.  Thus,  for  example,  when  two  sets  of  chains  were  found 
on  board  of  a  foreign  vessel,  and  one  set  was  held  to  be  all  that  was  necessary,  the  other 
set  was  made  chargeable  with  duty.  In  another  case,  wdiere  anchors  and  chains 
were  bonded  on  importation,  and  at  the  same  time  entered  for  exportation,  and  placed 
on  board  the  vessel  as  a  part  of  her  equipment,  it  was  held  by  the  Treasury  that  the 
legal  duties  shoiild  be  cidl^'cted  on  t\\(^  samf>. 

11.  Foreign  vessels  losing  rudder,  sternpost,  or  breaking  shaft,  and  arriving  in  the 
United  States  in  distress,  can  not  import  others  to  replace  these  articles  here  without 


182      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

payment  of  the  duty  on  the  same.  In  one  case  of  actual  occurrence,  a  foreign  line  of 
steamers  left — during  a  trip  interval — thtir  mooring  chains,  of  foreign  manufacture, 
on  an  American  wharf.  Some  ov(r- vigilant  revenue  officer  reported  the  occurrence 
to  the  Treasury  Department,  and  it  was  decided  that,  as  the  chains  were  landed,  the 
legal  duties  should  be  collected  from  them  as  an  importation.  A  foreign  vessel  can  not 
even  land  copper  sheathing  for  the  sole  purpose  of  being  recoppored  by  American 
workmen,  without  paying  duties  on  the  old  copper  stripped  off,  and  the  new  copper 
put  on,  as  S(  parate  and  distinct  imports.  During  the  year  1871  the  owner  of  a  Dutch 
vessel  entf  red  at  Boston,  ignorant  of  the  peculiar  features  of  the  tariff  of  the  United 
States  in  respect  to  the  ocean-carrying  trade,  put  on  board  at  the  foreign  port  of  clear- 
ance a  quantity  of  sheet  copper  sufficient  to  sheath  the  bottom  of  his  v(  ss"l,  it  being 
intended  to  have  the  w'ork  done  in  the  United  States  upon  her  arrival  in  order  to  save 
time  and  put  the  vessel  in  good  order  for  her  return  voyage.  The  agent,  ad\T.sed  of 
this  arrangement,  referred  the  matter  to  the  officials  of  the  Boston  customhouse  for 
instructions,  only  to  learn  that  the  new  shf^athing  metal  could  not  be  used  in  the 
United  States  as  proposed  without  paying  a  duty  of  45  per  cent,  while  the  copper  taken 
off  the  ship's  bottom  must  also  pay  a  duty  of  4  cents  per  pound  as  an  importation  of 
old  copper.  The  agent  signified  his  willingness  to  pay  the  latter  and  sell  the  old 
metal  for  what  it  would  bring,  but  requested  to  be  allowed  to  land  the  new  copper 
in  bond  for  reexportation,  as  it  would  be  carried  out  l)y  the  same  vessel  that  brought 
it  in.  He  was  informed,  however,  that  the  bond  for  exportation  required  for  its  can- 
cellation a  certificate  of  the  landing  of  the  bonded  goods  in  the  foreign  port  for  which 
its  export  was  declared  which  could  not  be  obtained  if  it  was  entered  at  the  port  of 
destination  upon,  and  not  in,  the  ship  carrying  it.  The  consequence  was,  that  when 
the  ship  discharged  her  cargo  at  Boston  she  sailed  for  Halifax,  N.  S.,  carrjdng  her 
sheathing  copper  with  her,  and  after  having  been  there  coppered  by  the  shipwrights 
of  the  British  Provinces  returned  in  ballast  to  Boston  for  her  return  cargo — all  this 
costly  proceeding  being  cheaper  than  the  payment  of  45  per  cent  duty  for  the  pri^dlege 
of  employing  American  workmen  to  take  off  the  old  sheathing  and  put  on  the  new. 

12.  If  a  citizen  of  the  United  States  buys  a  vessel  of  foreign  build  which  has  been 
wrecked  on  our  coast,  takes  her  into  port,  repairs,  and  renders  her  again  serviceable 
and  seaworthy,  he  can  not  make  her  American  property  unless  it  is  proved  to  the  sat- 
isfaction of  the  Treasurj^  Department  that  the  repairs  put  upon  su?h  vessel  are  equal 
to  three-fourths  of  the  cost  of  the  vessel  when  so  repaired.  (U.  S.  Rev.  Stats.,  sec. 
4136.) 

The  following  is  an  illustration  of  the  working  of  this  statute:  In  1871  a  citizen  of 
Baltimore  purchased  a  foreign-built  vessel  Avrecked  on  the  American  coast  and 
abandoned  to  the  underwriters  and,  by  spending  a  large  sum  in  reconstruction,  ren- 
dered her  again  seaworthy.  He  then,  being  desirous  of  employing  his  capital  embod- 
ied in  this  instrumentality  of  trade  in  the  most  profitable  manner  and  assuming 
that  the  reconstructed  wreck  was  his  lawful  property,  arranged  for  an  outward  e-irgo 
under  the  flag  of  the  United  States.  But  when  the  vessel  was  ready  to  sail  re-istry 
was  refused  by  the  customs  officials  on  the  ground  that  the  vessel  was  of  foreign  con- 
struction, the  sum  of  the  repairs  put  on  the  wreck  being  a  little  less  than  three- 
fourths  of  the  original  cost  of  the  vessel;  for,  in  other  words,  the  substance  of  this 
decision,  which  was  correct  in  law,  was  that  while  the  citizen  under  the  laws  of  the 
United  States  might  lawfully  buy  and  acquire  title  to  a  wreok  and  use  it  for  any 
purpose  other  than  navigation — as,  for  example,  as  a  dock,  a  house,  or  a  coal  bin — 
he  could  not  acquire  title  to  it  and  make  it  American  property  lawful  to  use  as  a 
vessel  even  after  he  had  paid  duties  on  its  old  materials  as  imports  unless  he  could 
show  that  he  had  expended  upon  the  abandoned  construction  for  the  purpose  of 
restoring  it  to  its  original  quality  for  service  a  sum  nearly  equivalent  to  the  cost  of 
building  an  entirely  new  vessel.  The  owner  by  law,  most  mercifully,  in  such  cases 
la  not,  however,  deprived  of  the  pri\dlege  of  selling  the  property  to  a  foreigner. 

13.  Every  vessel  belonging  to  the  mercantile  marine  of  the  United  States  engaged 
in  foreign  trade — vessels  employed  in  the  fisheries  excepted — must  pay  annually  into 
the  Federal  Treasury  a  tonnage  tax  at  the  rate  of  30  cents  per  ton.  (U.  S.  Rev.  Stats., 
sec.  4219.) 

At  the  commencement  of  the  war  there  were  no  tonnage  taxes;  but  by  the  act  of 
July,  1862,  a  tonnage  tax  of  10  cents  per  ton  was  imposed,  which  was  afterwards  in- 
creased to  30  cents,  the  present  rate.  Although  there  was  nothing  specific  in  the  recent 
enactments  to  warrant  it,  and  American  shipping  engaged  in  foreign  trade  was  in 
such  a  condition  as  to  demand  the  kindliest  consideration  from  the  Government,  the 
Treasury  officials,  interpreting  the  statute  accoreling  to  the  invariable  rule  for  the 
benefit  of  the  Government  and  to  the  disadvantage  of  the  citizen,  were  in  the  habit, 
up  to  1867,  of  collecting  this  tax  at  every  entry  of  a  vessel  from  a  foreign  port;  but 
by  the  act  of  March,  1867,  tonnage  taxes  can  now  be  levied  but  once  a  year.     On  a 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      183 

ship  of  1,000  tons  the  present  tax,  amounting  to  $300  per  annum,  represents  the 
profits  or  interest — reckoned  at  6  per  cent — on  an  invested  capital  of  $5,000, 
and  on  a  ship  of  2,000  tons  of  $10,000.  Mr.  F.  A.  Pike,  of  Maine,  in  a  speech  in  the 
United  States  House  of  Representatives,  May,  1868,  stated  that  this  tax  was  equiva- 
lent, in  many  instances,  to  3  per  cent  on  the  market  valuation  of  an  inferior  class  of 
American  vessels,  employed  only  in  the  summer  months,  and  largely  owned  by  his 
constituents. 

Vessels  belonging  to  foreign  States,  between  whom  and  the  United  States  ordinary 
commercial  relations  are  established,  pay  the  same  tonnage  taxes  as  American  vessels. 
But  if  any  person  not  a  citizen  of  the  United  Slates  becomes  an  owner  to  the  extent 
of  the  merest  fraction  in  a  ship  of  American  build,  then  such  ship  is  not  entitled  to 
the  privileges  accorded  to  ships  owned  wholly  by  foreigners,  but  must  pay  on  entering 
a  port  of  the  United  States  a  tonnage  tax  of  60  cents,  or  double  rate,  and  such  vessel 
at  once  ceases  to  be  entitled  to  registry  or  enrollment  as  a  vessel  of  the  United  States. 
Here,  then,  we  have  piled  up,  as  it  were,  on  the  top  of  all  other  provisions,  another 
direct,  odious,  and  stupid  discrimination  against  the  employment  of  foreign  capital, 
provided  it  should  so  incline,  for  the  developing  of  the  American  shipping  interest 
and  the  employment  of  labor  even  in  our  own  dockyards  and  harl^ors.  Supposing  a 
similar  law  to  be  proposed,  discriminating  in  like  manner  against  the  investment  of 
foreign  capital  in  American  railroads,  mines,  factories,  and  mercantile  enterprises 
generally,  does  any  one  doubt  that  the  proponent  would  be  at  once  hooted  into  con- 
tempt? '  And  yet  the  hypothetical  law  is  no  more  absurd  than  the  law  that  actually 
exists  upon  the  statute  book. 

Practically  the  law  is  a  dead  letter.  In  the  case  of  ordinar)^  vessels  rigid  inquiry 
as  to  ownership  is  rarely  or  never  instituted,  and  the  oath  required  is  regarded  and 
taken  as  a  mere  form.  In  case  of  incorporated  American  ocean-navigation  com- 
panies (if  there  are  any  such)  the  president  of  the  company  has  only  to  swear  to  the 
ownership  of  any  vessel  by  the  company,  and  the  Federal  officials  will  not  care  if  the 
ownership  of  one  or  a  majority  of  the  shares  of  the  corporation  vest  in  citizens  of  for- 
eign nationalities,  the  provision  of  the  statute,  as  with  a  view  of  making  the  law  of 
noneffect  being  that,  in  this  swearing  to  ownership  by  a  company,  it  shall  not  be 
necessary  to  designate  the  names  of  the  persons  comprising  such  company.  The 
result  of  this  is  that  any  foreigner  can  purchase  shares  in  any  American  navigation 
company,  and  not  a  vessc'l  of  their  fleet  will  thereby  lose  American  registration  and 
American  protection;  but  if  a  foreigner  became  the  owner  of  the  small*  st  fraction  of 
a  100-ton  steamboat,  plWug  between  Key  West  and  Habana,  the  registration  of  such 
vessel  would  be  immediately  vitiated. 

If  a  Sunday  school  or  a  picnic  party,  out  on  an  excursion,  happen  to  come  into  an 
American  port  on  a  foreign  (Canadian)  vessel  (as  was  recently  the  cas<^'  on  one  of  our 
upper  lakes)  for  mere  temporary  and  pleasure  purposes,  the  vessel  is  lialsle  to  a  ton- 
nage tax;  and  a  Ubel  against  the  vessel,  instituted  by  an  overzealous  official  for  its 
payment,  was  decided  by  the  Treasury'  Department  (August,  1876)  to  be  a  proceed 
ing  which  the  Government  must  enforce. 

14.  By  the  act  of  June  6,  1872,  all  materials  necessary  for  the  construction  of  vessels 
built  in  the  United  States  for  the  purpose  of  foreign  trade  may  be  imported  and 
used  free  of  duty.  But  no  American  vessel  receiving  the  benefit  of  this  act  can 
engage  in  the  American  coasting  trade  for  more  than  two  months  in  any  one  year 
without  payment  of  the  dutif  s  which  have  been  remitted. 

15.  The  several  ports  of  the  United  States  are  classified  by  districts;  and  in  each 
district  one  port  is  designated  by  statute  as  a  "port  of  entry."  and  others  as  "ports  of 
delivery."  All  vessels,  on  arri\'ing  from  a  foreign  country  in  any  district,  must  first 
report  at  the  established  port  of  entry,  and  there  conform  to  the  details  of  the  cus- 
tomhouse service;  after  which  the  vessel,  if  American,  can  proceed,  if  desired,  to 
any  port  of  delivery  in  the  district  for  the  purpose  of  unloading.  But  if  the  vessel  be 
foreign,  it  can  only  discharge  at  the  port  of  entry,  even  though  its  cargo  be  imported 
exclusively  for  the  use  of  American  citizens  at  a  port  of  delivery.  A  ship,  therefore, 
may  pass  almost  within  hail  of  the  point  of  destination  of  its  cargo,  and  yet  be  com- 
pelled to  unload  many  miles  away,  thus  necessitating  reshipping  and  repeated  hand- 
ling, at  much  additional  expense.  Thus,  the  customs  district  of  Boston  and  Charles- 
town  comprises  only  one  port  of  entry — Boston — while  Cambridge,  Medford,  Hing- 
ham,  Cohasset,  etc.,  are  all  ports  of  delivery  only.  If  a  foreign  vessel  arrives  from 
abroad  with  a  cargo  of  hemp  for  Hingham,  instead  of  proceeding  direct  to  the  wharf 
in  that  port,  she  must  first  sail  right  by,  enter  herself  and  cargo  in  Boston,  and  then 
unlade  at  a  Boston  wharf,  when  the  goods  may  be  reshipped  by  packet  or  railroad 
for  Hingham.  Again,  if  a  foreign  vessel  is  loaded  'W'ith  a  cargo  for  Saybrook,  a  port  of 
delivery  at  the  mouth  of  the  Connecticut  River,  she  must  pass  directly  by  her  desti- 
nation, and  proceed  40  miles  up  the  river — often  with  difficulty  navigable — to  Middle- 
town,  the  port  of  entry  for  the  district,  and  there  discharge  and  pro-vnde  for  the  recon- 


184      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


veyance  of  her  cargo  by  some  other  method  of  transportation  to  the  place  where  it  is 
wanted. 

The  following  will  also  illustrate  in  some  degree  the  manner  in  which  the  naviga- 
tion laws  of  the  United  States  have  been  executed: 

All  vessels  of  the  United  States  engaged  in  the  coasting  trade  are  required  to  be  en- 
rolled and  licensed:  and  vessels  engaging  in  trade  and  transportation  without  pre- 
viously procuring  such  enrollment  or  license  are  liable  to  seizure  and  heavy  penalties. 
On  the  east  bank  of  the  Hudson,  in  the  City  of  Troy,  State  of  New  York,  there  are 
extensive  ironworks,  the  coal  and  ore  supplies  for  which  are  largely  transported  over 
the  Erie  and  (hamplain  Canals.  Boats  coming  down  these  canals  loaded  with  such 
supplies  are  locked  into  the  Hudson  at  West  Troy,  a  point  on  the  west  hank  nearly 
opposite  to  the  furnaces:  then,  after  crossing  the  river,  delivering  their  freight,  and 
recrossing,  reenter  the  canal,  and  return  on  their  route  for  another  similar  cargo.  Some 
years  ago  the  officials  of  the  United  States  Treasury  Department  decided  that  under 
our  navigation  laws  this  temporary  entry  of  boats  from  the  canals  into  the  Hudson  for 
the  purpose  of  delivering  cargo,  and  their  subsequent  return  into  the  canal,  consti- 
tuted a  coasting  voyage,  for  the  engaging  in  which  it  was  obligatory  on  the  owners  of 
the  canal  boats  to  have  pre\'iously  taken  out  a  license.  Of  course  the  owners,  not 
anticipating  any  such  official  interpretation  of  the  law,  had  not  provided  themselves 
with  licenses:  but  this  nevertheless  did  not  prevent  a  large  number  of  boats  from  being 
seized  and  libeled  for  violation  of  the  navigation  laws,  from  which  they  were  only 
released  after  expensive  and  annoying  litigation  and  the  payment  of  considerable 
sums  in  the  way  of  costs  or  penalties. 

]yir.  Chamberlain.  My  letter  to  Senator  Fletcher  was  as  follows 
[reading :] 

Washington,  D.  C,  October  14,  1915. 
Hon.  Duncan  U.  Fletcher, 

United  States  Senate,  Washington,  D.  C. 

Dear  Senator  Fletcher:  At  your  recent  call  at  this  office  to  inquire  about  changes 
in  the  "antiquated  navigation  laws,"  I  told  you  that  many  of  those  who  discuss  ques- 
tions relating  to  the  American  mercantile  marine  seem  to  overlook  the  many  desirable 
changes  in  the  old  navigation  laws,  effected  by  Congress  between  the  years  1895  and 
1914. 

The  Democratic  national  platform  of  1880  favored  "free  ships  and  a  living  chance 
for  American  commerce  on  the  seas  and  on  the  land."  This  plank,  as  I  recall  it, 
was  drawn  by  Col.  Henry  Watterson  of  the  Louisville  Courier  Journal,  and  that  paper 
and  the  New  York  World,  then  edited  by  Mr.  W.  H.  Hurlburt,  undertook  an  active  cam- 
paign in  behalf  of  changes  in  the  navigation  laws  and  more  particularly  the  old  registry 
act,  which  prohibited  the  American  flag  and  register  to  vessels,  except  those  built  in 
the  United  States.  This  movement  had  the  support  of  the  leading  Democrats  of  that 
time,  like  Senator  Beck  of  Kentucky,  Senators  Vest  and  Cockrell  of  Missouri,  Lamar 
of  Mississippi,  and  the  strong  support  of  President  Cleveland  during  his  second  admin- 
istration. The  "free  ship  "  plank  of  1880  meant  the  admission  of  foreign-built  ships  to 
American  registry,  which  was  not  fully  carried  out  until  the  act  of  August  18,  1914. 
The  ship  registry  bill  of  1914  was  in  effect  the  tardy  fulfillment  of  a  party  pledge  and 
was  an  emergency  war  measure  only  in  the  sense  that  war  conditions  made  plain  to 
every  one  in  Congress  the  desirability  of  its  enactment. 

To  promote  the  reform  of  our  navigation  laws  favored  in  the  national  platform  of 
1880,  Mr.  David  A.  Wells,  cooperating  with  Mr.  Hurlburt  of  the  New  York  World  and 
Col.  Watterson  of  the  Louisville  Courier  Journal,  prepared  a  series  of  articles  criticizing 
the  navigation  laws  of  the  early  years  of  the  Republic.  These  articles  appear  in  the 
World  in  1881,  and  were  afterwards  assembled  in  a  little  book  called  "Our  merchant 
marine.  How  it  rose,  increased,  became  great,  declined,  and  decayed.  With  an 
inquiry  into  the  conditions  essential  to  its  resuscitation  and  future  prosperity,"  pub- 
lished in  the  series  of  Questions  of  the  Day,  by  Putman's  Sons,  New  York,  in  1890. 
This  book  is  still  the  standard  textbook  of  those  who  condemn  the  antiquated  naviga- 
tions laws,  although  practically  every  law  criticized  in  the  publication  has  been 
repealed  or  greatly  changed  since  1894. 

Mr.  Wells  subjected  15  statutes  to  destructive,  and  in  most  cases,  deserved,  crit- 
icism, and  I  wisli  to  summarize  for  you  now  what  Congress  has  done  with  these  several 
laws. 

1.  Section  4134,  Revised  Statutes,  provided  that  an  American  vessel  ceased  to  be 
such  if  owned  in  part  by  a  person  naturalized  in  the  United  States  who,  after  acquiring 
such  ownership,  resided  for  two  years  in  a  foreisjn  countrv.  This  section  was  repealed 
by  section  10  of  the  act  of  March  3,  1897. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      185 

2.  Section  4133,  Revised  Statutes,  provided  that  if  a  native-])orn  American  citizen 
owning  any  share  in  an  American  vessel  took  up  his  residence  abroad,  the  vessel 
ceased  to  be  an  American  vessel.  This  section  was  repealed  by  section  16  of  the  act 
of  March  3,  1897. 

3.  Section  4142  of  the  Revised  Statutes  provided  that  every  citizen  of  the  United 
States  in  registering  an  American  vessel  must  make  oath  ''that  there  is  no  subject  or 
citizen  of  any  foi'eigu  power  or  state  directly  or  indirectly,  by  way  of  trust  or  confidence, 
or  otherwise,  interested  in  such  vessel  or  in  the  profits  thereof."  Under  a  ruling  of 
Hugh  McCulloch,  Secretary  of  the  Treasury,  January  30,  1869,  this  oath  is  not  required 
in  the  case  of  vessels  owned  by  corporations.  Foreign  capital  to  an  indefinite  extent 
may  be  invested  in  corporations  owning  American  ships,  and,  as  you  are  aware, 
practically  all  ocean  steamers  are  owned  by  corporations  under  modern  business 
conditions.  Secretary  McCulloch's  ruling  was  reaffirmed  by  Attorney  General 
Brewster  and  again  by  Attorney  General  Wickersham,  and  the  criticism  of  section 
4142,  under  current  conditions  of  ownership,  has  very  narrow  application. 

That  was  true  at  that  time,  and  it  is  true  now,  I  must  say  in  justice 
to  a  man  who  really  did  a  great  public  service. 

4.  Section  4165  of  the  Revised  Statutes  pro\'ided  that  an  American  vessel  once 
sold  to  a  foreigner  can  not  again  receive  American  registry.  This  section  was  mate- 
rially modified  by  section  10  of  the  act  of  March  3,  1897,  and  was  entirely  repealed 
by  the  act  of  March  4,  1915  (to  provide  for  provisional  certificate  of  registry  of  vessels 
abroad). 

5.  The  act  of  March  6,  1872,  provided  that  material  necessary  for  the  construction 
of  vessels  built  in  the  United  States  for  foreign  trade  may  be  imported  free  of  duty, 
but  American  vessels  receiving  the  benefit  of  this  act  can  engage  in  the  coasting 
trade  only  two  months  in  the  year.  The  Payne-Aldrich  tariff  extended  this  coasting 
privilege  to  six  months  in  the  year  and  the  Panama  Canal  act  of  1912  and  the  Under- 
wood tariff  provided  for  the  admission,  free  of  duty,  of  materials  for  the  construction 
of  ships,  regardless  of  whether  the  ships  be  engaged  in  the  foreign  or  in  the  coasting 
trade. 

6.  Section  4219,  Revised  Statutes,  required  every  vessel  to  pay  tonnage  tax  at  the 
rate  of  30  cents  p?r  ton.  By  the  acts  of  1884  and  1886  the  rate  was  reduced  to  6  cents 
a  ton  on  vessels  from  transoceanic  ports  and  3  cents  a  ton  on  vessels  from  near-by 
ports,  payable  not  to  exceed  five  times  a  year,  and  this  lower  rate  of  3  cents  a  ton  was 
reduced  to  2  cents  by  the  Payne  Tariff  Act.  In  fact,  tonnage  dues  levied  in  the 
United  States  are  now  materially  less  than  the  corresponding  charges  levied  in  the 
ports  of  all  European  nations.  They  amount  nowadays  to  an  annual  charge  of  about 
$1,200,000  on  a  seaborne  commerce  of  the  United  States  valued  last  year  at  $3,957,- 
000,000. 

That  was  written  in  October,  and  I  think  the  revised  figures  for 
the  foreign  trade  make  it  about  S4, 000, 000,000. 

7.  Section  3114  of  the  Revised  Statutes  provides  a  duty  of  50  per  cent  ad  valorem 
on  repairs  to  American  ships  abroad.  Mr.  Wells  did  not  state  correctly  the  pro- 
visions of  section  3114,  which  applies  only  to  repairs  of  Great  Lakes  vessels  in  Canadian 
ports. 

That  never  had  any  appUcation  to  repairs  on  the  seaboard  at  all, 
but  Mr.  Well's  oversight  was  natural,  because  in  reading  the  text  of 
section  3114  anybody  would  have  drawn  the  same  conclusion  that 
he  did. 

There  is  no  duty  on  the  repairs  to  American  sea-going  vessels  effected  in  foreign 
ports. 

8.  Section  3095  of  the  Revised  Statutes  provides  that  a  vessel  under  30  tons  can 
not  be  used  to  import  anything  at  a  seaboard  port.  This  statement  is  only  partially 
correct  as  it  does  not  apply  to  ports  adjacent  to  the  Dominion  of  Canada  on  the  north, 
or  to  Mexico  on  the  south,  and  very  small  vessels  under  30  tons,  of  course,  are  not 
suitable  for  foreign  voyages,  except  between  our  border  ports  and  the  adjacent  ports 
of  Canada  and  Mexico  by  sea. 

In  other  words,  I  did  not  think  that  criticism  at  that  time  was 
a  vahd  one.     The  law  remains  unchanged. 

9.  The  system  of  ports  of  entry,  subparts,  and  ports  of  delivery,  established  by 
various  sections  of  the  Revised  Statutes,  was  criticized  by  Mr.  Wells  with  good  rea- 


186      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

son.  This  system  was  completely  changed  by  the  reorganization  of  customs  dis- 
tricts, carried  through  by  Representative  Fitzgerald  and  approved  by  thePresident 
Taft  at  the  end  of  his  administration. 

10.  Section  4131,  Revised  Statutes.  An  alien  may  not  act  as  officer  of  a  registered 
American  vessel.  This  was  partially  repealed  by  section  2  of  the  ship  registry  act 
of  August  18,  1914,  and  by  the  President's  order  of  September  4,  issued  pursuant  to 
that  section.  Congress  at  the  coming  session  will  doubtless  determine  a  permanent 
policy  on  this  subject. 

11.  Section  4132  prohibits  an  American  citizen  from  registering  a  foreign-built 
vessel .  This  law  was  partially  repealed  by  the  Panama  Canal  act  of  1912,  and  entirel  / 
repealed  by  the  ship  registry  act  or  free  ship  act  of  August  18,  1914. 

The  exemptions,  you  will  recall,  under  the  presidential  order  apply 
in  most  cases  only  for  two  years.  That  period  will  run  out  in  Sep- 
tember, and  I  assume  that  this  committee,  if  it  has  not  now,  will 
have  under  consideration  the  determination  of  a  definite  policy. 
That  will  be  very  desirable,  of  course,  if  the  registry  law  is  to  remain 
to  be  practically  effective. 

12.  Section  4136  of  the  Revised  Statutes  provides  for  American  registry  for  a 
foreign-built  ship,  wrecked  in  the  United  States,  if  repairs  equaling  three-fourths 
of  the  cost  of  the  vessel  are  effected  on  the  wreck  in  American  yards.  So  far  as  ves- 
sels in  the  foreign  trade  are  concerned,  that  section  is  a  dead  letter,  as  the  wreck  can 
be  admitted  to  American  registry  for  foreign  trade  regardless  of  the  amount  of  repairs. 
The  old  law  was  reenacted,  so  far  as  the  coastwise  trade  is  concerned,  by  the  act  of 
February  24,  1915. 

13.  Mr.  Wells  in  his  eleventh  point  deals  with  the  importation  of  equipment,  such 
as  rudders,  shafts,  etc.,  for  foreign  vessels.  It  has  nothing  to  do  with  the  American 
merchant  marine,  although  it  does  relate  to  American  commerce.  Section  17  of  the 
act  of  March  3,  1897,  permitted  the  transfer,  free  of  duty,  of  articles  for  the  legitimate 
equipment  of  vessels  belonging  to  regular  lines  engaged  in  foreign  trade  from  one 
vessel  to  another  vessel  of  the  same  owner. 

You  see,  that  is  a  limited  repeal  of  that  requirement,  but  it  deals 
with  foreign  vessels  only  and  not  with  our  own, 

14.  Section  4347,  Revised  Statutes.  Foreign-built  vessels  can  not  engage  in  the 
coasting  trade  of  the  United  States.  This  is  the  only  feature  of  our  navigation  laws, 
designed  to  protect  American  shipbuilding,  which  remains  on  the  statute  books. 
It  does  not,  of  course,  affect  the  American  merchant  marine  in  the  foreign  trade. 

Mr.  Hardy.  Was  that  one  of  Mr.  Wells's  criticisms  ? 
Mr.  Chamberlain.  Yes,  Judge  Hardy;  it  was. 
Mr.  Hardy.   The  fact  is,  we  limited  our  coastwise  trade  strictly  to 
domestic-built  vessels  ? 

Mr.  Chamberlain.  Yes,  sir.     [Reading:] 

15.  Note.— Mr.  Wells's  criticism  of  section  2501  of  the  Revised  Statutes  (impor- 
tation of  articles  east  of  the  Cape  of  Good  Hope)  requires  no  discussion,  as  the  section 
was  repealed  on  January  18,  1883,  as  noted  in  Mr.  Wells's  book. 

The  campaign  for  the  revision  of  the  navigation  laws,  begun  in  1880,  you  will  see, 
has  been  carried  to  a  successful  conclusion,  of  which  some  of  the  very  recent  volunteers 
to  the  cause  do  not  seem  to  be  aware. 
Sincerelv  yours, 

E.  T.  Chamberlain,  Commissioner. 

That  is  the  argument,  as  I  understand  it,  of  the  greater  part  of  the 
criticism  of  our  so-called  "antiquated  navigation  laws."  From  time 
to  time  Congress  has  taken  these  laws  up  and  revised  them  and,  so 
that  now  the  two  important  remaining  ones  which  Mr.  Wells  criti- 
cized, are  the  reservation  of  coasting  trade  to  Ainerican  vessels— and 
I  do  not  think  there  is  any  very  strong  disposition  to  change  that — 
and  the  restriction  of  the  nationality  of  oflicers  of  our  ships.  That,  of 
course,   is   a  question   of  large  policy.     Some  important  maritmie 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      187 

nations  do  not  have  restrictions  of  that  kind,  but  I  shall  not  take  the 
tune  to  go  into  that. 

Mr.  Greene.  If  I  may  interrupt  you,  in  what  way  did  the  30  cents 
tonnage  tax  hinder  American  vessels  ? 

Mr.  Chamberlain.  It  could  not  have  hindered  them  at  aU;  it  is 
applied  equally  to  American  and  foreign  ships.  As  a  matter  of  fact, 
as  I  have  stated,  the  present  rates  are  very  much  less  than  those  that 
are  charged  anywhere  else  in  the  world,  so  far  as  I  am  aware,  and  I 
have  given  the  matter,  of  course,  some  attention. 

Mr.  Greene.  Does  this  apply  to  foreign  ships  ? 

Mr.  Chamberlain.  Oh,  yes;  absolutely.  It  is  a  matter  of  entire 
equality  under  our  treaties.  The  exceptions  are  those  nations  with 
which  we  do  not  have  treaties.  There  is  a  special  tonnage  tax  on 
them. 

Mr.  Edmonds.  Mr.  Chamberlain,  will  you  teU  us  now  what  nations 
open  their  coastwise  trade  to  foreign  ships  ? 

Mr.  Chamberlain.  As  I  recall  it,  the  only  nation  which  does  that 
absolutely  is  the  United  Kingdom,  not  the  Provinces  and  self-govern- 
ing dominions  of  the  British  Empire. 

Mr.  Hardy.  Let  me  understand  the  question.  Do  you  mean  na- 
tions that  open  their  trade  to  foreign  flags  or  to  foreign-lbuilt  ships  ? 

Mr.  Edmonds.  Foreign-built  ships  in  the  coastwise  trade. 

Mr.  Chamberlain.  I  understand  the  question  to  refer  to  foreign 
flags. 

Mr.  Hardy.  In  other  words,  what  I  want  to  get  at  is  this:  Does 
not  England  in  regard  to  Great  Britain  and  Ireland  reserve  that  trade 
to  herself? 

Mr.  Chamberlain.  That  is  the  one  exception.  That  is  entirely 
open  to  the  ships  under  any  flag. 

Mr.  Hardy.  Can  American  ships  trade  between  Glasgow  and 
Liverpool  ? 

Mr.  Chamberlain.  Absolutely. 

Mr.  Hardy.  Can  they  trade  between  the  Dominion  of  Canada  and 
England  ? 

Mr.  Chamberlain.  Yes;  we  can  trade  between  Canada  and  Eng- 
land, but  we  can  not  go  from  one  Canadian  port  to  another  Canadian 
port.  Between  the  Dominion  of  Canada  and  England,  so  far  as 
British  and  Canadian  laws  aie  concerned,  navigation  is  precisely  the 
same  as  navigation  between  England  and  some  foreign  country; 
and  so  far  as  Canada  is  concerned,  it  is  the  same  as  navigation  between 
Canada  and  a  foreign  country. 

Mr.  Hardy.  Then  an  American  ship  could  trade  between  English 
ports  ? 

Mr.  Chamberlain.  United  Kingdom  ports. 

Mr.  Hardy.  Yes;  United  Kingdom  ports.  Or  it  could  trade 
between  Montreal  and  Liverpool  without  any  difficulty? 

Mr.  Chamberlain.  Oh,  yes. 

Mr.  Hardy.  But  there  is  no  other  nation  that  does  not  reserve  its 
coastwise  business  to  itself  ? 

Mr.  Chamberlain.  The  rule  that  most  nations  have — there  are 
some  slight  exceptions — is  the  rule  of  reciprocity :  ' '  We  will  allow  your 
ships  to  go  into  our  coastmg  trade  if  you  will  allow  our  ships  to  go 
into  your  coasting  trade."  But  if  you  will  stop  to  think  of  the 
vast  difference  in   coasting  trades  you  will  see  that  reciprocity  in 


188      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

some  instances  would  be  a  matter  of  swapping  dollars  for 
cents.  For  example,  what  is  the  coast  of  Germany?  It  is 
practically  nothing.  On  the  North  Sea,  it  is  less  than  200  miles, 
I  am  sure,  and  I  think  it  is  in  the  neighborhood  of  150  miles.  Now, 
you  see,  the  entrance  into  that  trade  would  be  a  privilege  that 
would  not  be  worth  having. 

Mr.  Loud.  Would  it  be  permissible  for  an  American  ship  to  take 
a  cargo  from  Quebec,  for  instance,  to  Vancouver? 

Mr.  Chamberlain.  No.  That,  you  see,  is  between  two  Canadian 
ports. 

Mr.  Loud.  That  is  what  I  am  getting  at. 

Mr.  Chamberlain.  Here  is  the  rule  of  Canada  and  the  other 
British  self-governing  dominions:  That  the  ships  of  any  nation  can 
engage  in  the  coasting  trade  of  Canada  between  Canadian  ports  if 
the  other  nation  will  admit  ships  under  the  British  flag  to  engage  in 
its  coasting  trade.  Norway,  for  example,  has  such  an  arrangement. 
The  ships  of  Norway  can  carry  between  Canadian  ports,  and  in  return 
for  that  privilege  British  ships  are  permitted  to  carry  between  ports 
•on  the  coast  of  Norway. 

Mr.  Hardy.  How  many  treaties  of  comity  of  that  kind  has 
England  now,  and  with  what  countries  ? 

Mr.  Chamberlain.  There  are  seven  or  eight  of  them.  I  have  the 
list  at  my  office. 

Mr.  Loud.  What  have  you  to  say  as  to  the  detrimental  effect  upon 
our  merchant  marine  of  the  existing  laws  as  to  tonnage  ? 

Mr.  Curry.  Before  you  get  away  from  this  point  I  should  like  to 
ask  you  this:  You  have  stated  that  an  American  ship  may  engage 
in  the  coastwise  trade  of  the  United  Kingdom;  that  is,  England, 
Scotland,  Wales,  and  Ireland.  Is  it  not  true  that  Great  Britain 
practically  protects  her  coastwise  trade  by  charging  a  larger  tonnage 
tax  and  port  dues  on  foreign  ships  in  that  trade  than  it  charges  the 
British  vessels  ? 

Mr.  Chamberlain.  I  have  never  heard  of  it. 

Mr.  Curry.  I  have  heard  that,  and  you  ought  to  be  in  a  position 
to  know. 

Mr.  Chamberlain.  If  you  will  show  me  your  authority  for  that 
I  may  be  able  to  look  it  up. 

Mr.  Curry.  You  can  find  it  out  from  the  British  Board  of  Trade 
Hules  and  the  port  rules. 

Mr.  Chamberlain.  We  have  both  of  those  at  the  office  and  I  have 
given  them  some  attention. 

Mr.  Hardy.  Have  we  not  a  treaty  with  Great  Britain  which 
directly  forbids  her  charging  heavier  dues  to  our  ships  than  to  her 
■own? 

Mr.  Chamberlain.  Since  1815,  I  think  it  is. 

Mr.  Hardy.  1828. 

Mr.  Chamberlain.  I  do  not  think  there  is  anything  of  that  kind. 

Mr.  Curry.  How  about  light  charges  ? 

Mr.  Chamberlain.  Those  are  not  heavy.  The  British  changed 
their  law  to  correspond  with  our  law  as  nearly  as  you  can  reduce 
shillings  to  cents.  I  think  where  we  charge  30  cents  they  charge 
28|  cents — as  near  as  they  can  get  it. 

Now,  Mr.  Chairman,  there  has  been  recently  a  real  effort  made  to 
criticize  the  navigation  laws,  and  I  have  it  here.     It  was  the  effort 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MEECHANT  MARINE.      189 

made  by  a  committee  of  which  Capt.  Dollar  was  one  member  and 
Capt.  Allan  Lockhurst,  American  superintendent  of  the  International 
Mercantile  Marine  Co.,  was  another.  There  were  one  or  two  other 
members  whose  names  at  this  moment  I  do  not  recall.  They  were 
appointed,  you  will  all  recall,  shortly  after  the  outbreak  of  the  war. 
Tnere  was  c[uite  an  assemblage  here  at  Secretary  McAdoo's  office 
to  take  up  shipping  and  other  matters.  They  reduced  their  criticisms 
to  writing,  and  I  have  prepared  copies  for  the  members  of  the  com- 
mittee. I  might  say  that  the  references  to  the  navigation  laws  are  to 
the  edition  of  1911  and  not  the  new  edition  of  1915,  and  I  think  you 
gentlemen  have  them.    [Reading:] 

After  we  have  permission  to  import  foreign-built  ships  and  give  them  the  American 
flag  the  next  and  all-important  consideration  is  that  we  must  have  our  laws  amended 
and  changed  so  as  to  permit  us  to  successfully  operate  our  ships  in  the  foreign  trade 
in  competition  with  those  of  all  nations.  The  American  shipowner  asks  no  advantage 
of  any  kind  or  descriyition  over  foreign  competitors,  but  we  must  le  put  on  a  fair 
competitive  basis.    Therefore  the  following  changes  are  essential  and  necessary: 

Page  30  of  navigation  laws: 

The  measurement  to  be  changed  to  conform  to  the  standard  of  Great  Britain,  so 
that  the  American  ships  will  ha\  e  the  same  measurement. 

Page  54,  section  62,  of  navigation  laws: 

Any  ofhcer  ser\ing  on  foreign  ships  that  will  be  transferred  to  the  American  register 
shall  1  e  entitle  1  to  ser^e  in  a  like  capacity  for  one  year.  At  the  expiration  of  one 
year,  if  he  shall  have  declare  1  his  intention  of  becoming  an  American  citizen,  then  on 
examination  he  can  get  American  papers. 

The  President's  order,  as  you  all  well  know,  covers  that  for  the 
time  being.  The  permanent  policy,  I  take  it,  will  be  settled  by  this 
committee  and  by  Congress. 

Mr.  Greene.  Is  not  that  determined  by  the  President  for  a  term 
of  years— seven  years  ? 

Air.  Chamberlain.  Yes;  it  is  determined  as  to  the  continuance  of 
officers  that  are  on  ships  which  have  been  admitted  or  that  will  be 
admitted  up  to  September.     After  that  it  does  not  hold. 

Mr.  Greene.  But  it  runs  for  the  term  of  seven  years? 

Mr.  Chamberlain.  For  those  that  are  now  on  board;  yes. 

Page  IIG  of  navigation  laws,  fusible  plugs: 

Inasmuch  as  these  are  not  required  or  used  by  the  ships  of  any  other  country,  these 
should  be  abandoned. 

That  is  a  matter  that  is  entirely  within  the  jurisdiction  of  the  in- 
spection service  and  I  am  not  competent  to  express  any  opinion  on 
the  subject. 

Mr.  Hardy.  It  is  a  very  trivial  matter,  is  it  not  ? 

Mr.  Chamberlain.  It  is  not  a  large  matter.  It  certainly  can  not 
be  called  a  handicap  on  the  American  merchant  marine. 

Mr.  Hardy.  Can  you  tell  us  just  what  a  fusible  plug  is  ? 

Mr.  Chamberlain.  It  is  a  little  plug  of  brass  with  a  soft  metal  in- 
side of  it  that  will  melt  as  the  temperature  rises,  I  do  not  remember  to 
what  degree,  but  at  what  is  assumed  to  be  the  danger  point. 

The  Chairman.  Capt.  McAllister,  will  you  explain  that  for  us? 

Capt.  McAllister.  This  fusible  plug  is  a  precautionary  measure 
that  they  use  for  boilers.  In  the  table  sheet  in  the  back  connection 
of  the  Scotch  boiler  they  insert  a  little  plug.  In  the  interior  of  this 
plug  is  a  composition  of  metals  which  melt  easily.  If  the  water  gets 
down  below  this  plug  the  temperature  rises  so  hi^h  as  to  melt  this 
fusible  alloy,  and  that  will  blow  out  and  give  warning  that  the  water 
is  low. 

32910—16 13 


190      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

The  Chairman.  That  is  in  the  interest  of  safety  ? 

Capt.  McAllister.  That  is  in  the  interest  of  safety;  but  there  is 
no  ship  in  the  United  States  Navy  using  it  to-day,  and  there  is  no 
revenue  cutter  which  uses  it  to-day.  They  have  other  precautionary 
measures  which  do  not  make  it  necessary. 

Mr.  Hardy.  It  is  nothing  but  a  safety  valve  ? 

Capt.  McAllister.  It  is  really  a  little  safety  appliance;  yes,  sir. 
they  cost  from  §3  to  !^5  apiece.  They  are  not  expensive,  but  what 
the  ship  people  complain  of  is  the  delay  and  bother  of  fitting  them. 
They  have  to  insert  new  plugs  each  year,  and  they  have  to  cool  the 
boilers  down  to  put  them  in.     It  is  more  bother  than  expense  really. 

Mr.  CuRRY'.  And  it  involves  delay  ? 

Capt.  McAllister.  Delay;  yes,  sir. 

The  Chairman.  It  could  be  dispensed  with  without  militating 
against  safety  ? 

Capt.  McAllister.  As  I  say,  the  United  States  Navy  and  the  Coast 
Patrol  dispensed  with  them  long  ago. 

Mr.  Hardy.  What  do  they  have  in  lieu  of  them  ? 

Capt.  McAllister.  We  simply  watch  the  water.  We  have  water 
gauges  and  gauge  cocks,  and  we  do  not  allow  the  water  to  get  down. 

Mr.  Hardy.  Is  it  not  very  necessary,  with  a  man  that  is  not  par- 
ticularly careful  that  he  be  provided  with  a  sort  of  automatic  safety 
valve  ? 

Capt.  McAllister.  There  should  be  no  steam  boilers  operated  that 
do  not  have  men  to  watch  them  all  the  time. 

Mr.  Curry.  Are  there  any  engineers  employed  in  the  American 
merchant  marine  that  are  not  qualified  ? 

Capt.  McAllister.  I  think  the  engineers  in  the  American  merchant 
marine  are  the  equal  of  any  anywhere. 

Mr.  Curry.  It  takes  a  man  from  10  to  15  years  to  work  up  to  be 
an  engineer.  By  that  time  if  he  does  not  know  his  business  he  ought 
to  get  out  ? 

Capt.  McAllister.  I  think  so. 

Mr.  Edmonds.  Do  not  our  navigation  laws  require  water  tenders  ? 

Capt.  McAllister.  I  think  they  do;  and  they  are  very  essential 
men,  too. 

Mr.  Edmonds.  That  is  one  of  the  things  complained  of.  With 
fusible  plugs  and  water  tenders  both  we  ought  to  have  pretty  safe 
boilers. 

Mr.  Hardy\  It  is  just  suggested  to  me  here  that  we  had  a  vessel 
last  year  where  the  fusible  plug  failed  to  fuse,  and  the  result  was  an 
explosion  of  the  boiler  with  the  killing  of  eight  men,  on  the  Ohio 
River.     It  seems  to  me  we  need  some  safety  device  of  that  kind. 

Mr.  Curry.  This  is  a  rule  of  the  department.  Sometimes  the  laws 
are  blamed  for  what  possibly  are  proper  rules  of  the  department. 
The  water  tender  is  not  required  by  law.  No  foreign  government 
requires,  either  by  their  rules  or  by  law,  water  tenders  on  ships.  Our 
rules  of  the  department  do  require  them.  So  that  is  an  extra  expense; 
it  is  simply  an  expense  that  is  provided  for  by  the  rules  of  the  depart- 
ment and  could  be  rectified  by  repeahng  the  rules.  If  they  ought  to 
be  retained,  they  should  be  retained. 

Mr.  Chamberlain.  The  plugs  are  a  statutory  provision. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      191 

Mr.  CuRRY.  But  the  water  tenders  are  simply  a  regulation  of  the 
department  ? 
Mr.  Chamberlain.  Quite  so.     [Reading:] 

Page  118,  section  128,  of  navigation  laws: 

In  importing  ships  it  will  be  impossible  to  have  the  places  stamped  previous  to  the 
construction  of  the  boiler;  therefore  this  should  be  modified  so  as  to  accept  stamping 
and  certificate  of  the  nation  under  whose  supervision  the  boilers  are  built;  in  other 
words,  the  steamer  as  she  stands  with  her  country's  certificate  shall  be  accepted. 

This,  you  will  find,  is  covered  by  the  act  of  March  3,  1897.  It 
covers  that  fact  quite  fully.  These  gentlemen  seem  to  have  over- 
looked that. 

Page  119,  section  131,  of  navigation  laws: 

Our  law  proA  ides  that  once  a  year  there  shall  be  applied  a  hydrostatic  pressure  equal 
to  one  and  one-half  the  steam  pressure.  Except  Canada,  this  is  not  required  by  any 
other  nation;  therefore  this  should  be  given  up  except  in  the  case  where  the  inspector 
thinks  the  boiler  from  any  cause  has  been  weakened. 

That  is  purely  the  steamboat-inspection  statute,  and  I  do  not  feel 
competent  to  express  any  opinion  on  the  subject  whatever.  It  has 
been  a  matter  of  discussion  off  and  on  for  years.  You  will  recall  that 
there  was  some  talk  of  that  over  at  the  London  conference  from  time  to 
time. 

Page  123,  section  133,  of  navigation  laws: 

All  steel  ships  should  have  the  bulkheads  run  from  the  tank  top  up  to  the  main  or 
weather  deck.  All  such  vessels  should  have  a  water-tight  double  bottom.  No  vessel 
that  will  be  built  hereafter  to  carry  passengers  shall  be  permitted  to  do  so  without  hav- 
ing a  double  bottom. 

Without  going  into  the  merits  of  that  proposition,  it  is  not  in  the 
law  now.  It  certainly  is  not  a  handicap  to  American  ships.  It  is 
not  an  "antiquated  navigation  law";  it  is  a  new  bill  that  you  may 
deem  it  wise  to  enact. 

The  Chairman.  And  if  wc  carry  out  the  international  convention 
on  safety  devices  at  sea  with  reference  to  the  construction  of  new 
ships,  all  nations  will  approve  the  construction  in  the  interest  of  safety, 

Mr.  Chamberlain.  It  will  be  amply  covered,  and  a  great  many 
other  things,  too. 

Page  132,  section  139,  of  Navigation  Laws: 
_  Vessels  not  permitted  to  carry  passengers  or  those  having  passenger  certificates  for 
limited  number  should  be  allowed  to  carry  workmen  from  one  place  to  another  in 
the  United  States  where  they  will  be  required  to  handle  cargo  or  while  doing  repair 
work  on  the  ship. 

That  is  permissible  now,  and  I  do  not  quite  see  the  point  of  the 
criticism. 

Mr.  Hardy.  They  must  have  had  the  idea  that  our  coastwise 
navigation  laws  forbid  it — about  which  I  do  not  know? 

Mr.  Chamberlain.  This  just  refers  to  men  who  are  engaged  in 
repair  work  on  the  ship.  They  are  not  passengers  in  any  sense  of  the 
word. 

!N'Ir.  Hardy.  Your  idea  is  that  under  the  law  as  it  exists  one  of 
these  vessels,  while  it  could  not  carry  passengers  from  one  i^ort  to 
another,  could  on  its  return  voyage,  for  instance,  from  New  York  to 
Gc  Iveston,  carry  workmen? 

Mr.  Chamberlain.  I  have  never  heard  of  a  case  where  a  vessel 
went  quite  that  distance.     Usually  they  go  just  a  short  distance,  as 


192      SHIPPING  BOARD,  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE. 

from  the  dock  to  a  repair  yard  which  is  somewhere  near  by.  Very 
seldom  is  it  farther  than  from  New  York  to  some  of  the  Delaware  Bay 
shipyards,  and  sometimes  not  even  that  far, 

Mr.  Hardy.  Strictly  speaking,  those  men  are  passengers,  are  they 
not? 

Mr.  Chamberlain.  I  think  that  may  be  a  question.  I  am  very 
sure  we  have  held  in  the  case  of  stevedores  that  they  are  not,  and  if 
this  case  came  up  I  think  there  would  be  a  similar  ruling.  At  all 
events,  you  will  see  it  is  such  a  detail,  a  thing  that  happens  so  seldom, 
it  can  not,  it  seems  to  me,  be  charged  as  a  serious  statutory  drawback 
on  the  development  of  American  shipping. 

Page  134,  section  140,  of  na\dgation  laws: 

The  law  at  present  is  that  when  a  ship's  inspection  certificate  expires  she  must  stop 
at  the  United  States  port  that  she  is  in,  even  if  there  are  no  inspectors  there  but  have 
to  come  from  a  distant  port.  All  vessels  should  be  permitted  to  go  to  their  home 
port  for  inspection,  provided  that  the  time  occupied  does  not  exceed  15  days.  Owners 
then  are  able  to  look  after  and  superintend  the  repairs  which  generally  can  be  done 
cheaper  and  quicker  at  the  home  port  than  at  other  places. 

That  is  also  a  matter  of  sufficient  inspection  laws,  about  which  I 
really  do  not  care  to  express  any  opinion.  Of  course  it  is  perfectly 
obvious  that  if  you  have  enough  inspectors  that  situation  will  not 
arise. 

Mr.  Curry.  You  are  the  head  of  that  department  ? 

Mr.  Chamberlain.  Not  of  steamboat  mspection;  that  is  quite 
distinct.     Gen.  Uhler  is  the  head. 

Page  136,  section  141,  of  navigation  laws: 

This  provides  that  the  licensed  officers  must  point  out  all  the  defects  and  imper- 
fections known  to  them,  in  the  hull,  equipment,  and  boilers. 

Mr.  Greene.  That  is  a  recent  law  ? 

^Ir.  Chamberlain.  That  was  just  passed  a  short  time  ago. 

This  should  read  that  on  arrival  at  any  port  they  shall  immediately  communicate 
with  the  owners  and  report  any  defects  or  imperfections  in  the  ship  as  well  as  to 
report  to  the  inspectors. 

That  is  not  "antiquated,"  because  that  was  only  passed  a  year 

Mr.  Greene.  Would  it  not  be  wise  to  add  that  to  this  provision, 
"that  licensed  officers  must  point  out  all  defects  immediately." 
Would  it  not  be  wise  to  have  them  do  it  at  once  rather  than  to  have 
them  delay  until  they  get  ready  to  sail  ? 

Mr.  Chamberlain.  My  recollection  is — although  that  is  also  a 
steamboat-inspection  iiile  and  I  ought  not  to  say  anything  about 
it — that  this  was  substantially  the  law  until  it  was  changed  about 
a  year  or  so  ago. 

The  Chairman.  The  only  change  in  the  law — if  I  know  what  you 
are  referring  to — is  this:  Officers  on  vessels  may  complain  of  defects 
or  insufficient  equipment  directly  to  the  inspector  and  without  hav- 
ing knowledge  of  the  fact  come  to  the  ship  owner.  Heretofore  the 
officer  has  been  under  restraint;  he  was  afraid  to  make  complaint 
for  fear  he  would  be  discharged.  Now,  if  a  communication  is  made 
to  the  inspector  the  inspector,  of  course,  verifies  for  himself  whether 
or  not  the  conditions  exist.  It  is  to  prevent  that  restramt  on  the 
captain  and  at  the  same  time  to  insure  safety  to  the  ships. 

Mr.  Greene.  I  do  not  object  to  that  at  all,  but  from  what  Mr. 
Chamberlain  read  I  thought  it  would  be  wise  to  provide  that  when  a 


SHIPPING  liOARD^  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE.      193 

vessel  arrived  in  port  these  defects  should  be  reported  at  once  rather 
than  delay  until  the  vessel  was  about  ready  to  sail  and  then  report  a 
defect  and  have  to  wait  and  get  it  fixed. 

Mr.  Chamberlain.  An  officer  ought  to  do  that  anyway,  without 
having  an  act  of  Congress  to  tell  him  to  do  so. 

Mr.  Greene.  I  think  so  myself,  but  it  ought  to  be  provided  that 
the  defects  shall  be  remedied  when  the  vessel  arrives  in  port  rather 
than  allow  it  to  be  delayed  until  they  get  ready  to  sail.  There  ought 
to  be  some  definite  time. 

Mr.  Chamberlain  (reading) : 

Page  136,  section  141  o/  navigation  laws: 

After  the  licensed  officer  has  signed  the  articles  he  should  be  compelled  to  proceed 
with  the  ship  unless  through  sickness  or  some  reasonable  cause. 

That  in  a  sense  is  a  criticism  of  the  lack  of  law,  not  a  criticism  of  an 
existing  law.  That  is  a  steamboat-inspection  matter — all  matters 
pertaining  to  licensed  officers  are — and  you  would  not  expect  me  to 
go  into  a  question  of  that  kind. 

Page  166.  section  1 83  of  na^dgation  laws: 

This  section  provides  that  it  will  be  illegal  for  any  person  to  board  a  ship  until  she  is 
completely  moored  without  permission  of  the  master.  This  should  read  that  no  person 
should  be  allowed  to  board  a  ship  at  anchorage  or  dock  or  any  place  where  she  is  Avithout 
first  haAing  obtained  the  consent  of  the  captain  or  the  officer  in  charge.  The  penalty 
provided  for  in  this  section  should  remain. 

That  does  not  seem  to  me  to  be  necessarily  a  matter  for  legislation 
at  all.  That  is  a  matter  of  the  discipline  of  the  ship.  If  the  captain 
chooses  to  say  you  can  not  come  on  board,  you  can  not,  and  that  is  all 
there  is  to  it.  That  is  the  way  it  works  practically.  So  far  as  the 
large  companies  are  concerned  which  have  extensive  docks  and  piers, 
they  have  fences,  as  you  will  recall,  and  a  man  can  not  get  on  the  pier 
unless  he  has  a  pass,  which  is  a  perfectly  proper  matter  of  internal 
administration  of  the  company  or  the  ship.  It  hardly  seems  to  me  to 
be  worthy  of  the  dignity  of  congressional  action  w^hen  men  can  do  it 
themselves.     But  you  may  think  differently  about  that. 

Mr.  Cltrry.  Under  the  pohce  regulations  of  some  States,  are  not 
the  captains  required  to  permit  certain  people  aboard  ? 

Mr.  Chamberlain.  Only  those  who  come  for  public  purposes,  such 
as  quarantine  officers  and  it  is  perfectly  proper  they  should.  I  do  not 
think  that  is  what  the  criticism  means. 

Mr.  Edmonds.  They  can  not  fence  off  a  wharf  in  most  States,  be- 
cause the  State  law  says  that  the  opening  to  a  water  front  is  public 
property,  and  they  must  provide  passageway  through  there  for  any- 
body tliat  has  business  there.  I  have  been  forced,  in  the  case  of  a 
wharf  of  mine  in  Philadelphia,  to  have  an  open  gate  at  all  times  and  a 
watchman  to  let  people  in  and  out.  If  they  want  to  have  access  to  a 
boat,  we  have  to  let  them  go  in. 

Mr.  Chamberlain.  But  you  do  not  lease  the  wharf? 

Mr.  Edmonds.  I  lease  the  w^harf,  and  I  am  forced  to  put  a  watchman 
there  and  have  an  open  gateway  there  to  let  people  go  in  and  out 
that  have  boats  moored  there  or  are  going  to  have  boats  moored 
there.     That  is  a  State  regulation  of  Pennsylvania. 

The  Chairman.  It  is  very  desirable,  too,  is  it  not? 

Mr.  Edmonds.  Yes;  but  I  really  think  a  captain  should  have  the 
privilege,  and  that  he  has  the  privilege,  of,  preventing  anybody  from 
getting  on  his  boat. 


194      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Chamberlain.  The  matter  did  not  strike  me  generally  as  a 
proper  subject  for  Federal  legislation.     [Reading:] 

Pages  118  and  119,  section  129,  of  navigation  laws,  re-vased  edition,  April  5,  1913: 
This  provides  that  the  local  inspectors  shall  designate  the  number  of  officers  and 
engineer's  crew  that  are  necessary  for  the  safe  navigation  of  the  ship — 

All  this  part  has  been  modified  in  some  respects  by  the  passage  of 
the  seamen  s  act — 

On  American  ships  they  have  been  putting  on  considerably  more  men,  especially 
in  the  engine  room,  than  are  carried  by  foreign  ships.  The  number  of  men  that 
they  should  put  on  should  be  limited  to  the  same  number  that  all  similar  foreign 
ships  are  permanently  carrjdng. 

That,  in  so  far  as  it  is  a  valid  criticism,  is  not  a  criticism  of  the 
law  but  a  criticism  of  the  acts  of  individual  inspectors  here  and 
there,  which  are  alwaj^s  subject  to  review,  first,  by  the  supervising 
mspector  of  the  district,  and  then  in  the  last  analysis  by  appeal  to 
the  Supei'vismg  Inspector  Getieral  at  Washington.  It  certainly  is 
not  a  valid  criticism  against  the  law;  it  may  at  times  be  a  vahd 
criticism  against  the  acts  of  individual  inspectors. 

]Vlr.  Hardy.  Would  it  not  be  a  very  strange  law  if  we  told  our 
inspectors,  "You  must  conform  to  what  some  other  country  does 
with  reference  to  the  number  of  officers?" 

Mr.  Chamberlain.  I  think  it  would  be  a  very  difficult  law  to 
enforce. 

Mr.  Hardy.  And  it  would  be  next  to  a  "fool"  law,  would  it  not? 

Mr.  Chamberlain,  If  it  were  a  fool  law,  I  can  not  believe  for  a 
minute  that  Congress  would  pass  it,  Judge.  It  might  be  a  fool  biU. 
[Laughter.] 

This  next  paragraph  will  particularly  interest  you,  Judge: 

On  page  2  of  the  Re\dsed  Statutes,  which  requires  that  all  ships  of  a  thousand  tons 
QT  over  shall  carry  three  mates,  this  should  be  changed  to  read  2,000  tons  shall  carry 
three  mates. 

That,  I  take  it,  is  a  reference  to  the  Hardy  mates  act. 

IVIr.  Hardy.  Not  an  antiquated  law,  at  any  rate  ? 

Mr.  Chamberlain.  It  is  not  antiquated;  we  all  know  that. 

Mr.  Edmonds.  Do  these  shipowners  recommend  that  ? 

Mr.  Chamberlain.  This  is  then-  criticism  of  the  "antiquated  navi- 
gation laws"  that  was  submitted. 

Mi\  Greene.  I  suppose  they  think  that  om-  friend  Hardy's  law 
ought  to  have  been  antiquated. 

%h\  Chamberlain.  There  is  a  great  deal  to  be  said  on  that  subject, 
by  the  way,  some  time  or  other. 

Mr.  Hardy.  That  is  the  law  that  cast  its  shadow  before  it  and 
destroyed  our  merchant  marine  before  it  was  enacted. 

IVir.  Chamberlain  [reading]: 

Temporary  register  of  a  ship:  Rules  and  regulations  should  be  laid  down  so  that, 
as  in  the  present  crisis  caused  by  the  European  war,  a  ship  should  be  able  to  obtain 
the  American  flag  without  any  delay  while  in  a  foreign  port  to  bring  her  temporarily 
to  this  country. 

That  biU  was  mider  way  at  the  time  this  criticism  was  \\Titten.  It 
was  passed,  and  is  the  act  of  March  4,  1915.  So  of  course  that  criti- 
cism should  be  withdrawm. 

Apprentices:  Any  ship  carrjdng  American  boys  as  apprentices  should  have  a  rebate 
from  her  tonnage  dues  amounting  to  150  a  year  for  every  apprentice  carried. 


i 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      195 

You  can  take  that  for  what  it  is  worth.     I  will  not  go  into  that. 

A  continuous  discharge  certificate  book  shall  be  carried  by  all  men  in  the  merchant 
marine  service,  which  is  a  certificate  of  character  and  efficiency  showing  on  what 
ships  the  man  has  served  and  the  time.  This  is  essential,  as  it  will  make  it  easier 
to  get  efficient  and  competent  men. 

I  might  say  that  a  great  many  years  ago  I  tried  to  carry  out  a 
scheme  of  this  kind,  but  its  success,  you  will  see,  depends  on  the 
seaman  keeping  the  book  and  his  discharges. 

Mr.  Greene.  They  keep  them  in  the  Navy  apparently. 

Mr.  Chamberlain.  They  do,  because  they  get  all  sorts  of  privilege3 
as  the  result  of  keeping  them.  I  was  rather  sanguine  in  those  days, 
when  I  was  much  younger  than  I  am  now,  that  the  men  would  take 
this  up,  because  on  the  basis  of  these  certificates  of  discharge  a  man 
gets  admission,  for  example,  into  Sailors'  Snug  Harbor,  New  York, 
and  they  get  other  advantages  in  the  way  of  marine-hospital  treat- 
ment and  all  that  sort  of  thing;  but  as  a  voluntary  proposition  it 
failed.  That  of  course  is  a  matter  that  can  not  be  carried  out  very 
successfully  unless  the  seamen  themselves  are  willing  to  keep  these 
books.     • 

Mr.  Greene.  They  do  in  the  Navy. 

Mr.  Cha:mberlain.  But  the  Navy  conditions  and  the  merchant 
marine  conditions  are  quite  different.     [Reading:] 

Where  licensed  officers  and  engineers  combine  to  compel  us  to  put  on  more  men 
on  board  the  sliip  tliau  tlie  ship's  license  calls  for,  some  drastic  measures  should  be 
taken  to  deal  ^^•itll  licenses. 

That  is  another  licensed-ofhcer  matter  and  comes  under  the  Steam- 
boat Inspection  Service.  That,  of  course,  is  a  matter  of  combination 
of  men,  and  I  do  not  know  to  what  extent  the  statute  could  regulate 
that  if  you  tried.  And  then  there  is  the  question  of  the  disposition 
to  do  it. 

Stowaways.     They  should  be  prosecuted  for  trespass  and  imprisoned. 

There  has  been  a  bill  to  that  effect  before  Congress  off  and  on  for  a 
number  of  years. 

The  Chairman.  I  have  the  draft  of  a  bill  here  now.  I  have  not 
had  time  to  work  it  out,  but  it  ought  to  be  stopped. 

Mr.  Chamberlain.  If  there  is  ever  time  to  consider  it  I  do  not 
think  there  will  be  serious  opposition.  It  is  one  of  those  things  that 
has  not  attracted  attention. 

That  is  a  summary  of  the  objections  of  several  gentlemen  who  are 
certainly  among  the  most  competent  men  to  criticize  the  navigation 
laws,  and  it  was  the  result  of  careful  study.  I  take  it  that  it  fairly 
represents  the  criticism 

Mr.  Hardy.  As  a  serious  criticism  it  is  almost  comical,  is  it  not? 
That  is  my  opmion. 

Mr.  Curry.  There  is  one  thing  here  I  am  very  much  interested  in 
and  I  would  like  to  get  some  information  on  it.  I  have  been  trying 
to  get  information  and  I  have  not  been  able  to.  That  is  the  proposi- 
tion of  how  the  American  system  of  registration  handicaps,  so  far  as 
cost  of  operation  is  concerned,  American  ships  in  foreign  ports. 

Mr.  Chamberlain.  I  have  reserved  the  matter  of  measurement  for 
the  last,  because  it  is  a  matter  quite  apart. 

Mr.  Curry.  You  mentioned  this  measurement  proposition  at  the 
start  ? 


196      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

]\Ir.  Chamberlain.  Yes;  and  I  have  reserved  that  to  this  time, 
and  I  will  go  ahead  now  if  you  wish.  The  criticism  is  not  at  the 
present  time  a  valid  one,  because  we  have  almost  identically  the 
measurement  regulations  of  the  United  Kingdom.  Our  laws,  in  fact, 
will  give  certam  kinds  of  ships  less  tonnage  than  the  British  laws  do. 
The  Secretary,  Mr.  Redfield,  referred  to  that  yesterday.  It  will  give 
the  ships  less  tonnage  in  these  respects 

Mr.  Cltiry.  That  is  one  of  the  direct  charges  against  the  laws,  and 
and  I  have  not  been  able  to  find  out  wherein  it  is  detrmiental  to  the 
American  ships. 

Mr.  Chamberlain.  I  do  not  think  it  is.  There  have  been  times 
when  it  was 

Mr.  Curry.  Please  take  your  time  so  we  can  get  this  information. 
It  is  not  only  for  us  but  for  people  who  are  probably  misinformed 
on  this  proposition. 

Mr.  Hardy.  We  want  you  to  make  that  as  clear  as  you  can. 

Mr.  Chamberlain.  In  the  first  place,  in  considering  the  matter  of 
ship's  tonnage  you  want  to  dismiss  from  your  mind  all  thought  of 
weight.  The  term  "ton"  has  not  anything  to  do  with  weight  at  all. 
It  refers  to  the  cubic  contents  of  the  ship,  fOO  cubic  feet  to  the  ton. 
The  gross  tonnage  is  the  entire  cubical  contents  of  the  ship.  That 
cubical  content  is  made  up  of  two  kinds  of  spaces:  The  spaces  that 
result  in  a  revenue  to  the  ship — namely,  those  that  are  devoted  to 
the  carrying  of  cargo  and  the  carrymg  of  passengers,  from  which  the 
ship  makes  money;  and  the  spaces  that  cost  money — namely,  the 
spaces  occupied  by  the  crew,  the  spaces  occupied  by  the  engines,  the 
bunkers,  the  coal  for  the  boilers  to  make  the  steam,  and  a  few  minor 
matters,  such  as  the  boatswain's  stores,  the  chart  room,  and  several 
other  details. 

Mr.  Curry.  The  entire  gross  tonnage  of  the  ship  includes  the 
cubical  contents  of  the  interior  of  the  ship,  added  to  which  is  the 
cubical  contents  of  everything  on  the  deck  of  the  ship  that  is  inclosed, 
figured  on  the  basis  of  100  cubic  feet  to  the  ton. 

Mr.  Chamberlain.  Permanently  inclosed.  That  is  the  gross  ton- 
nage. Now,  that  being  determined  by  measurement,  you  next 
determine  what  to  take  out.  The  engine-room  spaces,  the  bunkers, 
the  crew's  quarters,  and  these  other  minor  matters  are  measured  and 
taken  out  from  the  gross  tonnage.  "\^Tiat  is  left  is  the  net  registered 
tonnage,  on  which  most  ship  charges  are  imposed — for  example,  our 
tonnage  taxes  in  this  country.  They  are  about  the  only  Federal 
charges  that  we  will  have. 

To  go  back  again,  the  system  now  in  general  use  by  maritime 
nations — I  do  not  think  there  is  any  exception  to  it — is  what  is  called 
the  Moorsom  system,  which  was  developed  in  England  in  1855  or  1856 
by  a  man  named  jMoorsom,  although  its  foundation  was  laid  by  a 
French  marine  architect. 

The  chances  for  difference  in  the  application  of  the  system  arise 
from  the  necessary  ambiguit}'  of  the  words.  You  can  not  very  well 
help  that.  Up  to  1882  the  laws  of  the  United  States  provided  simply 
lor  the  ascertainment  of  the  gross  tonnage.  We  made  no  deductions 
whatever  to  determine  the  net  tonnage.  Consequently  up  to  1882 
the  American  ship  would  pay  charges  on  its  entire  cubical  contents; 
the  foreign  ship,  more  particularly  the  British  ship,  would  not.  It 
would  pay  on  the  remainder  after  the  machinery  spaces  and  all  that 


SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      197 

sort  of  thing  had  been  deducted.  It  would  pay  only  on  the  net  ton- 
nage. At  that  thne  the  criticism  of  our  measurement  laws  would 
have  been  perfectly  valid,  and  it  was  a  very  important  factor.  Con- 
gress in  1882  corrected  that  in  part. 

A  sailmg  vessel,  of  course,  is  pretty  nearly  all  cargo  space.  The 
amount  that  is  requhed  for  the  crew,  for  the  boatswain's  stores,  and 
that  sort  of  thing,  is  very  small,  so  you  can  dismiss  that.  That  is 
the  same  everywhere,  and  there  has  never  been  any  question  about 
that,  so  far  as  I  know. 

Wlien  you  come  to  the  deductions  for  engines  and  the  accompany- 
ing coal  bunkers  there  are  two  distinct  rules  which  are  really  quite 
radically  different.  Without  going  into  the  details,  because  they  are 
quite  elaborate — I  might  say  that  this  matter  was  taken  up  fuHy  in 
my  report  for  1911  if  anybody  has  curiosity  enough  to  go  into  it. 

The  two  rules  for  the  deduction  of  propelling  power  are  called,  first, 
the  Danube  rule,  and,  second,  the  board  of  trade  rule,  which  is  the 
rule  employed  by  the  British  Government  and  it  has  been  pretty  gen- 
erally adopted.  Without  going  into  all  the  details  of  the  differences 
between  the  two  systems  I  will  say  that  the  Danube  rule  in  the 
case  of  most  ships  makes  a  much  less  deduction  for  propellmg  power, 
and  consequently  it  increases  the  net  tonnage  on  which  charges  are 
paid.  The  act  of  1882  which  I  spoke  of  appHed  the  Danube  rule. 
In  other  words,  it  reduced  but  continued  the  handicap.  Before  1882 
we  did  not  have  any  deductions.  It  was  an  improvement,  but  it  did 
not  bring  our  law  up  to  the  current  British  practice  and  the  practice 
of  most  other  maritime  nations.  The  Danube  rule  is  the  rule  appUed 
under  the  Suez  Canal  measurement  and  the  Panama  Canal  measure- 
ment. Those  are  money-making  concerns;  they  want  to  get  just  as 
much  revenue  as  they  can,  of  course,  so  they  make  the  smallest  de- 
duction for  machinery,  thus  creating  the  largest  net  tonnage.  By 
1895  the  Frye  measurement  law  was  passed,  and  we  changed  to  the 
British  Board  of  Trade  rule,  and  since  1895  we  have  had  the  same 
rule. 

The  remaining  factor,  which  is  really  quite  important,  depended  on 
the  different  interpretations  of  the  words  ''permanent  closed-in 
space.''  That  refers,  of  course,  to  spaces  on  the  upper  deck;  and  down 
in  the  hull  of  the  ship.  You  can  see  there  is  a  great  chance  for  differ- 
ence between  men  as  to  what  should  be  regarded  as  permanently 
inclosed  and  what  should  not.  For  example,  take  this  room.  If 
you  take  the  doors  off  and  the  windows  out  someone  might  say,  "That 
room  is  not  permanently  inclosed;  it  is  open  there,  open  there,  and 
open  there."  If  you  put  the  doors  and  wmdows  in  a  man  might  say, 
"That  is  permanently  inclosed;  the  windows  are  shut  and  the  doors 
are  shut."'  Another  man  might  come  along  and  say,  "Oh,  no;  that 
is  not  permanently  inclosed.  You  can  open  the  doors  and  you  can 
open  the  windows.'' 

You  might  have  this  situation.  The  doors  might  be  taken  off  and 
the  windows  taken  out,  but  you  might  have  angles  running  up  and 
down  the  sides  where  you  could  slip  in  planks  and  calk  them  up. 
Then  one  man  would  say,  "Yes;  that  is  permanently  mclosed." 
Another  man  would  say,  "No;  those  things  are  put  in  there  only 
temporarily.'"  I  am  stating  only  the  simplest  of  cases  that  occur  to 
me;  there  are  all  sorts  of  chances  for  different  interpretations  of  the 
words  "permanently  closed-in  spaces." 


198      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

The  British  interpretaticn  of  that  phrase  has  been  in  the  way  of 
greater  Uberahty.  That  is,  practically  anythino;  they  could  call  an 
open  space  they  have  called  an  open  space.  The  tendency  of  our 
regulations  for  years  was  to  apply  the  strictest  construction;  any- 
thing that  we  could  call  closed  in  we  would  call  closed  in. 

Mr.  Curry.  That  is  the  nub  of  the  whole  proposition. 

Mr.  Chamberlain.  Yes;  that  is  the  nub  of  the  whole  proposition. 

Mr.  Curry.  The  rules  of  your  department  have  been  to  consider 
as  net  tonnage  everything  that  could  possibly  be  considered  as  net 
tonnage. 

]Mr.  Chamberlain.  I  say  that  is  the  tendency. 

Mr.  Curry.  And  the  rule  of  Great  Britain  is  to  eliminate  as  much 
as  they  can  ? 

Mr.  Chamberlain.  That  in  a  general  way  describes  the  tendencies. 

Mr.  Curry.  That  is  the  rule  of  the  department  ? 

Mr.  Chamberlain.  Oh,  yes;  and  as  I  say  we  have  changed  that 
gradually  from  time  to  time.  The  question  is  not  about  an  act  of 
Congress,  but  about  the  technical  meaniiig  of  words.  The  criticism 
is  ]iot  a  legitimate  charge  against  the  law,  but  it  is  a  fair  charge 
against  the  administration  of  the  laws.  I  might  say  that  years  ago 
we  began  modifying  that  and  tending  toward  the  British  rule. 

But  there  is  another  thing  to  be  borne  in  mind  about  the  British 
rule.  Take  this  room,  with  the  doors  out  and  the  windows  off,  with 
this  table  in  it.  The  British  would  call  that  an  open  space.  If  this 
table  represents  cargo,  then  under  the  British  system  a  specific  law 
provides  for  the  measurement  of  what  is  called  deck  cargo,  which  is 
cargo  in  these  so-called  open  spaces.  They  would  measure  the 
table  and  say,  "While  the  whole  space  is  open,  this  space  occupied  by 
cargo  we  are  going  to  measure  in  and  charge  you  light  dues  on  that 
space."  The  British  law  covers  that;  the  United  States  law  does  not. 
We  have  no  authority  to  do  that  at  all.  We  would  have  to  measure 
the  whole  space  or  none  of  it.  We  have  to  say  that  this  entire  space 
shall  be  counted  or  it  shall  not  be  counted.  The  British  law  says, 
"We  will  not  count  the  space  if  the  space  is  empty;  if  there  is  any- 
thing in  the  space  we  will  make  you  pay  for  space  so  occupied  by 
cargo. 

That  situation  was  perfectly  well  known  and  fuUy  explained  at  the 
time  the  measurement  law  of  1895  was  passed.     And  I  may  say 

Mr.  Curry.  That  was  taken  up  by  Senator  Frye. 

Mr.  Chamberlain.  As  I  say,  in  the  enforcement  of  these  rules  we 
have  had  to  consider  that  matter  all  the  wliile,  that  we  could  not  go 
half  way  as  the  British  can,  because  we  do  not  have  the  laws  that 
would  authorize  us  to  do  that.  We  could  not  charge  for  the  deck 
cargo  and  let  the  rest  go  clear,  so  we  considered  we  had  to  lean  toward 
taking  it  all.  That  is  the  revenue  theory,  and  it  is  the  usual  theory 
of  all  Government  officers. 

Mr.  Curry.  Under  the  conditions  we  have  in  our  merchant  marine, 
do  you  not  think  we  could  be  a  little  more  hberal  ? 

Mr.  Chamberlain.  For  some  years  we  have  gradually  been  modify- 
ing these  rules,  with  a  tendency  in  the  direction  of  greater  liberahty. 
But  I  have  hesitated  for  a  long  time  to  make  the  change,  which  is 
quite  radical — to  take  the  British  rules  in  toto.  After  you  passed  the 
ahip-registry  act,  which  suspended  the  measurement  laws  and  other 
laws  altogether,  it  seemed  to  me  that  the  act  was  an  instruction  to 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      199 

modify  our  regulations.  In  fact,  when  we  were  considering  the  draft 
of  the  ship-registry  act,  you  will  doubtless  recall.  Judge,  when  you 
and  Mr.  Underwood  were  in  my  office,  we  took  up  the  question  of 
measurement,  and  I  stated  it  was  not  absolutely  necessary  to  cover 
that  in  the  bill  because  it  could  be  done  by  regulation.  But  it  was 
thought  desirable  to  put  that  into  the  law,  and  I  have  regarded  that 
as  an  expression  by  Congress,  although  it  was  not  in  terms,  in  favor 
of  the  British  rules.  ^Uso,  if  we  did  not,  we  would  have  this  singular 
situation.  We  would  have  tliese  150  and  odd  slups  that  were  ad- 
mitted with  this  very  considerable  deduction,  and  our  own  ships — 
the  few  with  shelter  decks — in  tliis  country  would  not  have  it. 

That  act  was  passed  August  18.  Early  in  September  we  sent 
around  word  to  all  collectors  that  anybody  who  applied  for  remeasure- 
ment  of  these  shelter-deck  spaces  could  apply  to  our  office  for  ap- 
proval of  remeasurement.  We  asked  them  to  pass  that  word  around 
among  all  interested  persons.  Nobody  heeded  it.  Nobody  applied. 
The  truth  of  the  matter  is  that  we  have  never  built  very  many  qf 
these  shelter-deck  ships — very  few  of  them,  indeed.  We  have 
adopted  different  types.  It  may  be  said  that  the  reason  we  have 
not  built  them  was  that  they  did  not  have  the  advantage  of  the  de- 
duction. That  may  be,  but  there  are  other  advantages  connected 
with  the  other  style  of  ship.  The  American-Hawaiian  ships,  for 
example,  are  not  shelter-deck  ships,  and  they  are  the  principal  cargo 
ships  we  have.  They  do  not  get  the  advantage  of  any  change  under 
this  new  rule;  they  measure  the  same  under  the  British  rules  and 
under  our  rules.  It  has  only  been  within  a  relatively  short  time  that 
we  have  had  any  very  considerable  number  of  bulk-cargo  carriers 
under  the  American  flag. 

Mr.  Curry.  The  service  for  deck  cargoes  is  very  small  ? 

Mr.  Chamberlain.  Yes.  But  you  are  using  the  words  "deck 
cargo"  in  one  sense  and  I  in  another,  and  I  am  afraid  our  minds  do 
not  quite  touch.  You  mean  a  cargo  right  out  on  the  deck,  open  to 
the  weather.     I  am  talldng  about  the  cargo  that  is  in  these  spaces. 

Mr.  Curry.  I  mean  the  inclosed  spaces  for  cargo;  I  am  not  talk- 
ing about  a  lumber  ship. 

Mr.  Chamberlain.  I  was  going  on  to  say  that  on  September  5, 

1914,  right  after  this  ship-registry  act  was  passed,  we  sent  word 
around  to  the  collectors  to  advise  the  owner  of  every  seagoing  Ameri- 
can steamer  that  he  could  apply  for  a  revision  of  measurement  on 
the  ground  that  sheltered  places  with  openings  at  the  sides  or  ends 
had  been  included  in  the  tonnage.     None  came  in.     On  March  16, 

1915,  revised  regulations  on  shelter  decks  were  issued,  and  on  July 
13,  1915,  these  modifications  were  carried  into  a  general  revision  of 
the  American  measurement  regulations,  printed  in  a  separate  pam- 
phlet, together  with  the  Suez  Canal  rules.  A  special  form  of  certifi- 
cate in  accord  with  the  Suez  rules  was  also  issued  for  American  ships 
which  may  make  use  of  that  canal. 

Mr.  Curry.  Of  course,  we  did  not  have  that  kind  of  ships  built  at 
that  time.  I  suppose  there  are  some  of  them  being  remeasured  at 
present  ? 

Mr.  Chamberlain.  Yes,  sir. 

Mr.  Curry.  I  would  hke  to  ask  before  you  go  if  an  American 
ship  pays  more  tolls  going  through  the  ranama  Canal  than  an 
identical  sister  British  ship  pays  ? 


200      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Chamberlain.  I  do  not  see  how  it  can.  |l| 

Mr.  Curry.  The  charge  has  been  made  that  it  is  possible.  *  ' 

Mr.  Chamberlain.  I  do  not  see  how  it  can  happen. 
Mr,  Curry.  In  the  foreign  trade  you  had  a  rule,  under  the  law 
passed  March  2,  1895,  that—' 

Upon  application  by  the  owner  or  master  of  an  American  vessel  in  foreign  trade, 
collectors  of  customs,  under  regulations  to  be  approved  by  the  Secretary  of  Commerce 
and  Labor,  are  authorized  to  attach  to  the  register  of  such  vessel  an  appendix  stating 
separately,  for  use  in  foreign. ports,  the  measurement  of  such  space  or  spaces  as  are 
permitted  to  be  deducted  from  gross  tonnage  by  the  rules  of  other  nations  and  are  i 

not  permitted  by  the  laws  of  the  United  States. 

Under  that  section  could  not  an  American  ship,  even  before  you 
put  the  British  rule  into  operation,  have  taken  advantage  of  that  sec- 
tion and  not  have  had  to  pay  more  port  duos  or  tonnage  dues  ? 

Mr.  Chamberlain.  Absolutely;  that  is  what  it  was  passed  for. 
That  is  part  of  the  act  of  1805,  is  it  not? 

Mr.  Curry.  Yes.  • 

Mr.  Chamberlain.  It  was  passed  for  just  that  purpose.  ^t 

Mr.  Curry.  So  that  in  reality  there  is  nothing  in  the  claim  that  an       ^| 
American  ship  is  handicapped  so  far  as  cost  of  operation  is  concerned  * 

on  account  of  the  American  system  of  measurement  ? 

Mr.  Chamberlain.  I  do  not  see  how  anybody  can  take  the  view 
that  it  is. 

Mr.  Curry.  If  you  wdl  be  more  liberal  in  the  future  in  reference  to 
the  measurement'  of  these  ships,  and  figure,  tor  instance,  the  upper- 
deck  space  on  that  ship  the  same  as  they  do  in  Great  Britain,  possibly 
there  will  not  be.  I  think  that  is  not  a  matter  for  legislation;  I  think 
it  is  a  matter  for  a  rule. 

'Mr.  ('hamberlain.  Now,  you  have  referred  to  that  ship  [pointing 
to  photograph  of  a  Clyde  liner  on  the  wall].     You  speak  of  the  passen- 
ger space  above  the  upper  deck.     Under  the  American  law  those       Mi 
passenger  spaces  are  not  measured  at  aU.     Tender  the  British  law  a       m\ 
British  shij:>  like  that  wUl  have  those  cabins  all  measured.     So  we  de-       ^' 
duct  a  very  large  amount  which,  in  the  case  of  some  of  these  big 
liners  goes  iip  to  1,000  or  2,000  tons.     There  we  are  reaUy  very  much 
more  liberal.     We  are  too  liberal.     Congress  passed  a  law  years  ago 
to  exempt  such  passenger  accommodation  on  Mississippi  River  steam- 
boats, but  it  was  passed  in  general  terms,  and  it  applies  just  as  much 
to  the  sea  as  it  does  to  the  Mississippi  River. 

Again,  the  deductions  for  propelling  machinery,  in  the  case  of  very 
high-powered  steamers  more  particularly,  like  the  Lusitania  and 
some  of  the  big  French  ships,  are  so  large  that  it  will  run  in  some  cases 
up  to  72  per  cent  of  the  entire  tonnage  of  the  ship.  It  got  to  be  so 
large  that  the  British  Government  sometime  ago  said,  "You  can  not 
deduct  more  than  55  per  cent  for  that  purpose."  We  have  not  any 
such  limitation.  It  has  been  called  to  the  attention  of  Congress,  but 
you  have  not  had  an  opportunity  to  take  that  up. 

Again,  take  that  Imiitation'on  deck  cargo.  That  is  all  counted  in 
foreign  ports;  we  do  not  count  it  at  all.  Instead  of  our  laws  being 
more  severe  on  the  subject  of  measurement,  my  dear  sir,  they  are 
very,  very  much  more  liberal  in  those  particular  types  of  ships  we  are 
talking  about. 

Mr.  Curry.  In  the  tramp  ships  or  raerchant  ships,  of  course,  you 
can  be  a  little  more  liberal  in  counting  out  space  ? 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      201 

Mr.  Chamberlain.  Not  any  more  than  wo  are  under  our  regula- 
tions. 

Mr.  Curry.  But  more  than  you  have  been.  It  is  another  evidence 
to  my  mind  that  these  "antiquated  navigation  laws"  are  simply  a 
matter  of — — - 

Mr.  Chamberlain.  Of  administration,  to  a  very  large  extent. 

Mr.  CiTRRY.  Simply  putting  into  operation  a  rule  of  the  department. 

Mr.  Chamberlain.  If  anybody  has  a  guilty  conscience  on  the 
subject  of  these  matters  it  must  be  men  in  places  somewhat  like  the 
one  I  hold,  rather  than  you  gentlemen  in  Congress.  There  is  not  any 
doubt  about  that  in  my  mind. 

Mr.  Curry.  And  when  it  is  likely  we  will  appropriate  $50,000,000 
for  an  American  merchant  marine,  it  seems  to  me  the  department  of 
the  Government  for  which  we  are  appropriating  should  be  just  as 
liberal  as  possible  and  give  these  ships  ail  the  advantage  they  can, 
not  only  in  coastwise  trade  but  in  foreign  trade  and  through  the 
canal. 

Mr.  EDAjONrs.  If  this  shipping  board  were  to  charter  a  new  ship 
and  recharter  it  to  some  line  to  operate,  is  it  required  under  this  bill 
that  that  ship  shall  have  an  American  registry  ? 

Mr.  Chamberlain.  Oh,  no;  I  do  not  think  the  bill  means  that. 

Mr.  Edmonds.  I  was  informed  yesterdav  they  would  get  a  tem- 
porary American  registry.     They  told  us  that  yesterday. 

Mr.  Chamberlain.  A  chartered  British  ship  ? 

Mr.  P]da[onixs.  Yes.  If  wo  charter  a  Britisli  ship  this  board  may 
want  to  recharter  it  to  somebody  that  wants  to  run  it  on  one  or  two 
voyages. 

Mr.  Chamberlain.  I  think  there  must  have  been  some  misunder- 
standing about  that  in  the  way  the  question  was  put.  The  charter 
of  the  ship  does  not  change  its  flag.     A  change  of  owner  is  necessary. 

Mr.  Edmonds.  It  saj-s  here  in  section  6  that  all  vessels  purchased, 
chartered,  or  leased  from  the  board  shall  be  registered  or  enrolled 
under  the  laws  of  the  United  States  as  vessels  of  the  United  States 
and  entitled  to  the  benefits  and  privileges  appertaining  to  vessels  of 
the  United  States,  and  shall,  when  and  whde  employed  solely  as 
merchant  vessels,  be  in  all  respects  subject  to  all  laws,  regulations, 
and  liabilities  governing  merchant  vessels. 

Now,  you  would  not  be  liable  to  charter  an  American  vessel.  In 
time  of  stress  you  would  probably  have  to  charter  a  British  or  Ger- 
man vessel.     Under  this  law  you  could  not  charter  it,  could  you  ? 

Mr.  Chamberlain.  I  have  not  read  that  biU  with  close  attention 
to  the  details,  and  do  not  want  to  express  an  opinion  without  reading 
it  more  carefully. 

Mr.  Edmonds.  I  am  glad  you  do  not,  because  I  would  hate  for  you 
to  try  to  charter  such  ships. 

Mr.  Chamberlain.  Surely.  But  I  do  not  recall  that,  and  there 
must  be  a  misapprehension  if  Mr.  Redfield  said  so.  I  do  not  think 
he  quite  gathered  your  meaning,  because  the  change  of  flag  means  a 
change  of  ownership,  not  a  charter. 

Mr.  Edmonds.  A  British  ship  chartered  by  this  board  and  rechar- 
tered  could  not  take  American  registry,  could  it? 

Mr.  Chamberlain.  Not  by  virtue  of  the  charter.  She  might 
change  her  owner,  and  the  change  of  flag  would  go  with  the  change 
of  owner. 


202      SHIPPING  BOARD,  NAVAL  AI'XILIAEY,  AND  MERCHANT  MARINE. 

The  Chairman.  When  that  question  came  up  yesterday  I  think  I 
made  the  statement  in  the  record  that  a  foreign  vessel  chartered  by 
this  board  could  not  thereby  be  entitled  to  American  registry,  nor 
do  I  think  it  is  true,  nor  do  I  think  the  bill  contemplates  it.  I  can 
not  say  just  what  Secretary  Redfield  said  about  that,  but  I  am  quite 
sure  if  he  said  they  could,  he  did  it  inadvertently, 

Mr.  Edmonds.  The  question  was  brought  up  whether  this  bill 
absolutely  forbids  the  chartering  of  a  foreign  vessel,  because  it 
requires  that  any  vessel  chartered  be  enrolled. 

The  Chairman,  I  think  it  does.  I  think  none  but  an  American 
vessel  could  be  chartered.  If  the  committee  wants  to  liberalize  that 
they  will  have  to  do  it  by  amendment. 

Mr.  Curry.  Mr.  Chairman,  before  we  adjourn  I  would  like  to  ask 
one  or  tv/o  questions  which  are  not  exactly  pertinent  to  this  inquiry, 
but  it  will  take  but  a  moment. 

A  great  deal  of  the  tonnage  through  the  Panama  Canal  from  the 
Pacific  coast  to  the  eastern  coast  will  be  lumber  schooners  ? 

Mr.  Chamberlain.  Yes. 

Mr.  Curry.  The  lumber  that  we  manufacture  out  ther^  will  have 
to  be  sent  to  the  eastern  coast  in  competition  with  lumber  that  it 
does  not  cost  as  much  to  cut,  to  manufacture,  to  make  into  lumber, 
or  to  bring  to  the  eastern  coast  for  sale,  and  it  will  be  foreign  lumber 
that  we  will  have  to  compete  with.  Now,  I  understand  that  the 
department 

Mr.  Chamberlain.  Our  department  or  the  War  Department? 

Mr.  Curry.  Your  department  is  discussing  the  proposition  with 
the  War  Department  of  having  a  charge  on  the  deck  load  of  lumber. 
Personally,  I  do  not  think  that  would  be  fair.  That  would  be  charg- 
ing for  air  space  and  not  for  water  space.  It  is  all  right  for  them  to 
charge  for  the  tonnage  or  draft  of  the  ship,  but  to  charge  as  tonnage 
going  through  the  canal  this  lumber  that  simply  occupies  space  in 
the  air  and  would  not  displace  the  water  in  the  canal— I  do  not  think 
that  is  fair.  If  there  is  water  displacement  it  is  all  right,  but  for  air 
displacement  I  do  not  think  it  is  a  fair  charge,  and  I  think  that  your 
department  and  the  War  Department  ought  to  be  liberal  toward 
American  commerce  and  toward  American  shipping.  If  there  is 
anything  of  that  kind  I  wish  you  would  think  it  over  seriously.  I 
know  there  is  a  bill  before  Congress,  and  it  is  being  considered.  Where 
it  emanated  from  I  do  not  know, 

Mr,  Chamberlain,  That  did  not  emanate  from  our  department. 
That  is  a  matter  of  the  administration  of  the  Panama  Canal,  It  has 
been  talked  over  informally,  but  that  was  just  on  account  of  its  having 
something  to  do  with  measurements. 

The  Chairman,  I  tried  myself  to  have  the  deck  loads  of  those 
lumber  schooners  exempted  from  that  measurement. 

Mr.  Curry.  They  ought  to  be, 

(Thereupon,  at  1  o'clock  p,  m,,  the  committee  adjourned  to  meet 
Saturday,  February  12,  1916,  at  10.30  o'clock  a,  m,) 


CREATING  A  SHIPPIiNG  BOARD,  A  iNAVAL  AUXILIARY,  AND 
A  MERCHANT  MARINE. 


Committee  on  the  Merchant  Marine  and  Fisheries, 

House  of  Representatives, 

Washington,  D.  C,  Saturday,  Fehruary  12,  1916. 

The  committee  met  at  10.30  o'clock  a.  m,,  Mr.  Alexander  in  the 
chair. 

The  Chairman.  We  will  continue  the  hearing  on  the  bill  H.-  R, 
10500.  IMr.  Rosenthal,  of  Chicago,  has  consented  to  come  before 
the  committee  this  morning  and  give  us  his  views  on  the  shipping 
bill. 

STATEMENT  OF  MR.  BENJAMIN  J.  ROSENTHAL,  OF  CHICAGO. 

]\ir.  Rosenthal.  Mr.  Chairman  and  gentlemen,  yesterday  morning 
I  stopped  to  pay  my  respects  to  Judge  Alexander  on  my  way  to 
Florida,  and  the  judge  suggested  that  I  appear  before  this  com- 
mittee; so  that  if  I  am  someAvhat  unprepared  I  hope  you  will  accept 
that  as  an  apology.  If  I  had  had  more  opportunity  I  should  like  to 
have  presented  what  perhaps  would  be  a  better  argument. 

So  that  my  motive  in  appearing  here  may  not  be  misconstrued, 
I  want  to  state,  if  I  may  be  permitted,  for  just  a  moment,  that  I  am 
a  business  man,  have  been  engaged  in  business  in  Chicago  all  my 
lifetime,  and  my  interest  in  the  subject  of  merchant  marine  started 
nearly  20  years  ago.  At  that  time  a  conference  was  held  in  the  city 
of  Chicago,  and  leading  business  men  of  the  country  were  invited. 
The  culmination  of  that  conference  was  the  organization  of  the 
National  Business  League  of  America.  This  league  prepared  a 
platform,  and  one  of  the  principal  features  of  it  was  the  advocacy 
of  an  American  merchant  marine. 

The  Chairman.  Wlio  were  the  members  of  that  league,  can  you 
say? 

Mr.  Rosenthal.  They  comprise  leading  business  men,  professional 
men,  and  bankers  throughout  the  United  States.  I  will  give  you  the 
names  of  some  of  them  in  a  moment  or  two. 

The  Chairman.  Very  well. 

Mr.  Rosenthal,  In  1911  this  league  called  a  congress,  which  was 
held  in  the  Gold  Room  of  the  Congress  Hotel,  in  the  city  of  Chicago 
in  December,  1911. 

At  this  congress  some  of  the  leading  business  and  profession?]  men 
of  the  country  were  present.  A  large  body  attended.  Different 
plans  were  presented  for  the  establishment  of  a  merchant  marine  in 
connection  with  other  projects,  which  are  enumerated  in  this  plat- 
form that  I  have  before  me. 

203 


204     SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

The  congress,  after  listening  carefully  to  tlie  different  plans  sug- 

fested,  adjourned  after  appointing  a  committee  of  20  of  the  leading 
usiness  men  of  the  country. 
Now,  if  I  may  be  permitted,  I  will  give  you  the  personnel  of  the 
resolutions    committee    of    the    National    Business    Congress,    held 
December  13  to  15,  1911. 

George  W.  Sheldon,  Chicago,  president  G.  W.  Sheldon  &  Co., 
customhouse  brokers. 

Henry  M.  Wallis,  president  J.  I.  Case  Plow  Works,  Racine, 
Wis. 

Edward  J.  Nally,  vice  president  (now  president)  Postal  Tele- 
graph &  Cable  Co.,  New  York. 

Alfred   H.   Mulliken,    president   Pettibone,   MuUiken   &  Co., 
railway  supplies,  Chicago. 

Frederic  E.  Boothby,  president  chamber  of  commerce,  Port- 
land, Me. 

Frederick  S.  Fish,  president  Studebaker  Corporation,  South 
Bend,  Ind. 

George  M.   Reyiiolds,   president   Continental  &  Commercial 
National  Bank,  Chicago. 

Silas  H.  Bumham,  president  First  National  Bank,  Lincoln, 
Nebr. 

John  Kirby,  jr.,  president  National  Association  of  Manufac- 
turers; president  Dayton  Manufacturing  Co.,  Dayton,  Ohio. 

Edwin  Chamberlain,  vice  president  San  Antonio  Loan  &  Trust 
Co.,  railway  and  general  business  man,  San  Antonio,  Tex. 

George  R.  Brown,  secretary  board  of  trade,  Little  Rock,  Ark. 
Arthur    H.    Devers,    Closset    &    Devers,    wholesale    grocers, 
Portland,  Oreg. 

William  H.  Parlin,  president  Parlin  &  Orendorff  Co.,  agricul- 
tural implements.  Canton,  111. 

R.  H.  Downman,  president  Bowie  and  other  lumber  com- 
panies. New  Orleans,  La. 

Albert  M.  Marshall,  president  A.  M.  Marshall  &  Co.,  wholesale 
hardware,  Duluth,  Minn. 

WilUam    P.    Ketcham,    lumber    merchant    and    real    estate, 
Seattle,  Wash. 

Philetus   W.    Gates,    president   Hanna   Engineering   Works, 
fonner  vice  president  Allis-Chalmers  Co.,  Chicago. 

Robert  J.  Lowry,  president  Lowry  National  Bank,  Atlanta, 
Ga. 
£    George   H.    Barbour,    vice    president   Michigan    Stove    Co., 
Detroit. 

Charles  B.  Booth,  president  automobile  company,  real  estate, 
and  general  business,  Los  Angeles,  Cal. 
I  dare  say,  gentlemen,  that  this  is  as  representative  body  of  business 
men  as  you  will  find  anywhere  in  the  Unite  States. 

This  committee,  after  carefidly  considering  the  different  plans 
suggested,  met  in  the  Blackstone  Hotel,  in  Chicago,  six  months  after 
this  congress  was  held.  In  the  meanwhile  they  had  investigated  as 
carefully  as  they  could  different  plans  suggested  for  the  upbuilding 
of  the  merchant  marine.  This  is  the  resolution  which  they  finally 
adopted : 


II 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      205 

Resolved,  That  as  an  effective  means  for  the  creation  of  an  American  merchant 
marine  a  law  be  enacted  empowering  tlie  Government  to  construct  or  purchase  trans- 
ports for  the  slups  of  the  United  States  Navy,  to  be  operated  by  naval  seamen  as 
merchant  vessels  in  time  of  peace  and  as  auxiliaries  of  the  Navy  in  time  of  war. 

This,  you  will  see,  gentlemen,  without  any  equivocation,  is  a 
straight  out-and-out  Government  owned  and  operated  merchant 
marine,  in  so  far  as  it  would  apply,  at  least  for  enough  ships  fo  prop- 
erly augment  the  Navy  as  naval  auxiliaries. 

That  is  the  platform  upon  which  the  National  Business  League  of 
America  stood. 

Mr.  Lazaro.  What  year  ? 

Mr.  Rosenthal.  1911,  mark  you,  and  1912,  long  before  the  war 
started. 

Mr.  Greene.  May  I  ask  you  a  question? 

Mr.  Rosenthal.  Certainly. 

Mr.  Greene.  Did  your  committee  ever  send  a  representative  to 
Washington  to  appear  before  this  committee  ? 

^Mr.  Rosenthal.  Yes,  sir;  our  committee  appeared  before  commit- 
tees in  Washington  very  frequently. 

Mr.  Greene.  Before  what  committee  ? 

Mr.  Rosenthal.  I  imagine  before  this  very  committee.  I  never 
appeared  before  them,  but  I  appeared  before  a  committee  on  the 
consular  reform  bill. 

Mr.  Greene.  I  notice  nearly  all  the  names  you  read  are  names  of 
men  located  in  Chicago  or  west  of  Chicago. 

The  Chairman.  They  may  have  appeared  before  the  Senate  Com- 
mittee on  Naval  Affairs  when  Mr.  Weeks  of  Massachusetts  introduced 
his  Government-owned  naval  auxiliary  merchant-marine  bill. 

Mr.  Greene.  That  might  be;  but  I  never  knew  of  them  appearing 
before  this  committee.  I  see  there  are  no  representatives  on  that 
list  from  east  of  Chicago,  and  there  is  quite  considerable  merchant 
marine  on  the  Atlantic  coast  and  quite  a  large  interest  in  an  American 
merchant  marine  in  the  Eastern  States  as  far  as  I  have  been  able  to 
observe. 

The  Chairman.  The  origmal  proposition  for  a  merchant  marine 
was  introduced  by  Mi'.  Weeks,  of  Massachusetts,  when  he  proposed 
that  the  Government  take  over  naval  auxiliaries  and  operate  them 
as  a  part  of  our  merchant  marine. 

Mr.  Greene.  That  was  better  than  nothing,  of  course. 

Mr.  Rosenthal.  I  want  to  say  in  passing  that  what  I  shall  now 
read  is  part  of  an  argument  that  I  made  before  the  National  Business 
League.     I  will  just  refer  to  these  few  lines. 

In  case  of  war  between  any  of  the  great  shipping  nations,  instead  of  having  our 
conmierce  paralyzed  as  we  would  have  under  present  conditions,  on  account  of  inability 
to  secure  ships  for  our  commerce,  we  would  go  right  on  attending  to  our  own  business 
and  shipping  the  exports  of  our  own  nation  in  our  own  bottoms. 

Now,  gentlemen,  if  I  was  in  favor  of  a  Government-owned  merchant 
marine  in  1911  I  certamly  have  seen  nothing  to  change  my  view- 
point in  1915  and  1916. 

I  want  to  call  attention  to  this,  too,  before  I  go  on. 

There  appeared,  I  noticed  in  the  press,  a  gentleman  representing 
the  National  Chamber  of  Commerce  of  Boston,  and  I  understand  his 
statement  to  this  committee  was  that  he  represented  some  several 

32910—16 14 


206     SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

hundred  organizations,  and  these  organizations  had  voted  against 
any  form  of  government  ownership  and  had  voted  hi  favor  of  subsidy. 

The  Chairman,  That  was  IVIr.  Douglas,  of  New  York. 

Mr.  EosENTiiAL.  Up  to  January  1,  gentlemen,  when  I  retired  from 
the  board,  I  was  a  director  of  the  Association  of  Commerce  of  Chi- ' 
cago.  I  appeared  before  this  association  on  three  or  four  occasions 
to  express  my  views  and  present  them  on  the  subject  of  the  merchant 
marine.  I  have  here  before  me  a  copy  of  the  last  address,  which  I 
delivered  on  Friday,  December  17,  1913.  I  make  the  statement 
now  to  you  gentlemen  without  fear  of  honest  contradiction,  that  this 
association  of  commerce  which  comprises  over  4,000  members,  would 
vote  75  per  cent  for  this  Alexander  bill  if  it  was  put  before  them  for 
a  vote. 

Now,  I  will  tell  you  gentlemen  exactly  how  this  vote  was  arrived 
at,  and  to  make  assurance  doubly  sure,  I  will  mention  the  fact  that 
I  happened  to  meet  Mr.  Nickerson,  who  is  a  member  of  the  association 
of  commerce,  and  was  one  of  the  subcommittee  of  two.  I  met  him  last 
night  at  the  New  Willard  Hotel.  He  was  here  attending  this  con- 
ference of  the  United  States  Chamber  of  Commerce.  I  asked  him, 
just  to  be  sure,  just  how  that  vote  was  arrived  at,  and  I  will  explain 
just  exactly  what  he  said,  and  that  was  my  understanding.  The 
request  came  to  the  executive  committee;  the  exceutive  committee 
referred  it  to  a  committee  of  two.  Mr.  Nickerson  was  one  of  that 
committee  and  Mr.  Buchanan  was  the  other.  That  committee  of 
two  had  probably  never  even  read  the  Alexander  bill  and  did  not 
know,  perhaps,  all  of  the  provisions  of  it.  This  committee  reported 
that  they  were  not  in  favor  of  Government  ownership,  but  in  favor  of 
some  form  of  subsidy,  and  the  executive  committee  indorsed  this 
action  of  the  committee  of  two,  and  it  was  sent  to  the  National 
Association  of  Commerce,  and  in  that  way  the  National  Association 
of  Commerce  attempts  to  bind  an  organization  of  4,000  men. 

The  Chairman.  I  think  that  was  the  process  m  Portland,  Oreg.,  too. 

Mr.  Rosenthal.  But  I  can  only  speak  authoritatively  for  this 
organization,  because  I  was  invited  to  appear  before  this  committee 
of  two,  which  I  did. 

Mr.  Greene.  Wliat  association  are  you  speaking  of  ? 

Mr.  Rosenthal.  The  Association  of  Commerce  of  Chicago,  which 
has  a  membership  of  4,000  business  men  in  Chicago.  Only  this  morn- 
ing I  took  breakfast  with  the  president  of  that  organization  and  told 
him  how  unfair  it  was  to  attempt  to  bind  the  association  of  commerce 
by  the  recommendations  practically  of  two  men,  and  he  said  it  was 
unfair,  but  he  did  not  know  how  else  they  could  arrive  -at  it.  He 
said  they  received  these  notices  from  the  association  of  commerce, 
and  that  they  had  to  have  a  vote  by  a  certain  date.  He  said  it  was 
impossible  to  get  a  vote  of  the  members  and  the  best  thing  they  could 
do  was  to  refer  it  to  a  committee,  and  for  this  committee  to  make  a 
report. 

Now,  gentlemen,  there  is  nothing  in  the  Alexander  bill  that  need 
frighten  the  most  timid  or  conservative  citizen  of  the  United  States. 
Perhaps  my  plan  may  frighten  some,  but  the  Alexander  bill  certainly 
Deed  frighten  no  one. 

Now,  what  are  the  provisions  of  the  Alexander  bill?  You  are 
familiar  with  them.     I  have  made  an  analvsis  of  them. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE,      207 

First,  the  bill  calls  for  an  appropriation.  Then  the  appointment 
of  a  commission.  And  in  passing  let  me  say  this — and  I  spoke  to 
the  Secretary  of  the  Treasury  and  to  the  Secretar}^  of  Commerce  yes- 
terday about  this — ^I  do  not  consider  the  salary  of  $10,000  a  year 
adequate.  If  you  want  to  get  the  biggest  uk  n,  the  men  you  should 
get,  to  serve  on  this  important  commission,  $12,000  a  year  should  be 
the  minimum  salary  paid.  I  only  stop  at  S12,000  because  a  Cabinet 
officer  receives  $12,000,  and  perhaps  it  would  not  be  right  to  pay  any 
commission  more  than  a  Cabinet  officer  receives. 

You  are  familiar  with  its  powers:  I  will  not  go  over  that  with  you. 

You  are  familiar  with  the  clause  that  permits  the  Government  to 
sell  or  lease  these  ships  so  that  there  will  be  no  Government  o^vncrship 
at  all,  much  to  my  regret,  if  people  are  willing  to  purchase  them  or 
lease  them. 

Now,  in  connection  with  leasing,  you  have  heard  so  much  talk  about 
what  England  does  for  its  Navy.  As  a  matter  of  fact  the  only  thing 
that  England  does  for  its  Navy  and  has  done  for  years  is  to  pay  for 
the  carr3dng  of  its  mail.  It  also  loaned  for  the  building  of  these 
two  great  big  ships — because  it  wanted  to  have  the  biggest  ships 
afloat— some  money  at  a   low  rate  of  interest. 

Now,  this  board,  under  the  Alexander  bill,  ^viU  do  much  more  than 
that.  It  does  not  require  the  investment  of  a  penny.  It  says  to  the 
man  who  wants  to  operate  a  ship,  "Pay  us  a  fair  return  on  the  capital 
the  Government  has  invested;  we  do  not  require  you  to  invest  a 
penny,  and  we  will  lease  you  the  ships" — certainly  a  much  fairer 
proposition  that  any  foreign  Government  offers. 

The  Government  also  has  the  right  to  seize  these  ships  in  time  of 
war.  There  is  no  man  around  this  table  who  does  not  want  that  right 
given.  It  has  the  right  to  condemn  these  ships  if  they  are  too  old. 
Everyone  wants  that,  of  course. 

It  has  the  right  to  transfer  any  of  its  equipment  that  it  now  has 
that  is  suitable  for  merchant  marine  purposes  to  this  commission  to 
be  used  for  transportation  purposes. 

Mr.  LoLT).  Wliat  ships  are  those  ? 

Mr.  Rosenthal.  The  ships  that  we  now  have. 

It  requires  that  all  vessels  so  transferred  shall  be  registered  under 
American  registry  and  shall  be  under  all  laws,  regulations,  and  ha- 
bilities  governing  merchant  vessels.  SureW  everyone  wants  that. 
Now,  gentlemen,  it  especially  stipulates  that  none  of  the  ships  now 
in  American  registry  shall  be  sold  or  transferred  to  foreign  owner- 
ship. Is  there  a  man  in  this  room  or  is  there  a  citizen  in  the  United 
States  at  this  moment  who  is  not  a  shipowner  or  is  not  interested  in 
ships  that  does  not  want  to  see  that  part  of  the  law  passed  as  quickly 
as  possible  ?  Over  800,000  tons  of  ships  formerly  saihng  under  for- 
eign flags  were  voluntarily  transferred,  under  the  recent  registry  law, 
to  American  registry.  They  have  had  the  advantage  of  the  pro- 
tection of  the  American  flag.  The}^  have  had  the  advantage  of  the 
insurance  that  this  Nation  has  given  them — the  marine  insurance,  I 
refer  to — ^and  you  know  if  this  Government  had  not  taken  action 
as  it  did  to  insure  them  we  would  have  had  no  shipping  at  aU, 
They  have  had  the  advantage  of  the  most  outrageously  high  rates 
that  have  ever  been  perpetrated  on  the  American  Nation  or  any 
other  nation. 


208      SHIPPING  BOARD,  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE. 


i. 


And  now,  forsooth,  are  you  going  to  let  them,  as  soon  as  the  war 
is  over,  just  because  they  can  operate  for  a  httle  less  in  wages,  are 
you  going  to  let  them  go  back  to  a  foreign  flag?  I  say  no.  And 
there  is  not  a  Member  of  Congress  who  would  dare  go  before  his  con- 
stituents and  ask  for  reelection  if  he  permitted  a  single  ship  that 
voluntarily  accepted  American  registry  to  go  back  to  foreign  owner- 
ship after  taking  advantage  of  the  advantages  that  this  Government 
has  given  them. 

The  board  may  also  regulate  rates  and  regulate  the  operation  of 
common  carriers  by  water.  Now,  we  have  all  inveighed  against  the 
discrimination  of  the  foreign  shipowner  toward  the  American  shipper. 
This  bill  gives  the  right  to  regulate  that,  and  if  you  will  read  the 
report  of  the  committee  of  Congress— it  covers  some  600  pages  (I 
think  your  chairman  was  chairman  of  that  committee,  were  you  not, 
l^lr.  Chairman,  the  committee  that  investigated  shipping  combina- 
tions ?)  you  will  probably  agree  with  me  that  regulation  is  quite 
necessary. 

The  Chairman.  Yes. 

Mr.  Rosenthal.  And  if  you  will  read  the  admissions,  their  own 
admissions,  these  owners  oi  foreign  ships,  when  they  admitted  this 
discrimination  against  the  American  shipper,  they  admitted  these 
rebates;  there  is  not  one  of  you  who  will  not  want  that  clause  in  this 
bill. 

Now,  then,  it  also  gives  us  the  right  to  establish  preferential  rates. 
If  you  have  listened  to  Mr.  Farrell,  the  president  of  the  United  States 
Steel  Co.,  if  you  have  listened  to  any  of  these  financial  men,  talk  about 
Germany  and  the  benefits  that  the  Government  gives  to  its  manufac- 
turers, through  some  cohesive  organization,  an  arrangement  between 
the  Government  and  manufacturer  so  that  preferential  rates  are 
given,  so  that  the  manufacturer  in  some  small  point  in  Germany  can 
ship  his  goods  to  America  on  a  through  route,  at  a  preferential  rate, 
you  would  be  very  glad  then  to  offer  the  American  manufacturer 
some  of  these  benefits  also.  Many  have  complained  because  we  don't 
give  preferential  rates  to  them  in  this  country.  We  would  give  it  to 
them  under  this  bill  if  it  could  be  arranged  with  the  Interstate  Com- 
merce Commission  and  the  railroads,  and  I  think  the  railroads  would 
be  glad  to  join  in  that. 

Now,  it  also  provides  that  the  crews  on  these  ships  can  become 
members  of  the  Naval  Reserve.  That  is  just  what  we  want.  Instead 
of  building  a  naval  ship  and  sticking  the  men  on  there  and  paying 
them  the  wages  that  the  Government  pays  them  and  letting  them 
stay  on  the  ship  all  the  year,  let  them  enter  this  merchant  service  and 
be  members  of  the  Naval  Reserve.  But  I  would  go  further  than  that, 
gentlemen.  I  would  put  some  clause  in  this  bill  whereby  they  would 
be  compelled  to  serve  at  least  one  or  two  weeks  in  each  year  on  a  naval 
vessel,  so  that  they  would  be  under  the  discipline  of  the  United  States 
Navy  and  that  they  would  be  familiar  with  the  naval  ships  as  well 
as  the  merchant  ships. 

Now,  the  question  of  thi-ough  routes.  No  one  would  argue,  I 
thmk,  for  a  moment  that  it  would  not  be  very  advisable  to  have 
that  incorporated  m  the  bill. 

Now,  here  is  another  important  point.  You  hav(>  all  heard  the  jSI 
cry.  I  have  gone  all  around  the  countr}''  and  have  addressed  different  »l 
bodies,  and  they  all  say,    'Well,  the  Government  binds  us  hand  and 


t 


SHIPPING  BOARD,  NAVAL  AUXILL4KY,  AND  MEECHANT  MARINE.      209 

foot  with  morchant-marine  laws  that  are  unfau";  if  the  Government 
would  amend  these  merchant-marine  laws  we  would  build  up  American 
6lii])ping."  This  biU  gives  the  commission  just  that  right,  and  I 
would  make  it  a  little  more  far-reachmg.  It  just  says  that  it  can 
investigate  the  laws  of  the  United  States  in  reference  to  common 
carriers  in  marine  transportation.  I  would  give  it  the  right  and 
make  it  the  duty  to  investigiitc  the  laws  of  lort>ign  countries  too, 
and  theh  regulations,  so  that  they  will  have  before  thorn  a  perfect 
resume  of  the  laws  not  onlj'  of  the  United  States  but  of  foreign  coun- 
tries in  relation  to  marine  transportation;  and  if  it  is  true  our  laws 
are  inifiuitous,  if  it  is  true  they  hamper  American  shippmg,  then 
this  commission  would  be  just  the  one  to  remedy  that.  Is  there 
anybody  who  objects  to  that  ? 

Xow,  then,  there  is  a  clause  that  provides  that  the  commission 
should  have  the  ])OWei*s  that  the  Interstate  Commerce  Commission 
has — only  so  far,  of  course,  as  it  rel  ites  to  water  carriers — and  then 
it  also  re([uires  after  eTanuary  1,  1017,  that  uU  ships  engaged  in  for- 
eign trade  sh;ill  be  subji'ct  to  a  license.  Is  it  not  right  that  every 
ship  that  comes  into  this  <  ountry,  that  takes  advant;  ge  of  or  has  the 
right  to  the  advantages  that  this  Government  offers,  should  be  under 
a  license  from  this  Government,  and  if  it  does  not  act  ])ro]ierly  that 
we  should  revoke  its  license  ?  We  have  agreed  that  we  have  not 
control  over  foreign  shi]>s,  and" this  would  give  us  control  over  them 
in  so  far  as  rates  and  fair  regulations  are  concerned. 

Now,  is  there  anytlung  in  this  biU,  gentlemen,  as  I  said,  that  need 
frighten  the  most  timid,  the  most  conservative  citizen  of  the  United 
States?  Is  there  anything  in  this  bill  that  anyone  could  rightfully 
condemn  ? 

Now,  you  have  heard  so  much  talk.  It  has  been  shot  at  me  very 
often,  well,  there  is  a  difference  in  the  labor  cost  in  the  operation  of 
American  ships  as  against  the  cost  of  operating  a  foreign  ship.  I  will 
grant  you  there  is  suc-h  a  difference,  but,  gentlemen,  there  was  also  a 
aifference — perhaps  not  quite  so  marked,  but  still  a  difference — in 
1855  when  this  country  had  the  greatest  amount  of  shipping  of  any 
nation  in  the  world.  And  yet  there  was  no  one  objected  and  Amer- 
ican commerce  on  the  high  seas  went  untrammelled,  and  did  not  make 
any  complaint. 

Let  me  call  your  attention  to  the  lake  rate.  The  seamen  on  the 
Lakes  receive  a  much  higher  wage  in  proportion  than  those  on  the 
ships  under  foreign  governments.  Yet  we  make  lake  rates  out  west 
much  lo  ver  than  are  made  by  some  of  the  foreign  carriers  and  yet  we 
pay  higher  wages. 

Now  take  inio  consideration  also  this  fact.  The  foreign  coimtries 
have  aU  their  ships  built.  They  could  not  change  these  types  of 
ships.  They  would  not  burn  them  up,  would  they?  They  would 
have  to  go  on  with  these  ships,  of  com'se  addmg  new  ships  from  time 
to  time. 

Now,  this  country  would  build  their  new  ships  with  the  new  Deisel 
engines;  they  would  burn  oil.  They  would  standardize  shipbuilding, 
just  as  they  have  standardized  the  manufacture  of  automobiles. 
That  is  why  ships  have  cost  so  much  more ;  each  ship  has  been  a  dif- 
ferent pattern.  In  the  automobile  industry — this  concern  did  not 
pay  me  for  advertising  them  and  so  I  will  not  mention  any  names — 
a  concern  I  have  in  mind  pays  $5  a  day  to  common  labor  as  against  5 


210      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

francs  for  the  same  kind  of  labor  in  France,  and  5  marks  for  the  same 
kind  of  Libor  hi  Germany.  They  could  pay  $10  a  day  and  still  make 
a  fortune.  But  they  have  standardized  the  manufactm-e  of  auto- 
mobiles, and  so  have  other  manufacturers  in  this  country. 

And  so  if  we  give  it  out  to  the  country  that  we  are  in  earnest  about 
this  shipping,  that  we  are  going  to  build  up  a  merchant  marine,  you 
will  fuid  capital  coming  forward  quickl)',  and  it  wiU  build  sliips  as 
cheap  as  they  build  them  abroad.  Why  should  it  not?  We  have 
the  materials  here.  We  produce  iron  and  steel  and  everything  that 
goes  into  the  building  of  a  ship  just  as  abundantly  as  they  do  abroad, 
m  fact,  we  ship  these  materials  abroad  and  sell  m  competition  abroad. 

I  will  say  nothing  about  American  ingenuity  in  manufacturing. 
You  know  as  much  about  that  as  I  do. 

I  want  to  say  this  in  passing.  In  my  judgment  if  this  Alexander 
bill  is  passed  we  will  have  more  applications  for  ships  than  we  can 
possibly  supply.  I  hope  from  the  bottom  of  my  heart  that  we  wiU 
not.  I  hope  we  will  have  to  operate  these  ships  ourselves;  but 
do  not  be  uneasy  about  the  people  not  coming  forth  and  asking  for 
the  lease  of  these  ships. 

I  want  to  point  this  out  to  you,  too.  In  1912,  you  are  probably 
familiar  with  this  fact,  the  Pan  American  Line  was  organized  to 
carry  commerce  from  New  Orleans,  and  Mobile  to  South  America. 
The  ships  of  that  line  left  with  full  cargoes.  I  believe  the  governor 
was  there,  and  the  mayor,  and  leading  citizens,  to  wish  them  bon 
voyage.  They  were  paying  American  wages  "and  were  glad  to  pay 
them.  They  adhered  to  the  American  standards  of  living.  They 
went  do\\Ti  there,  and  what  happened  ?  They  could  not  get  a  pound 
of  cargo  for  the  return  voyage.     Why  not?     Because  the  tnist  said: 

You  will  lose  your  rebate,  Mr.  Shipper,  if  you  give  them  any  carj^o  to  go  back  to 
America,  because  you  have  a^raed  to  ship  only  on  our  boats;  and,  furtlipr,  you  have 
agreed  to  ship  all  your  coffee  on  our  boats,  and  we  will  not  carry  your  coffee  to  England 
if  you  give  tliese  ships  any  cargo. 

And  so  these  boats  had  to  come  back  to  America  without  cargo 
and  the  company  was  disbanded. 

The  Chairman.  That  is  the  history  of  that  venture,  surely. 

Mr.  Rosenthal.  This  is  all  history.  And  I  hope,  gentlemen,  that 
I  am  not  misstating  anything.  I  have  tried  to  be  very  careful  check- 
ing up  any  statements  that  I  make  here,  and  at  my  own  expense  I 
keep  employed  an  organization  for  this  work,  and  I  liave  very  careful 
people  about  me. 

Now,  just  one  more  question  I  want  to  revert  to,  the  question  of 
subsidy.  Why,  gentlemen,  from  1868,  from  the  time  of  the  nomina- 
tion of  Grant  and  Seymour,  you  have  heard  of  subsidy  in  every  Con- 
fress  from  that  time  on.  There  have  been  50  sessions  of  Congress, 
think,  during  that  time.  I  dare  say  that  there  has  not  been  a  session 
where  there  has  not  been  a  subsidy  bill  introduced. 

The  Nation  will  not  stand  for  a  subsidy.  If  we  could  not  get  a 
merchant  marine  in  any  other  way,  I  believe  I  would  even  stand  for  a 
subsidy,  but  a  subsidy  is  out  of  the  question.  It  is  un-American, 
it  shows  favoritism.  If  you  give  a  subsidy  to  the  shipowner,  forsooth, 
you  say  because  we  can  take  his  ships  in  time  of  war,  then  you  must 
give  it  to  the  munition  manufacturer ;  you  must  give  it  to  the  manu- 
facturer of  anything  that  the  Government  uses  in  time  of  war.  You 
must  give  it  to  the  farmer,  because,  as  Napoleon  said,  "An  Army 


SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      211 

fights  best  on  it»  belly,"  and  so  the  Government  is  dependent  on  the 
farmer  above  all  others  in  time  of  war.  And  so  it  would  be  out  of  the 
question  to  give  a  subsidy  to  one  class  unless  you  gave  it  to  all. 

And  even  if  you  gave  a  subsidy — you  are  giving  subsidies  now,  and 
what  has  happened.  Every  subsidized  American  ship  to-day  is  a 
member  of  the  shipping  trust.  There  is  no  question  about  that, 
is  there,  Mr.  Chairman  ? 

The  Chairman.  Our  investigation  of  the  so-called  Shipping  Trust 
showed  that  the  only  ships  we  have  in  the  trade  between  the  United 
States  and  Europe  belonged  to  the  International  Mercantile  Marine 
Co. 

Mr.  Rosenthal.  Now,  if  you  subsidize  a  ship  it  has  to  join  the 
trust  or  fight  the  trust.  If  it  joins  the  trust  then  it  is  not  independent, 
and  we  have  not  accomphshed  anything  except  that  we  can  get  it 
back  in  case  of  war.  And  if  it  did  not  join  the  trust,  what  would 
happen  ?  It  could  not  get  a  cargo  and  it  would  come  back  and  say, 
"Gentlemen,  you  must  give  me  more  subsidy  because  the  trust  has 
cut  the  rate,  the  trust  has  put  its  fighting  ships  alongside  of  mine, 
and  I  must  have  more  subsidy,"  and  so  where  would  this  end?  So 
that  I  say  to  you,  gentlemen,  that  you  must  not  give  a  subsidy.  No 
one  must  think  of  giving  a  subsidy. 

Now,  you  say,  what  would  happen  if  we  received  no  apphcations 
for  ships  ?  Why  the  simplest  thing  in  the  world  would  happen,  and, 
as  I  said,  I  would  be  happy  if  it  did — wh}^  the  Government  would 
simply  operate  those  ships.  The  Government  would  not  discourage 
capital,  but  it  would  encourage  capital;  the  Government  would  say, 
"Go  on  and  build  ships  and  operate  them,  we  will  put  these  ships  of 
ours  on  new  routes,  we  will  pioneer."  If  any  erf  you  gentlemen' 
went  into  the  taxicab  business  to-day,  you  would  put  your  taxicabs 
in  the  center  of  the  city  and  not  in  the  suburbs.  And  so  if  capital 
comes  into  the  shipping  business  it  is  going  to  take  the  routes  that 
are  most  profitable,  and  the  Government  would  put  its  ships  on  trade 
routes  that  would  open  up  new  commerce,  develop  new  trade  for 
the  business  men  of  the  country. 

Now,  there  appears  to  be  some  fear  of  putting  the  Government 
into  the  shipping  business.  Personally,  I  have  no  fear  of  that. 
First,  we  would  give  private  capital  a  chance.  If  it  does  not  avail 
itself  of  the  chance  then  I  think  it  would  be  proper  for  us  to  go  into 
the  shipping  business.  Did  anyone  object  to  the  Government  going 
into  the  marine  insurance  business  ?  Did  these  very  gentlemen  who 
are  objecting  now  object  to  the  Government  msuring  their  cargoes, 
and  stabilizing  the  insurance  rate  ?  The  Government  would  stabihze 
the  carrying  rate  in  the  same  way. 

Here  is  a  copy  of  the  book  which  I  pubhshed  at  my  expense  and 
which  I  distributed  throughout  the  country.  It  is  entitled  "The 
need  of  the  hour"  An  American  Merchant  Marme. 

I  think  every  Member  of  Congress  has  had  a  copy  of  it.  If  any 
Member  has  not  had  one,  I  would  be  glad  to  give  him  a  copy. 

I  am  in  business  and  am  a  business  man.  I  am  not  interested 
financially  411  shipping  or  anything  hke  that.  I  think  I  am  in  a  posi- 
tion to  get  the  true  sentiment  of  the  business  men  of  the  country. 
But  not  only  the  business  men,  the  whole  nation  is  aroused  to  the 
fact  that  we  must  have  a  merchant  marine.  It  ought  to  be  American 
manned,  it  ought  to  be  American  built,  and  it  ought  to  sail  under  the 


212      SHIPPING  BOAED,  NAVAL  AUXILIAEY,  AND  MEKCHANT  MARINE. 

American  flag,  and  I  appeal  to  you  as  business  men,  that  you  pass 
this  Alexander  bill. 

Mr.  Greene.  May  I  ask  your  business  ? 

Mr.  Rosenthal.  I  am  engaged  in  a  number  of  enterprises.  I  am 
interested  in  two  large  mail-order  houses  in  Chicago.  I  am  interested 
in  a  chain  of  millmery  houses  throughout  the  country,  and  am 
interested  in  the  drug  business,  also  restaurants,  also  pubhshing 
business. 

Mr.  Greene.  What  are  they? 

Mr.  Rosenthal.  Which? 

Mr.  Greene.  These  different  companies  that  you  are  interested  in? 

Mr.  Rosenthal.  The  Chicago  Mail  Order  Co.,  the  Philipsborn 
Outer  Garment  Co.,  also  a  chain  of  millinery  interests,  with  depart- 
ments throughout  the  United  States.  I  am  also  interested  in  the 
drug  business.  We  are  publishers  of  magazines.  I  am  interested 
very  largely  in  real  estate  and  banking  and  in  the  wholesale  millinery 
business.  And  I  have  some  other  interests.  I  hoped  that  that 
question  would  not  be  asked  me.  I  am  not  interested  in  any  way 
in  the  shipping  business. 

The  Chairman.  If  there  is  nothing  further  from  ^Ir.  Rosenthal, 
these  gentlemen  are  waiting.  Mr.  Hardy  is  chairman  of  the  sub- 
committee and  he  will  conduct  the  hearing  in  which  the  ferryboat 
companies  are  interested. 

I  may  state  that  the  next  hearing  on  the  shipping  bill  will  be 
Wednesday  morning  at  10. .30  o'clock,  and  Secretary  McAdoo  and 
possibly  others  will  be  here. 

For  the  benefit  of  the  members  of  the  cominittee  who  may  have 
interests  they  w&nt  heard  on  the  shipping  bill,  I  would  like  to  have 
them  notify  me  as  early  as  possible,  because  while  I  am  going  to  give 
opportunity  for  everyone  to  be  heard  as  far  as  possible,  we  are  not 
going  to  continue  these  hearings  indefinitelv,  and  we  want  to  utilize 
the  time.  I  make  that  as  a  suggestion.  I'lease  inform  me  of  any 
one  whom  you  would  like  to  have  heard,  and  we  will  arrange  to  have 
the  hearing  as  early  as  we  can,  with  the  view  of  giving  every  one  a 
chance. 

Mr.  Hardy  will  now  take  the  chair,  and  his  subcommittee  will  have 
their  hearing. 


Committee  on  the  Merchant  Marine  and  Fisheries, 

House  of  Representatives, 

Wednesday,  February  16,  1916. 

The  committee  met  at  10.30  o'clock  a.  m.,  Hon.  Joshua  W.  Alex- 
ander (chairman)  presiding. 

The  Chairman.  I  have  a  message  from  Secretary  McAdoo  saying 
his  engagements  are  such  that  he  can  not  get  here  this  morning,  but 
that  he  will  be  here  to-morrow. 

I  also  have  a  letter  from  Secretary  Wilson  to  the  effect  that  he 
would  like  to  appear  to-morrow  morning. 

Admiral  Benson  was  to  be  here  this  morning  and  we  will  hear  from 
him.  First,  however,  I  have  received  certain  communications  which 
I  would  like  to  offer  for  the  record,  if  there  is  no  objection.  The  first 
is  a  communication  from  the  president  of  the  Port  of  Seattle,  Wash., 
going  into  discriminations  against  the  publicly  owned  water  front 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      213 

terminals  of  Seattle.  As  the  committee  doubtless  know,  they  have 
municipally  o%vned  terminals  there,  or  docks,  which  cost  several 
millions  of  dollars,  and  the  steamship  companies  which  are  reputed 
to  be  in  combinations  will  not  use  those  terminals,  it  is  alleged,  for 
unloading  or  receiving  freight.  And  that  is  a  feature  that  I  can 
assure  the  gentlemen  from  Washington,  as  well  as  the  other  members 
of  the  committee,  mil  be  relieved  if  the  provisions  of  this  bill  relating 
to  Government  supervision  and  control  of  water-borne  traffic  become 
law. 

Mr.  Greene.  A  man  told  me  that  Capt.  Dollar  stated  the  other 
day  he  was  going  to  move  over  to  Vancouver  and  there  would  be 
room  for  everybody  then. 

The  Chairman.  They  have  splendid  docks  at  Seattle  and  I  doubt 
if  there  are  as  fine  anywhere  else  in  the  United  States.  Do  you  know 
what  they  cost?  '~^ 

Mr.  Hadley.  I  do  not  know  exactly;  several  millions.  I  think  it 
is  three  or  four  millions.  I  was  over  them  last  summer  and  I  heard 
the  statement  made,  but  I  do  not  recall  the  amount  now. 

(The  letter  above  referred  to  is  as  follows:) 

Department  of  Commerce, 

Office  of  the  Secretary, 
Washington,  December  SO,  1915. 
My  Dear  Judge  Alexander:  Your  attention  is  respectfully  directed  to  the  inclosed 
communication  from  the  president  of  the  port  of  Seattle,  Wash.,  and  to  the  case  of 
discrimination  therein  shown  against  the  publicly  owned  water-front  terniinals  of 
Seattle.  You  will  note  that  the  president  of  the  port  asks  that  proper  legislation  be 
recommended  to  c(»ver  such  matters.  The  subject  is  respectfully  recommended  to 
your  thoughtful  consideration. 

May  I  venture  to  point  out  in  this  connection  that  the  draft  of  a  proposed  shipping 
measure  which  has  already  been  sent  you  contains  a  provision  that  the  shipping 
board  thereby  created  should  have  the  power  to  license  vessels  using  American  porta 
and  to  determine  the  conditions  under  which  such  licenses  should  be  issued.  This 
provision,  cither  in  the  form  in  which  it  was  submitted  to  you  or  in  a  form  which  you 
no  doubt  can  readily  suggest,  could,  I  presiime,  be  made  to  cover  cases  of  this  kind. 
Yours,  very  truly, 

William  C.  Redfield,  Secretary. 
Hon.  J.  W.  Alexander, 

Chairman  Committee  on  Merchant  Marine  and  Fisheries. 

House  of  Representatives,  Washington,  D.  C. 


[Port  of  Seattle.— Commissioners:  Robert  Bridges,  president;  C.  E.  Remsberg,  secretary;  Gen.  H.  M. 
Chittenden,  member  American  Society  Civil  Engineers.  Executive  stafE:  J.  R.  West,  chief  engineer; 
C.  J.  France,  counsel;  Hamilton  Higday,  assistant  secretary  and  traffic  manager;  W.  S.  Lincoln,  auditor. 
General  offices,  Bell  Street  warehouse.] 

Seattle,  Wash.,  December  10,  1915. 
Hon.  William  0.  Redfield, 

Secretary  of  Commerce,  Washington,  D.  C. 

Dear  Sir:  The  port  of  Seattle  is  a  public  body  just  completing  the  expenditure  of 
5:5,000,000  in  new  public  water-front  terminals  in  Seattle  embracing  six  groups  of 
whar\es,  warehouses,  luinber  pier,  grain  elevator,  cold-storage  plants,  public  railroad 
switches,  and  the  like. 

Prior  to  the  construction  of  public  harbor  terminals  with  the  proceeds  of  the  bonds 
voted  by  the  people  of  the  Seattle  port  district  (which  is  coterminus  with  King  County, 
Wash.)  "the  water-front  facilities  for  serving  commerce,  both  foreign  and  domestic,  m 
this  harbor  were  privately  o^vned  and  operated,  and  the  majority  of  such  private 
wharves  were  and  still  are  railroad  owned  and  controlled.  (See  Report  of  the  Com- 
missioner of  (Corporations  on  Transportation  by  Water  in  the  United  States,  published 
by  your  department,  1910-1912.) 


214      SHIPPING  BOAKD^  NAVAL  AUXILIAEY^  AND  MERCHANT  MABINE. 

The  same  report  indicates  a  considerable  interest  in.  if  not  actual  control,  of  water 
carriers  by  transcontinental  railroads.     (Same  ref^ort.  Part  IV. ) 

Where  the  public  interpose?  a  disinterested  intermediary  on  the  waterfront  to  serve 
as  a  connecting  link  between  raih'oads  and  water  carriers,  both  foreign  and  domestic, 
the  (luestion  is  presented  as  to  what  ])\iblic  body  is  empowered  to  regnlate  the  rela- 
tionships lietween  railroads  and  steamiships  at  said  point  of  contact.  It  is  a  twilight 
zone  or  "No  Man's  Land,"  where  the  jurisdiction  of  tlie  Interstate  Commerce  Com- 
mission or  the  State  Public  Service  Commission  apparently  does  not  fully  reach. 

Accordingly  your  honorable  attention  is  called  to  the  specific  instance  by  the 
Seattle  Port  Commission  of  the  apparent  discrimination  by  a  steamship  company 
operating  out  of  this  port  against  the  public  wharves  and  warehouses,  and  you  are 
tespectfully  requested  to  make  a  further  investigation  into  this  instance  and  into 
similar  practices  with  the  view  to  discovering  the  jurisdiction  to  properly  check  such 
discriminations  and  to  recommend  appropriate  legislation  to  the  President  and 
Congress  of  the  United  States. 

Mr.  J.  A.  Campbell,  903  Western  Avenue,  Seattle,  solicited  the  agent  of  the  Bell 
Street  Terminal  for  services  in  receiving  750  tons  of  sulphur.  The  rates  quoted  were 
the  regular  published  tariff  rates  of  the  Seattle  Port  Commission.  The  shipment  was 
to  arrive  over  the  Frank  Waterhouse  line  of  chartered  steamers.  A  few  days  later, 
Mr.  Cauipbell  obtained  storage  quotation  on  150  tons  of  sulphur  to  be  stored  in  the 
concrete  warehouse  of  the  said  Bell  Street  Terndnal,  and  was  quoted  20  cents  per 
2,000  pounds  per  month  storage  and  15  cents  per  2,000  pounds  for  loading  and  unload- 
iug  cars. 

The  Frank  Waterhouse  Co.  absolutely  refused  to  land  this  cargo  at  the  public  dock 
designated  by  the  importer,  although  the  usual  custom  in  this  port  is  for  a  steamship 
to  shift  to  another  dock  where  the  cargo  is  500  tons  or  over.  They  refused  to  shift  in 
this  case  with  a  cargo  of  750  tons.  As  an  excuse  they  asserted  that  the  port  of  Seattle 
had  n)  right  to  an  existence;  that  they  would  not  contribute  to  its  support;  that  the 
public  had  no  business  to  go  into  a  wharf  and  warehouse  business.  This  cargo,  how- 
ever, was  not  landed  at  the  Waterhouse  Dock,  but  the  vessel  was  landed  at  Pier  A, 
owned  by  the  Pacific  Coast  Co.  and  operated  by  Frank  R.  Hanlon.  an  opponent  of  the 
port  commission,  who  was  formerly  in  its  service,  and  who  latterly  has  devoted  a  great 
deal  of  time  to  extensive  published  criticisms  of  public  wharves  and  warehoiises. 

Below  is  a  comparison  of  the  charges  made  anl  compiled  by  the  port's  agent,  Mr. 
Green,  showing  that  the  water  carrier  not  only  discriminated  against  the  public 
wharves  and  warehouses,  but  against  the  shipper  as  well: 

pier  A.,  Mr.  Hanlon's  dock: 

Wharfage,  per  2.000  pounds $0.  50 

Handling  from  ship's  .sling  charge  to  Mr.  Campbell,  per  2.000  pounds 15 

Loading  out  charge  to  be,  per  2,000  pounds 25 

Total  cost  per  ton 90 

Port  commission's  Bell  Street  dock: 

Wharfage,  per  2.000  pounds 20 

Piling  on  dock,  per  2,000  pounds 08 

Loading  out,  per  2,000  pounds 15 

Total , .43 

From  the  above  it  will  be  seen  that  this  shipment  cost  Mr.  Campbell  47  cents  per 
ton  more  at  Mr.  Haiilon's  dock  than  it  would  have  cost  over  the  port's  dock.  Not 
only  this,  but  the  insurance  is  considerable. 

The  point  to  be  explained  is:- 

First.  Why  would  the  Waterhouse  Co.  refuse  to  land  a  cargo  at  port's  dock,  but  be 
willing  to  land  at  Pier  A .  which  has  a  very  small  slip? 

Second.  Why  should  the  Frank  Waterhouse  Co.  make  the  statement  that  they  would 
not  contribute  to  tlie  support  of  port  facilities? 

Robert  Bridges,  President. 

The  Chairman.  I  have  also  another  communication  addressed  to 
the  Secretary  of  Commerce  from  Robert  Bridges,  president  of  the 
port  commission  of  Seattle,  referring  to  the  discrimination  against  the 
mmiicipally  owned  docks  of  Seattle. 


SHIPPING  BOARD,  NAVAL  AUXILIARY_,  AND  MERCHANT  MARINE.      215 

(The  letter  referred  to  is  as  follows:) 

• 
Department  op  Commerce,  Office  of  the  Secretary, 

Washington,  February  12,  1916. 
My  Dear  Judge  Alexander:  Koforring  to  my  letter  to  you  of  December  20,  in 
which  I  handed  you  communication  from  the  president  of  the  port  of  Seattle  show- 
ing discrimination  against  the  publicly  owned  water  front  terminals  pf  that  city,  I 
now  hand  you  copy  of  letter  from  the  president  of  the  port  commission  of  Seattle, 
together  with  copy  of  the  telegram  to  which  he  therein  refers. 

I  suggest  that  in  connection  with  the  pending  hearings  on  the  shipping  bill,  some 
reference  might  be  made  to  this  matter  in  order  to  show  how  necessary  the  right  to 
license  may  be.  Clearly  a  public  board  would  not  license  vessels  on  any  basis  which 
would  permit  them  to  discriminate  against  publicly  owned  terminals,  as  appears 
to  be  the  case  in  the  example  of  Seattle. 
Yours,  very  truly, 

William  C.  Redfield,  Secretary. 
Hon.  J.  W.  Alexander, 

Chairman  Committee  on  Merchant  Marine  and  Fisheries, 

House  of  Representatives. 


(Port  of  Seattle.  Commissioners:  Robert  Bridges,  president:  C.  E.  Remsberg,  secretary;  Carl  A.  Ewald. 
Executive  staff:  J.  R.  West,  chief  engineer;  C.  J.  France,  counsel;  Hamilton  Higday,  assistant  secre- 
tary and  trafBc  manager;  W.  S.  Lincoln,  auditor.    General  offices,  Bell  Street  warehouse.] 

Seattle,  Wash.,  Fehrnary  5,  1916. 
Hon.  William  C.  Redfield, 

Secretary  of  Commerce,  Washington,  D.  C. 
D.ear  Sir:  Refemng  to  previous  presentation  of  discrimination  against  the  public 
docks  and  warehouses,  Seattle,  and  the  apparent  necessity  for  some  Federal  regula- 
tion over  such  matters  needing  new  legislation,  there  is  attached  hereto  telegram 
on  an  acute  situation  this  day  presented. 
Very  truly,  yours, 

Robert  Bridges, 
President  of  the  Port  Commisi^ior} . 


[Night  lettergram.] 

Seattle,  Wash.,  February  .5,  1916. 
Sperry  Flour  Co., 

Tacoina,  Wash.: 
Seven  hundred  thousand  bushels  wheat  stored  in  Hanford  Street  ]iublic  terminal 
situated  on  turning  Basin  east  waterway,  which  is  900  feet  wide,  1,600  feet  long. 
Waterway  channel  750  feet,  depth  80  to  40  feet.  Calmest  water  on  Elliott  Bay.  Next 
to  Smiths  Cove  public  pier;  this  dock  is  largest  and  most  commodious  berthing  place 
in  Seattle  and  capable  of  accommodating  any  vessel  plying  the  North  Pacific  Ocean. 
Serves  Japanese  liners  425  to  500  feet  long  mthout  tug  or  pilot. 

Kerr-Gifford  Co.  advises  that  Pacific  Steamshi})  Co.  refuses  to  take  your  grain, 
alleging  danger  to  vessel  which  is  preposterous.  Real  reason  probably  sufficient 
higher-priced  freight.  Service  am])le.  Men  plentiful.  Company  opposes  municipal 
ownershi]!.     Should  not  be  permitted  to  hide  behind  misrepresentation. 

Robert  Bridges, 
President  Port  of  Seattle. 

Also  a  communication  from  Mr.  D.  M.  King,  secretary  of  the  San 
Francisco  Chamber  of  Commerce,  transmitting  a  communication 
received  by  the  board  and  signed  by  a  large  number  of  the  more 
prominent  shippers  of  merchandise  between  San  Francisco  and  the 
Orient,  expressing  their  views  in  regard  to  shipping  conditions  in  the 
American  trans-Pacific  and  Orient  trade. 


216     SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

(The  letter  referred  to  is  as  follows) : 

*      San  Francisco  Chamber  of  Commerce, 

February  3,  1916. 
Hon.  J.  W.  Alexander, 

Chairman  Merchant  Marine  and  Fisheries  Committee  of  the 

House  of  Representatives,  Washington,  D.  C. 

Dear  Sir:  The  board  of  directors  of  the  San  Francisco  Chamber  of  Commerce 
transmit  herewith  for  your  information  and  consideration  a  copy  of  a  communication 
received  by  the  board  and  signed  by  a  large  number  of  the  more  proroinent  shippers 
of  merchandise  between  San  Francisco  and  the  Orient,  expressing  their  views  regard- 
ing the  necessity  for  Amercian  shipping  in  the  trans-Pacific  trade. 

This  communication  was  sent  to  this  chamber  by  the  signers  for  the  purpose  of 
going  formally  on  record  on  this  question  as  shippers  of  merchandise  as  distinct  from 
shipowners,  and  it  is  respectfully  transmitted  to  you  as  expressing  their  views  in  the 
matter. 


Respectfully,  yours, 


San  Francisco  Chamber  op  Commerce. 
D.  M.  King, 

Secretary. 


San  Francisco  Chamber  op  Commerce, 

San  Francisco.  Cal.,  January  25,  1916. 
Board  op  Directors, 

San  Francisco  Chamber  of  Commerce, 

San  Francisco,  Cal. 
Gentlemen:  We.  the  undersigned  importers,  exporters,  and  shippers  of  merchan- 
dise trans-Pacific,  respectfully  but  urgently  request  such  immediate  action  on  the  part 
of  the  chamber  of  commerce  as  will  look  to  the  restoration  of  the  American  flag  upon 
the  Pacific  Ocean. 

As  San  Franciscans,  as  Californians,  and  as  Americans,  we  feel  that  this  matter 
warrants  your  best  and  most  energetic  attention. 

To  ship  and  to  receive  all  of  our  merchandise  under  a  foreign  flag  spells,  in  our 
opinion,  ultimate  commercial  disaster,  not  only  for  the  Pacific  coast  but  wherever 
ocean  rates,  service,  and  an  intimate  knowledge  of  the  business  of  American  merchants 
are  a  part  of  commercial  endeavor. 

We  entertain  no  false  ideas  as  to  American  ships  or  American  shipping,  we  know 
that  they  must  of  necessity  stand  on  their  own  competitive  feet,  but  we  do  know 
from  experience  that  American  merchants,  American  commerce,  and  American  goods 
are  on  a  sounder,  a  fairer,  and  a  more  satisfactory  competitive  basis  when  dealing  with 
people  of  our  own  country  and  nationality  than  under  the  present  conditions. 

The  remedy  we  leave  to  your  broad  knowledge  of  conditions  commercial,  your  wide 
experience  in  matters  of  this  character,  and  your  weight  and  Influence  In  the  world 
of  commerce. 

If  the  fault  I'ea  with  the  shipowners,  we  ask  your  earnest  efforts  to  the  correction 
of  the  existing  evils. 

If  National,  State,  or  other  legislation  lies  at  the  bottom  of  the  conditions  as  they 
now  exist,  we  request  that  your  energetic  endeavors  be  used  and  that  our  representa- 
tives— State.  National,  or  otherwise— be  made  acquainted  with  your  ideas  and  sugges- 
tions, and  requested  to  lend  their  hearty  and  loval  support  thereto. 

We  have  operated  under  both  conditions — when  American  sliips  sailed  our  seas 
and  now  when  they  do  not. 

We  formerly  shipped  in  American  ships — there  are  no   American  ships  trans- 
Pacific  at  this  time — we  want  them  restored.    We  want  what  we  had,  but  are  now 
without — American  ships  for  American  shippers. 
Yours,  truly. 

Ames  Harris  Neville  Co.,  Tubbs  Cordage  Co.,  Zellerbach  Paper  Co., 
Somers  &  Co..  S.  L.  Jones  &  Co.,  M.  J.  Brandenstein  Co..  Western 
Import  Co.,  Cowen  Heineberg  Co.,  E,  T.  B.  Mills,  H.  M.  Newhall  Co., 
Henry  W.  Peabody  &  Co..  Pacific  Bone-Coal  &  Fertilizing  Co..  Selby 
Smelting  &  Lead  Co.,  Califoriia  Fruit  Cauners  Association,  Parrott  & 
Co.,  The  Parafiine  Paint  Co.,  Hills  Bros.,  Clayburgh  Bros.,  C.  Solo- 
mon, jr.,  S.  H.  Frank  &  Co.,  United  States  Rubber  Co.  of  Caliiornia, 
Bemis  Bros.  Bag  Co.,  Charles  Harley  Co..  A.  Schilling  &  Co.,  M,  Phil- 
lips &  Co.,  J.  A.  Folger  &  Co.,  Garcia  &  Maggini  Co.,  Kron  Tanning  Co. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      217 

Also  a  report  to  the  Secretary  of  the  Treasury  by  Hon.  Edmund 
Billings,  collector  of  customs  at  Boston,  Mass.,  in  reference  to  shipping 
conditions  at  that  port;  and  a  report  made  by  the  collector  of 
customs  of  New  York  on  the  same  subject. 

(The  reports  above  referred  to  are  as  follows :) 

.  The  Seceetary  of  the  Treasuky. 

Waahimiton,  December  28,  1915. 

Mif  Dear  Judge  Alexander:  Permit  me  to  hand  you  herewith  copy  of  a  very 

interesting  report  recently  made  to  me  by  Hon.  Edmund  Billings,  collector  of  customs 

at  Boston,  Mass..  with  reference  to  shipping  conditions,  etc.,  at  that  port.     I  also  send 

you  copy  of  a  reporl  made  by  the  collector  of  customs  at  New  York  on  the  same  subject. 

Faithtully,  yours, 

W.  G.  McAdoo. 
Hon.  Joshua  W.  Alexander, 

TTomsr.  of  Representatives. 


Treasury  Departmemt, 
UviTED  States  Custom^  Service, 

Boston.  Mass..  Dcemher  1.5.  1915. 
Hon.  William  G.  McAdoo, 

Seiretary  of  the  Trensunt,  Woshl/if/t.on,  D.  ''^. 

My  Dear  Mr.  Secretary:  Thinking  it  might  be  of  value  to  you  at  this  time, 
and  in  view  of  the  many  reports  which  are  current  regarding  the  congestion  of  export 
freight  at  Atlantic  shipping  ports.  T  have  had  a  careful  investigation  made  of  export 
conditions  now  existing  at  this  port.  In  order  to  ascertain  as  accurately  as  possible 
the  fundamental  factors  governing  the  shipping  of  commodities  to  Europe,  I  instructed 
two  of  our  most  efficient  employees  to  personally  interview  all  of  the  export  forwarders, 
the  i^rincipal  individual  exporters,  the  agents  of  the  railroads  which  receive  and  dis- 
charge export  merchandise  to  the  various  wharves,  agents  of  all  European  steamship 
lines,  and  the  secretaries  of  commercial  organizations  Interested  in  foreign  trade. 
Their  report,  which  I  submit  herewith,  discloses.  I  believe,  essential  facts  which 
should  be  known  to  yen  and  to  your  department.  Briefly  analyzed,  this  report 
ehows: 

First.  That  to  insure  shipment  of  their  commodities  exporters  or  their  agents  must 
make  steamer  reservations  from  two  to  six  weeks  in  advance  of  sailing,  and  that 
there  is  more  export  freight  moving  than  ever  before  with  little  confusion  and  con- 
gestion, shippers  having  been  educated  to  meet  existing  conditions  by  not  forward- 
ing merchandise  for  export  faster  than  the  steamship  lines  are  able  to  provide  space 
for  it.  That  undoubtedly  there  is  a  large  quantity  of  freight  awaiting  exportation  to 
Europe  which  would  be  shipped  by  way  of  Boston  provided  cargo  space  could  be 
procured.  Six  of  the  seven  steamship  agents  admit  that  there  is  a  shortage  of  ocean 
steamer  tonnage  at  this  port. 

Second.  That  for  the  five  months,  from  July  1,  1913,  to  December  1,  1913,  105 
steamers,  of  a  total  net  tonnage  of  607,465,  cleared  for  European  ports;  for  the  corre- 
sponding period  in  1914  77  steamers,  of  a  total  net  tonnage  of  416,543  (a  decrease  of 
31  per  cent),  cleared  for  European  ports;  for  the  corresponding  period  of  1915  81 
steamers,  of  a  total  net  tonnage  of  326,491  (46  per  cent  less  than  1913),  cleared^  for 
European  ports.  That  the  value  of  exports  to  Europe  for  the  above-named  perioda 
was,  respectively,  130,251,903,  $31,375,699,  and  $42,926,643,  the  value  of  the  exports 
in  1915  showing  an  increase  of  41  per  cent  over  the  same  period  in  1913. 

Third.  That  exporters  complain  of  the  exceedingly  high  freight  rates  quoted  by 
steamship  agents,  the  percentage  of  increase  from  July  1,  1913,  to  December  1,  1915, 
being,  on  provisions  309  per  cent,  on  cotton  400  per  cent,  on  flour  400  per  cent,  and  on 
grain  1,166  per  cent.  (It  appears  that  steamship  agents  have  no  tariff  schedules  and 
experience  little  or  no  difficulty  in  securing  their  own  quotations.  The  general 
opinion  prevailing  among  export  agents  and  individual  exporters  is  that  steamship 
companies  are  taking  advantage  of  an  unprecedented  situation  and  are  in  a  position 
to  demand  and  receive  their  own  prices,  freight  rates  on  many  commodities  being 
only  a  secondary  factor — the  essential  point  is  delivery  overseas.)  That  the  large 
volume  of  American  commodities  imperatively  needed  by  European  consignees, 
regardless  of  exorbitant  freight  rates,  and  the  totally  inadequate  supply  of  ocean 
carriers  necessary  to  meet  present  freight  offerings  are  not  only  important  factors  in 


218      SHIPPING  BOABD^  NAVAL  AUXILIARY,  AND  MEECHANT  MARINE. 

maintaining  liigh  freight  rates,  but  incidentally  form  in  no  small  number  of  cases 
an  effective  barrier  in  preventing  American  manufacturers  from  engaging  in  com- 
petitive commerce  in  foreign  markets. 

Fourth.  That  exporters  and  the  secretaries  of  commercial  organizations  interested 
in  foreign  trade  are  practically  unanimous  in  declaring  that  the  opportunities  for 
American  merchants  to  engage  in  overseas  commerce  were  never  brighter  than  at 
present,  and  the  local  Bureau  of  Foreign  and  Domestic  Commerce  reports  that  it  is 
estimated  that  at  least  100  firms  previously  not  interested  in  foreign  markets  for 
their  products  have  gone  into  this  branch  in  earnest  and  that  about  10  commission 
houses  have  been  established  during  1915  for  exporting  New  England-raade  goods. 

May  I  add  that  we  were  obliged  to  promise  most  of  the  firms  and  corporations  quoted 
in  this  report  that  they  would  not  be  quoted  publicly  without  our  first  obtaining  their 
permission? 

May  1  also  ask  if  you  see  any  objection  to  my  giving  to  the  Boston  press  the  substance 
of  this  report? 

I  inclose,  also,  a  copy  of  a  statement  from  the  Boston  News  Bureau  under  date  of 
December  1,  1915,  giving  another  viewpoint  on  the  same  question. 
I  am,  with  sincere  respect,  yours,  faithfully, 

Edmund  Billings,  Collector. 

Boston  News  Bureau,  December  1,  1915, 

Railroad  presidents  of  all  business  terminals  at  New  York,  Boston,  Philadelphia, 
Baltimore,  and  Newport  News  attended  a  conference  yesterday  at  New  York  for  the 
purpose  of  deA-ising  means  to  relie^'e  terminal  situation  along  the  Atlantic  seaboard, 
which  is  especially  serious  at  New  York  and  Philadelphia. 

The  situation  at  New  York  was  found  more  serious  than  at  other  seaports.  Phila- 
delphia reported  congestion  in  certain  commodities,  but  the  general  situation  is  not 
severe.  Boston,  Baltimore,  and  Newport  News  report  no  congestion  and  facilities 
ample  to  handle  additional  traffic. 

The  situation  at  New  York  is  aggravated  by  heavy  movement  of  munitions  and  a 
factor  is  that  many  contracts  on  goods  destined  abroad  call  for  delivery  f.  o.  b.  New 
York.     Steamship  facilities  are  lacking  to  handle  the  volume  offered. 

No  action  has  been  decided  on.  Probably  attempts  will  be  made  to  discourage 
shippers  of  certain  commodities.  Distribution  of  eastbound  traffic  to  ports  with  free 
facilities  will  undoubtedly  be  attempted. 

The  New  York  Central  may  find  it  necessary  to  put  an  embargo  on  certain  special 
commodities  that  accumulate  faster  than  they  can  apparently  be  taken  away  by  the 
steamships. 

Treasury  Department,  United  States  Customs  Service, 

Boston,  Mass.,  December  9,  1915. 
Hon.  Edmund  Billings, 

Collector  of  Customs,  Boston,  Mass. 
Sir:  Follo\Ting  your  instructions  to  make  an  investigation  into  export  conditions 
existing  at  this  port  we  have  the  honor  of  submitting  for  your  consideration  the 
following  report: 

In  order  to  ascertain  as  accurately  as  possible  the  essential  factors  governing  the 
shipping  of  commodities  to  foreign  ports,  we  had  personal  interviews  with  practically 
all  of  the  export  forwarders,  the  principal  individual  exporters  (who  attend  to  their 
own  shipping  details),  the  two  agents  of  the  railroads  which  receive  and  discharge 
export  merchandise  to  the  various  wharves,  agents  of  all  European  steamship  lines, 
and  the  secretaries  of  commercial  organizations  interested  in  foreign  trade. 

export  forwarders. 

There  are  located  in  Boston  about  12  firms  engaged  in  the  foreign  freight-forwarding 
business.  Each  of  these  brokers  represents  from  3  to  60  indi\'idual  exporters  on  every 
outgoing  steamer  to  Europe.  They  attend  to  steamer  reservations,  freight  rates, 
insurance,  customs  formalities,  and  all  transportation  details.  The  situation  as  it 
appears  to  these  firms  is  herewith  summarized: 

American  Express  Co. — -Have  from  50  to  60  shipments  on  each  steamer  out- 
going to  the  United  Kingdom.  The  greater  number  of  these  originate  in  New  Eng- 
land, although  other  sections  of  the  country,  particularly  the  Middle  West,  forward 
for  export  via  Boston. 

Consignments-cover  all  kinds  of  merchandise,  but  motor  trucks,  brass  goods,  and 
cartridge  belts  are  the  principal  additions  since  the  outbreak  of  the  war.  Lumber 
shipments  are  overbooked  and  steamship  agents  refuse  to  quote  at  present  on  this 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.-     219 

cla.«s  of  merchandise.  Steamers  are  practically  all  booked  up  on  weight  cargo.  Agents 
give  preference  at  this  time  to  measurement  cargo.  Steamer  reserAations  must  be 
made  at  least  two  weeks  in  advance  on  measurement  cargo  and  six  weeks  in  advance 
on  weight  cargo.  More  business  moving  than  ever  before  with  little  confusion  and 
congesfion,  because  shippers  have  been  educated  to  meet  existing  conditions.  Little 
or  no  competition  among  steamship  lines.  Enough  freight  offered  to  satisfy  all  their 
demands.  Boston  could  export  more  if  increased  ocean-going  tonnage  were  available. 
Enough  business  in  New  England  to  warrant  establishing  a  line  direct  to  Archangel. 
Freight  rates  have  advanced  on  general  merchandise  from  10  cents  per  cubic  foot  in 
normal  times  to  38  cents.  Rates  continually  soaring.  Steamship  agents  have  no 
tariff  schedule  but  get  about  Avhat  they  ask  for.  Will  only  make  limited  contracts 
not  to  exceed  3  months.  For  many  commodities  freight  rates  are  a  secondary  con- 
sideration:   The  vital  point  is  delivery  overseas. 

Stone  c{-  Downer  Co. — Average  25  shipments  of  general  merchandise  from  all 
sections  of  the  country  on  each  outgoing  steamer  to  the  United  Kingdom.  This 
firm  represents  a  large  number  of  big  leather  establishments.  Have  no  difficulty 
in  booking  shipments,  except  perhaps  with  the  Allan  Line  to  Glasgow.  Reserva- 
tions, however,  are  made  from  2  to  4  weeks  in  advance.  Congestion  is  not  apparent. 
Freight  rates  are  high  because  steamship  owners  have  no  trouble  in  obtaining  their 
own  figures.     It  would  seem  that  the  steamship  people  are  reaping  a  good  harvest, 

Caldwell  &  Co. — About  10  shipments  of  general  merchandise  on  each  steamer 
outbound  for  the  United  Kingdom.  Leather  and  cotton  waste  are  principal  additions 
since  the  war.  Bookings  must  be  made  from  two  to  four  weeks  in  advance  of  sailing. 
Not  sufficient  steamers  to  handle  export  business.  Freight  offerings  run  froni  30  to 
40  per  cent  above  AAhat  can  be  accommodated.  Merchandise  occasionally  diverted 
to  other  ports  for  shipment  on  account  of  lack  of  cargo  space.  Hudson  automobile 
agent  tried  through  this  firm  to  contract  for  cargo  space  for  20  autos  each  month,  but 
steamship  agents  would  not  accept.  Freight  rates  are  high,  but  the  consignee  pays. 
Many  lirves  have  been  ordered  to  give  preference  to  food  supplies — result:  Less  space 
for  general  merchandise  with  continually  increasing  freight  rates.  Export  merchants 
understand  shipping  conditions  better  than  formerly  so  that  commodities  are  not 
forwarded  by  rail  until  final  arrangements  have  been  made.  Many  shippers  will 
take  a  chance  for  export  at  New  York  with  booking  in  advance — I'esult:  Little  con- 
gestio:i  in  Bostoii,  with  opposite  conditions  prevailing  in  Nev.-  York. 

Aualin  Baldwin  <fc  Co. — Average  of  15  shipments  of  general  merchandise  on  each 
outgoing  steamer  to  the  United  Kingdom.  Machinery  principal  item  since  the  war. 
Bookings  are  made  from  three  to  four  weeks  in  advance.  Nothing  forwarded  unless 
reservations  have  been  made.  Export  business  excellent.  There  appears  to  be  no 
competition  among  steamship  people.  No  cutting  of  rates  and  little  effort  on  their 
part  to  secure  business. 

TF.  N.  Proctor. — Averaging  10  shipments  of  general  merchandise  on  each  steamer 
outbound  for  the  United  Kingdom.  Ma.hiner3%  knit  goods,  alum,  and  chemicals  are 
the  principal  items  since  the  outbreak  of  the  war.  No  trouble  m  booking  if  sufficient 
time  >s  allowed.  Freight  rates  are  high,  but  the  question  of  delivery  is  the  important 
factor.  Little  war  supplies  are  exported  from  Boston  for  the  reason  that  the  firms 
a:ting  as  agents  for  the  allies  are  located  iji  New  York,  and  they  Tiaturally  see  that 
such  supplies  travel  via  New  York  in  order  to  collect  their  commissions. 

Adams  Express  Co. — From  7  to  10  shipments  of  general  merchaTidise  on  each  out- 
going steamer  to  United  Kingdom.  Could  ship  more  merchandise  from  Boston  if 
proper  tonnage  were  available.  Not  sufficient  vessels  in  Boston  service.  Book  ship- 
ments from  two  to  four  weeks  in  advance.  Have  some  bookings  up  to  March  1,  1916. 
Can  not  get  space  on  Cunard  sailings  to  London.  Steamship  agents  do  not  desire 
lumber,  steel,  or  any  hea\-y  cargo.  Unable  to  book  40,000  cases  canned  salmon  and 
3,000,000  feet  lumber,  because  freight  rates  are  beyond  reason.  Some  manufacturers 
have  been  asked  to  quote  prices  c.  i.  f..  but  the  present  high  rates  prevent  them 
operating  in  foreign  markets.  Stearnship  lines  are  reaping  enormous  profits  due  to 
limited  tonnage  and  immense  freight  offerings. 

T.  D.  Downing  Co. — D.  C.  Andrews  &  Co. — Judson  Freight  F&rwarding  Co. — A.  E, 
Freeman. — The  foregoing  firms  have  from  3  to  15  shipments  each  on  every  outbound 
steamer  to  the  United  Kingdom.  They  report  that  little  physical  congestion  exists, 
due  to  better  understanding  of  shipping  conditions.  They  make  booking  arrange- 
ments from  one  to  four  weeks  in  advance  of  scheduled  date  of  sailing.  In  the  Man- 
chester and  Glasgow  services  there  appears  to  be  some  difficulty  in  securing  cargu 
space.  Freight  rates  are  high,  but  there  are  sufficient  freight  offerings  to  maintain 
such  figures.  In  many  cases  delivery  is  the  important  consideration.  Certain 
American  manufacturers  would  go  into  the  foreign  trade,  but  present  transportatioo 
conditions  are  an  effective  barrier. 


220      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

INDIVIDUAL   EXPORTERS. 

Lawrence  &  Co. — Probably  largest  exporter  of  hosiery  in  New  England.  Estab- 
lished foreign  market  about  two  years  ago.  Ship  approximately  350  cases  to  England 
each  month :  500  per  cent  increase  in  business  over  last  year.  Bookings  are  now  made 
up  to  end  of  March.  Shipping  200  cases  this  month  to  London  via  New  York  because 
Cunard  Line  is  unable  to  accept  this  offer  outbound  from  Boston.  Freight  rates  are 
extremely  high.  Before  the  war  the  freight  figured  $3.50  per  ton  measurement 
December,  1914,  it  amounted  to  $5.75:  at  this  time  they  are  paying  $14.04  per  ton 
measurement — an  increase  of  300  per  cent  over  rates  in  force  prior  to  the  war. 

A.  C.  Lavrence  Leather  Co. — One  of  the  largest  exporters  of  leathers  in  the  United 
States.  Average  10  shipments  of  $50,000  each  every  month  from  Boston  to  the  United 
Kingdom  and  Scandinavian  ports.  Can  secure  sufficient  cargo  space  to  above-named 
points  by  booking  in  advance.  Have  also  about  10  shipments  each  month  to  France 
and  Mediterranean  ports  via  New  York.  Would  prefer  to  make  all  shipments  via  Bos- 
ton if  accommodations  could  be  arranged.  Freight  rates  seem  unreasonably  high; 
to  Scandinavian  points  the  rate  before  the  war  was  30  shillings  per  ton;  at  present  it 
fluctuates  from  120  to  200  shillings  per  ton.  Furthermore,  the  ton  is  now  figured  on  a 
measurement  basis  which  makes  a  difference  of  60  per  cent  in  favor  of  the  steamship 
companies.     Export  business  in  excellent  condition. 

Nowes  Bros,  (leather). — Ship  about  500  tons  leather  per  month  to  European  ports. 
Are  able  to  book  consignments  to  English  ports  without  serious  delay.  Export  business 
increa.sed  greatly  since  beginning  of  the  war.  Before  the  war  practically  all  ship- 
ments made  direct  from  Boston.  Now  about  two-thirds  of  shipments  made  via  New 
York  because  space  can  not  be  secured  in  ships  from  Boston.  Have  great  diflSculty  in 
securing  space  for  shipments  to  Holland. 

Beggs  &  Cobb  (leather). — Ship  80  to  100  tons  of  leather  per  month  from  Boston. 
On  account  of  insufficient  number  of  sailings  from  Boston  divert  30  to  40  tons  per 
month  to  New  York.  Space  not  refused  on  Boston  ships  but  at  times  can  not  wait  for 
sailings.     Before  the  war  practically  all  shipments  made  from  Boston. 

American  Nirle  &  Leather  Co. — Ship  60  to  100  tons  leather  per  month  to  Europe. 
Divert  about  50  tons  per  month  to  New  York  for  shipment  because  of  lack  of  sailings 
from  Boston.  Have  little  trouble  in  booking  shipments  to  Liverpool  and  London,  but 
have  difficulty  in  booking  to  Switzerland. 

Boston  Rubber  Shne  Co.  &  .American  Rubber  Co. — Combined  exportations  from  Bos- 
ton average  122  tons  per  month.  Are  able  to  secure  sufficient  space  in  steamers  sail- 
ing from  Boston  by  booldng  about  one  month  ahead.  Have  diverted  no  shipments 
to  other  ports. 

Hood  Rubber  Co. — Ship  from  1,500  to  2,000  packages  of  rubber  goods  per  month  to 
Europe.  Have  no  serious  difficulty  in  securing  space  on  steamers  saiUng  from  Boston. 
Ship  goods  to  Italian  ports  via  New  York  and  have  considerable  difficulty  in  securing 
bookings. 

United  Shoe  Machhienj  Co. — Have  less  difficulty  now  in  booldng  shipments  than 
six  months  ago.  Shipments  vary  in  ([uantity  from  month  to  month.  Last  month 
exported  to  Europe  570  tons  machinery  from  Boston.  Experience  some  delays  in 
bookings  but  not  serious. 

B.  F.  Sturtcvant  Blower  Works.— Ship  60  to  70  tons  machinery  per  month  from 
Boston.  Have  met  with  no  refusal  of  space  on  steamers  but  some  delays  and  at  times 
annoyance,  caused  by  steamship  companies  splitting  shipments,  i.  e.,  a  part  of  ship- 
ment left  on  the  wharf  to  be  taken  by  a  later  steamer.  Ship  some  freight  by  way  of 
New  York  because  of  more  frequent  sailings. 

Blal'e  &  Knowles  (machinery). — pjxport  principally  through  New  York.  No  par- 
ticular difficulty  in  shipping  from  Boston.  Would  probably  ship  more  goods  from 
Boston  if  sailings  were  more  frequent.  Cargo  space  has  not  been  refused  them  by 
Boston  Steamship  companies. 

Potter  Drug  &  Chemical  Co.— Ship  about  50  tons  of  their  products  per  month  to 
Great  Britain.  No  delay  or  other  difficulty  experienced  except  with  shipments  to 
Glasgow  (amounting '^to  about  8  tons  per  month).  For  the  past  year  Glasgow  ship- 
ments have  been  delayed  at  times  one  month  by  steamship  company  due  to  lack  of 
space  or  infrequent  sailings. 

Armour  &  Co.  (meats  and  meat  products).— S^hi])  125  to  1,200  tons  per  month.  At 
times  are  unable  to  get  sufficient  space  on  steamers.  Not  enough  refrigerator  space 
available.  Part  shipments  of  refrigerator  goods  have  been  shut  out  by  steamers  and 
company  has  been  obliged  to  place  same  in  cold  storage  in  Boston.  More  goods  would 
be  shipped  if  shipping  space  were  pro\'ided  and  rates  were  within  reason.  Practi- 
cally no  trouble  before  the  war  in  securing  ample  space. 


SHIPPIXG  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT   MARINE.      221 

Sii'ifl  &  Co.  (meals  and  nuat  jyroduds).-  A\?.\e  shippe<i  on  average  (luring  1915  about 
185  tons  per  month.  Immediately  before  the  war  were  exporting  but  ^■ery  little. 
Are  unable  to  procure  sufficient  refrigerator  space  on  ships  sailing  from  Boston.  For 
this  reason  205  carloads  of  refrigerator  goods  were  diverted  to  Montreal  for  shi})ment 
between  May  1  and  November  31,  1915.  Ocean  freight  rates  tremendously  increased 
since  the  war  broke  out. 

JSiorlh  Puckimi  d:  Provision  Co.  and  J.  I',  iiijuire  &  (^o.  — Have  shipments  of  pork 
products  in  every  steamer  outbound  from  Boston  to  Liverpool,  London,  and  Glasgow. 
Above  firms  have  exported  20,000  tons  between  January  1,  1915,  and  December  1, 
1915.  They  have  no  difficulty  in  securing  sufficient  cargo  space  except  to  Scandi- 
navian points  and  to  Holland.  Products  do  not  occupy  refrigerator  space.  Ship  also 
via  New  York  to  points  not  having  direct  ocean  service  with  Boston. 

BUSINESS   ORCIANr'iATION.S. 

Boston  Chamber  of  Commerce,  fnreif/n  trade  committee.  — Receiv'e  many  inquiries  from 
Europe  and  South  America  to  be  put  in  communication  with  American  manufacturers. 
Export  business  excellent.     High  freight  rates  probably  discom'age  some  exporters. 

Vriited  States  Buremi  of  Forcvin  and  Dtnnestic  Commerce. — Great  interest  in  foreign 
trade  during  the  past  year.  It  is  estimated  that  at  least  100  firms  who  previously 
were  not  interested  in  foreign  markets  for  their  products  have  gone  into  this  field  in 
earnest.  About  10  commission  houses  have  been  established  during  1915  for  ex- 
porting New  England-made  goods.  Every  indication  that  the  volume  of  exports  will 
continue  to  increase. 

A>)t)  Eni/Jand  Shoe  and  Leather  .4ssoriat inn .-  Grent  increase  in  volume  of  exports 
of  shoes  and  leather  in  general.  A  considerable  part  of  these  commodities  is  exported 
through  the  medium  of  customs  brokers.  There  appears  to  be  a  lack  of  vessels  for 
the  export  trade,  and  the  impression  ])reviiils  among  manufacturers  that  the  steam- 
ship people  are  taking  advantage  of  the  situation  to  obtain  all  they  can  for  trans- 
porting merchandise  overseas.  In  some  cases  the  cost  of  the  freight  rate  is  not  con- 
sidered of  primary  importance — delivery  is  the  principal  requirement. 

Mr.  Phillip  Abbott,  head  salesman  for  the  A.  C.  Lawrence  Leather  Co. — The  above- 
named  gentleman  has  just  returned  from  a  tour  of  England,  France,  and  Italy  in  the 
interests  of  his  concern.  He  spoke  mainly  from  the  point  of  ^iew  of  European  buyers. 
They  found  the  present  freight  rates  exorbitant  and  the  rates  of  exchange  outrageous. 
Mr.  Abbott  declared  that  American  manufacturers  have  the  greatest  opportunity  in 
the  history  of  the  country  to  entrench  themselves  in  overseas  trade.  He  criticized 
the  poor  service  given  by  the  .\merican  Line,  and  suggested  that  something  be  done 
to  increase  American  vessels,  lower  freight  rates,  and  establish  strong  commercial 
ties  between  the  V  4ted  States  and  European  countries. 

STE.\.M.SH1P   .^GKNTS. 

Jnternational  Mercantile  Marine. — Cargo  capacity  of  steamers  in  Boston  service  about 
the  same  as  last  year.  Hor.ses  are  loaded  on  steamers,  account  of  British  Government, 
which  fact  reduces  cargo  space  by  approximately  20  per  cent.  Freight  rates  are  high — 
due  to  the  great  demand  for  accommodations.  Grain,  cotton,  and  provisions  receive 
some  preference  in  booking.  War  supplies  (everything  except  ammumtion  which  is 
not  shipped  via  Boston^  are  also  given  consideration  in  booking.  The  result  is  less 
space  for  general  merchandise.  Ocean  tonnage  is  scarce  everywhere  in  America. 
Boston  better  off  than  New  York.  Freight  rates  are  not  a  great  issue;  shippers  seem 
willing  to  i^ay  any  quotation,  as  the  consignees  must  have  the  commodities  and  are 
willing  to  pay  the  price.  Congestion  does  not  exist  at  Boston,  but  rather  in  ports  of 
arrival  in  the  United  Kingdom.  Delay  in  unloading  and  taking  on  new  cargo  at  these 
ports  hamper  the  serAdce  and  result  in  less  frequent  trips. 

The  Canard  Steamship  Co. — All  steamers  now  in  Boston  service  are  chartered  ves- 
sels. Not  sufficient  ocean  tonnage  at  Boston  to  handle  freight  offerings.  No  con- 
gestion at  this  port,  but  delays  and  difficulties  are  features  at  Liverpool.  From  Jan- 
uary 15,  1914,  to  October  1.3,  1914,  Cun.ard  service  to  Liverpool  had  18  sailings,  carry- 
ing"54.899  tons  of  cargo;  from  January  2,  1915,  to  October  1?>,  1915,  K!  saihngs,  carrying 
102,711  tons  of  cargo.     Freight  rates  are  based  upon  the  law  of  supply  and  demand. 

The  Allan  Steamship  Co. — All  regular  liners  in  Boston  service  have  been  either 
commandeered  by  the  British  Government  or  are  running  from  other  ports.  Steamers 
now  running  from  this  port  are  all  chartered  steamers.  No  congestion  at  Boston, 
but  at  Glasgow  much  trouble  is  experienced.  The  present  high  freight  rates  may  be 
attributed  to  the  excessive  charges  made  by  the  ovvners  of  the  chartered  steamers 

32910—16 15 


222      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

and  other  abnormal  expenses  incuiTed  in  the  ocean  freight  business  during  the  war. 
Sufficient  steamers  in  the  Glasgow  service  to  handle  freight  offerings. 

Wilson  Sterimship  Line. — Maintain  two  sailings  per  month  from  this  port  to  Hull, 
England,  ^^a  New  York.  Have  been  obliged  to  refuse  bookings  of  freight  for'some  of 
local  exporters,  because  of  space  reserved  for  New  York  shipments.  Have  not  space 
enough  to  book  all  grain  offered. 

Patterson  Wylde  &  Co. — ^laintain  average  of  two  ships  per  month  to  Manchester, 
England.  Are  able  to  provide  spice  for  all  local  freight  but  bookings  must  be  made 
about  one  month  ahead  of  sailings.  Great  demand  for  space  for  grain  shipments, 
which  they  are  unable  to  meet.     Could  fill  20  to  30  steamers  with  export  grain. 

Furness  Withy  &  Co. — Maintain  three  sailings  per  month  to  Liverpool,  England. 
Generally  able  to  meet  all  requirements  for  export  cargo  space  except  for  grain.  If 
had  more  ships  could  book  very  lirge  quantities  of  grain. 

A.  C.  Lombard's  Sons. — Maintain  sailings  of  two  steamers  per  month  to  Copenhagen. 
More  general  cargo  offered  for  export  than  can  be  provided  in  present  number  of  ships. 
Could  fill  10  steamers  per  month  while  demand  for  grain  space  lasts.  Could  fill  four 
boats  per  month  outside  of  grain  shipments.  Have  to  refuse  cargo  offered  from  the 
West  from  Canada  and  from  New  Yoik  State.  Local  shippers  well  provided  for,  but 
these  are  not  a  large  factor. 

RAILKO.\D    AGENTS — ^FOREIGN    FREIGHT    DEPARTMENTS. 

Boston  &  Albany  and  New  York  Central  Railroads:  Cars. 

Merchandise  in  East  Boston  yards  for  exportation 462 

Merchandise  on  East  Boston  piers  for  exportation 126 

Merchandise  in  AUston  yards  for  exportation .- 262 

Grain  sidetracked  In  yards  outside  of  Boston  for  exportation 520 

Merchandise  sidetracked  in  yards  outside  of  Boston  for  exportation 200 

Boston  &  Maine  Railroad: 

Merchandise  in  yards  in  Charlestown  for  exportation 394 

Grain  in  yards  in  Charlestown  for  exportation 73 

Merchandise  on  piers  in  Charlestown  for  exportation 318 

Total 2, 355 

In  the  Boston  &  Albany  Railroad  grain  elevator  in  East  Boston  are  635,000  bushels 
grain  Ccapacity  of  elevator,  1,000,000  bushels).  Owing  to  variety  of  shipments  stored 
is  tilled  practically  to  working  capacity.  ' ' 

In  the  Boston  &  Maine  Railroad  grain  elevator  at  Hoosac  Tunnel  Docks,  Charles- 
town, are  414,000  bushels  of  grain.     (Capacity  of  elevator  1,000,000  bushels.) 

In  the  Boston  &  Maine  Railroad  grain  elevator  at  Mystic  Docks,  Charlestown,  are 
252,000  bushels  of  grain.     (Capacity  of  elevator  350,000  bushels.) 

Total  in  elevators  in  Boston  for  exportation,  1,301,000  bushels  of  grain. 

Foreign  freight  agents  of  the  Boston  &  Maine,  New  York,  New  Haven  &  Hartford, 
Boston  &  Albany,  and  New  York  Central  Railroads  state  that  more  freight  is  being 
offered  than  can  possibly  handled  by  the  steamers  now  sailing  from  this  port.  The 
agent  of  the  Boston  &  Albany  and  New  York  Central  Railroads  states  that  the  Ray- 
mond Hadley  Corporation  (a  New  York  firm)  recently  offered  to  deliver  to  him 
§1,000,000  worth  of  flour  if  he  would  secure  the  necessary  steamer  space  for  its  expor- 
tation.    The  offer  was  declined  because  no  space  was  available. 

STEAMSHIP  PIERS   AND   TERMINAL   YARDS. 

The  steamship  piers  at  the  port  of  Boston  are  not  now,  and  have  not  been,  during 
the  present  year  in  a  congested  condition. 

The  terminal  yards  of  the  Boston  &  Maine  and  of  the  New  York,  New  Haven  & 
Hartford  Railroads  are  not  now  and  have  not  been  during  the  present  year  in  a  con- 
gested condition. 

The  terminal  ysLrds  of  the  Boston  &  Albany  and  of  the  New  York  Central  Railroads, 
situated  in  East  BoFton  and  Allston,  are  filled  as  full  of  export  freight  as  working 
conditions  will  permit.  Congestion  of  the.se  yards  has  been  avoided  only  by  side- 
tracking freight  in  yards  further  out  of  Boston;  520  cars  of  grain  and  200  cars  of  general 
merchandise  destined  for  exportation  via  these  terminals  are  now  being  held  on  side 
tracks  outside  of  Boston,  pnncipally  along  the  line  from  Albany  to  Boston. 

In  conclusion,  we  may  state  that  there  is  no  serious  congestion  of  export  merchan- 
dise at  the  railroad  terminals  or  on  the  steamship  piers  at  this  port.  That  congestion 
does  not  exist  in  Boston  is  due  to  the  fact  that  merchandise  is  not  forwarded  for  export 
faster  than  the  steamship  lines  are  able  to  provide  space  for  it. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      228 

Without  question  there  is  a  larga  quantity  of  freight  awaiting  exportation  to  Europa 
which  would  be  shipp3d  by  way  of  Boston  provided  cargo  space  could  be  procured. 
Notwithstanding  the  exceedingly  high  freight  rates  now  quoted  by  steamship  agents 
the  demand  in  Eurcpa  for  certain  classes  of  American  merchandise  is  so  inip.irative 
that  freight  rates  are  a  secondary  consideration.  With  normal  freight  rates  prevail- 
ing, more  American  products  would  undoubtedly  be  exported. 
Respectfully, 

M.  B.  Mann, 

Deputy  Surveyor. 
Joseph  F.  Scanlan, 
C.7m>/  Cleric  Entry  Divisiov. . 


Clearances  and  net  tonnage  of  vessels  to  European  ])orts. 


Month. 

1913 

1914 

1915 

Vessels. 

Tonnage. 

Vessels. 

Tonnage. 

Vessels. 

Tonnage. 

Julv     

20 
20 
21 

125. 096 
124,472 
131.333 

20 
11 
13 
17 
16 

129,546 
61,245 
75, 523 
77, 735 
72,494 

14 
13 
13 
18 
23 

60,364 

August   

55.456 

51. 1S7 

24  <     126.020 
20  1     100,-544 

70,301 

88.913 

105 

607,465 

77 

416,543 

81 

326,491 

1914  tonnage=31  per  cent  less  than  1913  tonnage. 

1915  tomiage=46  per  cent  less  ttan  1913  tonnage. 

Value  of  exports. 


Month. 

1913 

1914 

1915 

July  

$5,744,442     $5, 146,  .'599 
7,119.032       3,153.394 
6.227.487       4. 185,  .=^24 
6,518,390       9.766.318 
4,642.552  j    9,123,8W 

«9. 104.337 

8,606,114 

7.177.360 

8. 703, 362 

9, 245, 470 

Total 

30,251,903 

31,375,699 

42,926,643 

Value  of  exports,  1915,  increased  41  per  cent  over  same  period  in  1913. 


Comparison  of  freight  rates  to  Liverpool. 

[Quoted  in  cents.] 
GRAIN,  PER  BUSHEL  OF  60  POUNDS. 


1913 

1914 

3  -6i 

3  -4 

4  -5i 

4  -8 

24-6 

3 

3-5J 

4-6J 

4*-6 

6i 

1915 


July 

August 

September 
October. .. 
November. 


Percentage  increase  from  Julv  1,  1913.  to  Dec.  1,  1915,  1,166  per  cent. 
FLOUR,  PER  100  POUNDS. 


July 

August 

September 
October. .. 
November. 


14 

10-12 

14-16 

12-14 

14-16 

12-23 

15 

12-21 

15 

18-20 

20 

20 

20  -30 

36  ^0 

401-38 


4S 

45 

45-60 

60-70 

70 


Percentage  increase  from  July  1,  1913.  to  Dec.  1.  1915,  400  per  cent. 


224       SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT   MARINK. 


Comparison  of  freight  rates  to  Liverpool — Continued. 
PROVISIONS,  PER  100  POUNDS. 


July 

August 

September. 

October 

November. 


1915 


65 

65 
65-80 
80-90 

90 


Percentage  increase  from  July  1,  1913,  to  Dec.  1,  1915,  309  per  cent. 
COTTON,  PER  100  POUNDS. 


July ; I  ^,25 

August (') 

September !  25-30 

October 25 

November I  24-30 


12  SI. 00 

('J  1.00 

30  ll.OO-  1.25 

30  I            1.25 

30-35  1.25 


Percentage  increase  from  July  1,  1913,  to  Dec.  1,  1915,  400  per  cent. 

LUMBER,  SOFT  WOOD,  PER  100  POUNDS. 

July : («)  22 

August («)  29 

September (2)       i  29 

October i       («)  29 

November ! 32-38 


76-70 

70 

70 

75-80 

80-95 


2  Rates  not  available. 


I  Rates  not  quoted. 

Increase  from  July  1,  1914,  on  soft  wood  lumber  is  331  per  cent. 
Rate  on  hardwood  lumber  shows  increase  of  415  per  cent. 

Treasury  Department, 
United  States  Customs  Service, 
Port  of  New  York,  November  30,  1916. 
flon.  William  G.  McAdoo, 

Secretary  of  the  Treasury,  Washin'jton,  D.  C. 
Dear  Mr.  Secretary:  Pursuant  to  your  request  last  week  in  Washington  that  an 
estimate  be  made  of  the  export  merchandise  on  hand  at  this  port  and  the  ocean  ton- 
nage available  for  purposes  of  exportation,  the  representatives  of  the  different  trunk 
lines  of  railroads  and  steamship  companies  with  terminals  at  this  port  and  large  manu- 
facturing and  exporting  interests  have  been  consulted  and  their  views  ascertained, 
based  upon  figures  at  their  command.  Below  is  given  the  number  of  cars  held  within 
the  metropolitan  district  awaiting  exportation: 

*      Cars. 

New  York  Central  Railroad 2,  000 

Erie  Railroad 1,  COO 

Baltimore  &  Ohio  Railroad 5,  000 

Delawai-e,  Tyackawanna  &  Western  Railroad 1,  300 

Lehigh  Valley  Railroad 1,  700 

Central  Railroad  of  New  Jersey 1,  300 

Pennsylvania  Railroad 5,  000 

This  is  exclusive  of  grain,  about  7,000,000  bushels,  representing  about  150.000 
tonnage  now^  held  at  this  port  awaiting  exportation.  In  addition  to  the  cars  within 
the  port  of  New  York,  there  are  many  thousands  of  cars  laden  with  export  merchandise 
awaiting  a  chance  to  come  into  the  port.  All  the  railroad  sidings  are  choked  with 
such  freight. 

The  cars  above  referred  to  may  be  said  to  contain  general  merchandise,  chiefly  of 
American  production,  steel  products  and  war  munitions  predominating.  This  large 
number  of  cars  constitutes  a  practically  unprecedented  congestion  which  may  be 
ascribed  to  different  causes,  but  the  great  predominating  cause  is  the  lack  of  vessels 
to  carry  the  freight.  This  lack  is  caused  by  the  withdrawal  of  vessels  ordinarily 
engaged  in  commerce;  the  complete  withdrawal  of  the  German  and  Austrian  com- 
mercial fleets,  and  in  a  smaller  degree  the  destruction  of  commercial  vessels  by  mines 
and  submarines.     An  expert  shipping  authority  at  this  port  has  estimated  the  losses 


SHIPPING  BOARD,  NAVAI,  AUXILIARY,  AND  MERCHANT  MARINE.      225 

from  the  above  causes  as  a1  least  GO  per  cent  of  the  commercial  tonnage  of  the  world. 
In  addition  to  this  the  export  business  of  the  United  States  has  increased  sc  enormously 
as  to  tjreatly  accentuate  the  prevailing  scarcity  of  ocean  tonnage.  It  has  been  repre- 
sented to  us  by  practically  all  of  the  railroad  officials  with  whom  we  have  conversed 
that  the  congestion  in  the  matter  of  cars  at  this  port  wovdd  be  practically  reduced  by 
oO  per  cent  if  needed  ships  might  be  obtained.  If  we  accept  this  percentage  as  cor- 
rect, we  may  figure  as  follows: 

It  is  estimated  that  there  are  30  tons  to  the  average  freight  car,  and  since  the  number 
uf  cars  held  at  this  port,  a'-cording  to  the  statistics  above  gathered,  amoiint  to  17,900, 
it  will  be  seen  that  there  is  a  car  tonnage  at  this  port  of  537,090.  If,  then,  50  per  cent 
of  this  is  due  to  inadequate  export  tonnage  facilities,  it  will  be  seen  that  there  is  a  con- 
gestion  at  this  port  of  2G8,500  tons  directly  due  to  this  shortage. 

Attention  is  invited  to  the  fact  that  the  average  vessel  tonnage  per  day  leaving  the 
port  of  New  York  at  the  present  time  may  be  placed  at  50,000  tons.  In  this  connection 
it  should  be  borne  in  mind  that  vessrd  tonnage  should  be  differentiated  from  car  ton^ 
uage,  in  that  the  former  represents  100  cubic  feet,  while  the  latter  representts  40  cubio 
feet.  In  order,  therefore,  that  intelligent  comparison  may  be  drawn  it  is  proper  thai 
the  vessel  tonnage  should  be  {)laced  at  125,000  per  day.  In  other  words,  a  50,000 
vessel  t(mnage  would  be  equal  to  125,000  car  tonnage.  Taking  into  consideration  the 
total  tonnage  at  this  port  awaiting  exportation — 

General  merchandise 268,  500 

(irain 150, 000 

Total 418, 500 

it  will  be  observed  that  it  would  recpiire  nearly  four  days  average  total  tonnage  from 
this  port  to  ])rovide  exportation  fafilities. 

It  should  be  realized  that  the  actual  conditions  of  to-day  would  be  duplicated 
to-morrow  or  the  next  day,  since  there  are  held  t>utside  of  the  immediate  district  of 
New  York  thousands  of  cars  awaiting  opportunity  for  entry  here.  Under  the  circum- 
stances it  is  my  opinion  that  the  piesent  e.^port  tonnage  facilities  do  not  meet  more 
than  25  per  cent  of  the  present  demand.  Experts  state  that  the  congestion  at  this 
port  will  increase  in  the  near  future  and  that  ocean  freight  rates  will  be  higher  than 
ever  before. 

Attention  is  invited  to  the  following  excerpt  from  the  "Literary  Digest"  of  a  recent 
issue,  which  is  in  a  measure  in  agreement  with  the  facts  as  ascertained  upon  investi- 
gation. In  fact,  the  conclusions  would  be  practically  similar  except  that  the  greatest 
degree  of  conservatism  has  been  exercised  in  the  formulation  of  our  conclusions: 

''The  railroads  coming  into  New  York  are  handling  the  largest  amount  of  trafBe  iu 
their  history,  and  the  congestion  at  terminals  here  in  the  next  two  or  three  months  ie 
likely  to  be  the  greatest  ever  seen.  This  will  be  due  to  the  inability  of  ship  lines  to 
move  the  freight  sent  to  the  city,  which  is  already  sufficient  to  fill  five  times  over  every 
vessel  available  for  export  purposes." 

In  the  conduct  of  the  investigation  it  was  ascertained  that  present  conditions  are 
such,  owing  to  the  extraordinary  high  rate  of  freight  now  levied  by  steamship  com- 
panies, that  certain  American  products  are  completely  shut  out  from  exportation. 
This  is  due  to  the  fact  that  merchandise  of  a  comparatively  bulky  nature  and  small 
unit  value  is  unable  to  meet  the  exorbitant  freight  rates  at  the  present  time.  To 
illustrate  the  degree  in  which  rates  have  advanced,  I  may  state  that  cotton,  which  was 
hitherto  transported  to  the  United  Kingdom  at  from  18  to  20  cents  per  hundred  and  to 
Mediterranean  ports  at  25  cents  per  hundred  is  now  assessed  in  both  cases  at  $1.50  per 
hundred. 

I  may  further  state  that  all  freight  rates  have  been  advanced  about  500  per  cent, 
and  in  some  instances  very  much  higher.  As  an  illustration,  the  value  of  a  barrel  of 
lubricating  oil  is  about  $'G.  The  freight  rate  to  Mediterranean  ports  was  formerly 
from  75  cents  to  $1  per  barrel.  To-day  the  freight  rate  is  from  $5  to  $8  per  barrel, 
easily  exceeding  the  value  of  the  article.  A  very  large  list  of  similar  instances  could  be 
enumerated.  The  agent  of  one  of  the  largest  steamship  lines  in  New  York  stated  that 
he  had  recently  purchased  several  steamers  which  had  been  relegated  to  the  scrap  heap, 
paying  more  than  three  times  their  value  for  them.  He  estimated  that  at  present 
freight  rates  the  ve.ssels  would  earn  the  purchase  price  in  two  or  three  trips.  He 
further  stated  that  this  condition  would  become  more  acute  in  the  immediate  future. 
These  facts  afford  incontrovertible  evidence  of  the  insufficient  ocean  tonnage  at  this 
port,  since  the  rates  governing  freight  movements  are  inevitably  subject  to  the  law  of 
supply  and  demand. 

Yours,  faithfidly, 

Dudley  Field  Malome,  CollccWr, 


226      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Basis  of  figuring. — General  merchandise,  30  tons  to  the  car;  grain,  37J  bushels 
to  the  ton,  47  cubic  feet  to  ton;  car  tonnage,  40  cubic  feet;  ocean  tonnage,  100 
cubic  feet. 

I  have  also  a  copy  of  a  resolution  adopted  by  the  Canners  League 
of  California  relative  to  the  need  of  an  American 'merchant  marine, 
together  with  copy  of  a  letter  addressed  to  Asst.  Secretary  Vrooman 
of  the  Department  of  Agriculture  in  connection  with  the  International 
Paper  Co.,  on  the  same  subject. 

(The  resolution  and  copy  of  letter  above  referred  to  are  as  follows :) 

The  Secretary  of  the  Treasury, 

Washington,  January  17,  1916. 
My  Dear  Judge:  I  send  you  herewith  copy  of  a  resolution  adopted  by  the  Canners 
J^eague  of  California  relative  to  the  need  of  an  American  merchant  marine,  together 
with  copy  of  a  letter  addressed  to  Assistant  Secretary  Vrooman,  of  the  Department  of 
Agriculture,  by  the  president  of  the  International  Paper  Co.,  in  connection  with  the 
Bame  subject. 

Faithfully,  yours, 

W.  G.  McAdoo. 
Hon.  J.  W.  Alexander, 

Ifouac  of  Representative.^. 


(Copy.) 


Whereas  the  United   States  has  reached  a  point  in  its  development  where  it   has 
become  ncce.ssary  to  find  new  and  increased  foreign  markets  for  its  products  and 
manufactures  to  insure  the  prosperity  of  the  country,  the  farmer,  the  manufacturer, 
and  the  people  at  large;  and 
Whereas  the  question  of  steamships  to  foreign  countries  is  now  becoming  a  serious 
handicap  upon  our  manufacturers,  owing  to  the  uncertainties  of  freight  rates  and 
the  abnormal  rates  demanded  by  the  ship-owning  interests:  Therefore  be  it 
Resolved  ht/  the  Canners  League  of  California  in  annual  convention  ossemhled,  That  we 
favor  plans  for  the  establishing  of  an  adequate  American  merchant  marine  by  the 
United  States  Government,  and  that  we  favor  legislation  by  the  ])resent  Congress  now- 
assembled  in  A\'ashington  that  will  relieve  the  tremendous  burden  from  which  the 
manufacturers  are  now  suffering  in  their  efforts  to  get  goods  to  their  foreign  markets, 
and  that  we  favor  laws  that  will  lead  to  the  establishing-  of  an-adequate  American 
merchant  marine  by  the  L'nited  States  Government  which  can  be  used  as  a  naval 
auxiliary  in  time  of  war  but  in  time  of  peace  can  be  used  for  the  preservation  and 
development  of  our  industries. 

International  Paper  Co.,  30  Broad  Street, 

New  York,  January  8,  1916. 
Subject:  Lack  of  shipping  facilities. 

Hon.  Carl  S.  Vrooman, 

Assistant  Secretary  Department  of  Agriculture,  Washingtoii,  D.  C. 

Dear  Sir:  Replying  to  inquiry  of  January  5,  it  is  true  that  this  company  has  expe- 
rienced great  difficulty  and  indeed,  inability  to  secure  bottoms  for  foreign  shipments 
in  the  last  few  months. 

At  this  time  this  company  has  or  can  secure  immediately  orders  for  more  than 
7,000  tons  of  its  paper  for  shipment  to  France,  Argentina,  and  Australia,  if  space  could 
be  secured. 

The  nominal  quotations  for  freights  at  present  are  four  to  five  times  above  those 
prevailing  before  the  war,  and  are  so  great  as  to  be  prohibitive — in  some  instances  the 
freiglit  being  almost  equal  to  the  value  of  the  merchandise  f.  o.  b.  It  is  probable, 
however,  that  a  very  substantial  foreign  business  can  be  built  up,  if  bottoms  could  be 
eecured  on  any  reasonable  terms. 
Yours,  very  truly, 

P.  T.  Dodge,  President. 


SHIPPING  BOARD^  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE.      227 

Also  a  communication  of  Mr.  George  S.  Taylor,  secretary  of  the 
Society  for  the  Development  of  American  Shipping  (Inc.),  of  New 
Orleans,  addressed  to  me,  giving  a  transcript  of  the  published  ocean 
freight  rates  on  the  leading  commodities  exported  through  New  Or- 
leans which  were  in  effect  just  prior  to  the  outbreak  of  the  war  in 
Europe  and  also  the  rates  prevailing  at  stated  periods  since  that  time. 
There  is  attached  a  clipping  from  the  New  Orleans  Times-Picayune 
of  January  22,  1916,  on  the  same  subject. 

(The  letter  and  newspaper  clipping  above  referred  to  are  as  follows :) 

[The  Society  for  the  Development  of  Am"Ti?an  Shipping  (Inc.),  New  Orleans.    Office  of  the  secretary, 

304,  305,  Hennen  Annex.] 

January  22,  1916. 
Hon.  J.  W.  Alexander, 

Chairman  Committee  on  the  MercHant  Marine,  Washington,  D.  C. 
Dear  Sir:  Responding  to  yoii.r  request  of  January  15,  we  are  pleased  to  supply 
transcript  of  published  ocean  freight  rates  upon  the  leading  commodities  exported 
through  New  Orleans  In  effect  just  prior  to  tlie  outbreak  of  the  war  in  Europe,  also 
of  the  rates  prevailing  at  stated  periods  since  that  time: 


[In  cents  per  hundred  pounds.] 

July  4, 1914. 

Feb.  6, 1915. 

Dec.  18, 1915. 

Jan.  15, 1916. 

Cotton  to  T  iverpool 

28 
20 
22 
11 

125 
95 
95 
32 

200 

130 

135 

None. 

300 

Luniher  to  Rotterdam  

155 

Flour  to  Genoa 

None. 

None. 

The  advance  in  freight  upon  other  commodities  to  other  ports  progressed  in  rela- 
tive proportion,  the  maximum  prevailing  at  the  present  date. 

Upon  the  declaration  of  war  over-seas  commerce  suspended,  being  resumed  cau- 
tiously and  gradually  as  contending  cruisers  disappeared  from  the  sea. 

Gradually  increasing  rates  of  freight  developed  as  the  destruction  and  diversion 
of  tonnage  became  more  and  more  a  factor  in  the  disturbed  ralationsh'.p  between 
supply  and  demand,  with  the  consequent  absence  of  competition. 

Foreign  commerce  through  New  Orleans  is  transported  almost  exclusively  by 
European  steamship  companies,  the  serA-ice  being  augmented  by  tramp  cargo  carriers, 
also  of  foreign  ownership.  Numbers  of  these  vessels  have  gradually  been  withdrawn 
from  service  in  the  Gulf,  with  freight  rates  advancing  proportionately. 

Much  uncertainty  prevails  at  the  present  time.  Rate  quotations  and  space  offer- 
ings are  subject  to  immediate  acceptance,  or  are  being  refused  entirely.  The  demand 
for  bottoms  ^.s  heavy  and  continuous.  A  vessel  in  convenient  position  may  practically 
name  her  own  terms,  then  collect  the  freight  in  advance.  Ship's  time  has  grown  to 
such  value  that  the  few  additional  steaming  days  required  to  serve  ports  in  the  Gulf 
Jempt  vessels  to  shorten  the  voyage  in  faA'or  of  Atlantic  ports,  where  cargoes  are 
either  waiting  or  will  be  rushed  tliere  if  the  bottoms  are  offered. 

If  we  have  abbreviated  too  freely  and  a  more  exhaustive  statement  is  required, 
please  command  us.     Our  serA-ices  are  yours  when  and  where  needed. 
Very  respectfully, 

Geo.  S.  Taylor,  Secretary. 


[The  New  Orleans  Times-Picayune,  Jan.  22, 1916.) 

LIVERPOOL    COTTON    RATE   IS   INCREASED   TO   $3  PER   HUNDRED — STAPLE    CAN    BE    SENT 
CHEAPER   FROM    NEW    ORLEANS   TERRITORY   VIA    NEW    YORK. 

A  rate  of  $3  per  100  pounds  on  cotton  from  New  Orleans  to  Liverpool  February,  and 
March  shipments,  was  the  quotation  sent  out  by  freight  traffic  managers  of  local  rail 
lines  to  their  agents  in  the  cotton  belts  of  Louisiana,  Mis.sissippi  and  Texas  Friday 
morning,  and  from  the  fact  that  the  rate  is  quoted  so  far  in  advance,  railroad  and  steam- 


228      SHIPPING  BOARD,  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

ship  men  and  shippers  generally  are  inclined  to  the  belief  that  ocean  tonnage  is  liabli 
to  become  scarcer  even  that  it  is  to-day. 

While  the  rate  at  New  Orleans  remains  at  the  high  record  market  set  for  Januarj 
shipments,  the  Liverpool  rate  from  New  York  on  cotton  has  shown  a  considerable  fall. 
The  latest  quotation  from  New  York  on  Liverpool  cotton  was  $2.50  per  100  pounds,  50 
cents  cheaper  than  the  New  Orleans  rate,  and  combining  the  rail  and  water  rate  from 
Ulterior  points  in  Mississippi  and  North  Texas  to  points  to  Liverpool,  it  is  far  cheaper 
to  ship  the  cotton  through  New  York  than  through  New  Orleans,  although  the  cotton 
belongs  in  what  is  known  as  New  Orleans  territory. 

The  New  York  rate  on  cotton  to  Liverpool  went  up  to  $2.75,  and  the  difference, 
combining  the  rail  and  water  rate  between  New  York  and  New  Orleans  was  not  con- 
siderable. But  the  decrease  of  25  cents  on  the  New  York  rate  puts  New  Orleans 
practically  out  of  the  running,  and  railroad  traffic  managers  are  at  their  wit's  end  to 
find  a  solution  of  the  problem. 

The  rate  from  interior  points  in  Mississippi  to  New  Orleans,  that  is,  from  the  cheap- 
est points,  is  23  cents  ship  side.  The  23  cents,  combined  with  the  S3  ocean  charge, 
makes  the  through  export  rate  to  Liverpool  via  New  Orleans  83.23.  The  rail  rate  on 
the  same  cotton  to  New  York  is  51.06  cents,  and  this,  combined  with  the  ocean  rate  of 
*  $2.50,  makes  the  through  rate  to  Liverpool  ^da  New  York  $3.0106,  a  saving  of  more  than 
20  cents  per  100  pounds. 

The  difference  on  the  North  Texas  cotton  through  the  two  ports  is  even  greater. 
The  rate  on  this  cotton  by  rail  is  52J  cents  per  100  pounds  to  New  Orleans,  and  the  com- 
bined rail  and  water  rate  from  North  Texas  points  through  New  Orleans  to  Liverpool 
figures  out  exactly  $3.52i.  The  rate  on  the  North  Texas  cotton  to  New  York  by  rail 
is  74  cents,  and  this,  add'ed  to  the  S2.50  ocean  rate  to  Liverpool,  makes  a  through  rail 
and  water  rate  of  ?3.24,  or  a  saving  of  28  cents  per  100  pounds. 

It  was  hoped  by  local  interests  that  the  §3  quoted  for  January  shipments  of  cotton 
out  of  New  Orleans  would  be  decreased  at  least  to  a  figure  thai  would  put  New  Or- 
leans on  a  parity  with  New  York  on  what  is  really  New  Orleans  cotton.  But  the  war- 
rins;  Governments  have  confiscated  so  many  ships  that  ocean  tonnage  is  daily  becoming 
scarcer,  and  it  was  found  necessary  Friday  to  put  up  the  $3  quotation  for  February  and 
March  cotton. 

New  York  has  more  ships  than  New  Orleans,  and  the  ships  loading  Avith  machinery 
and  heavy  war  material  are  glad  to  take  lighter  freight  as  fillers.  While  cotton  is 
required  to  be  compressed  to  a  density  of  22-h  pounds  per  cubic  foot,  it  is  considered 
as  light  freight  compared  with  the  heavy  iron  and  steel  shipments,  and  is  taken  by  the 
ships  in  New  York  as  cargo  fillers.  However,  it  is  being  handled  as  first  class  freight, 
and  satisfactory  insurance  rates  are  obtained  on  it. 

In  issuing  notices  Friday  on  February  and  March  quotations  on  Liverpool  cotton, 
the  railroads  made  it  clear  that  the  tonnage  was  limited. 

Also  copy  of  a  letter  received  by  the  Secretary  of  the  Treasury 
from  the  Chamber  of  Commerce  of  Porto  Rico  giving  the  steamship 
situation  between  the  United  States  and  that  island,  together  ^\^th 
copy  of  a  letter  from  Mr.  Daniel  Kelleher,  of  Seattle,  Wash.,  in  regard 
to  the  lumber  export  situation  in  the  Northwest. 

(The  letters  above  referred  to  are  as  follows:) 

Thk  Secretary  of  the  Treasury,  * 

Waahingfon,  Deceiiib/r  24.  1915. 
My  Dear  Juixjk:  I  am  sending  you  herewith,  for  your  information,  copy  of  a  letter 
received  from  the  Chamber  of  Commerce  of  Porto  Rico  dealing  with  the  steamship 
sitxiation  between  the  United  States  and  that  island,  and  also  copy  of  one  from  Mr. 
Daniel  Kelleher.  of  Seattle,  Wash.,  in  regard  to  the  lumber  export  situation  in  the 
Northwest. 

I  thought  you  \v(  uld  like  to  have  this  data. 
Siiirerelv,  voiir><. 

W.  C.  M(Adoo. 

Hon.  J.  W.  Alexander. 

Unnat  of  Rcvre.tfntntiif.'!. 


SHIPPING  BOARD^  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE.      229 

ICamara  de  Comercio  de  Puerto  Rico,  fundada  en  1875  y  reformada  en  abril  de  1899;  San  Juan,  P.  R.;  presi- 
dente,  Don  Benito  Zalduondo;  vice  presidentes,  Don  Eudosio  de  la  Cuetara,  Mr.  John  M.  Turner;  sec- 
retario-tesorero,  Don  Arturo  Carreras.] 

December  8,  1915. 
Hon.  William  G.  McAdoo, 

Secretary  of  the  Treasury,  Washington,  D.  C. 

Sir;  We  coufirm  the  letter  which  we  had  the  honor  of  addressing  you  on  November 
19  last,  and  now  take  the  liberty  of  inclosing  copy  of  a  communication  we  wrote  on 
the  3d  idem  to  Gen.  Frank  Mclntyre,  Chief  of  the  Bureau  of  Insular  Affairs,  Wash- 
ington, D.  C. 

We  are  desirous  that  you  become  thoroughly  cognizant  of  the  serious  injury  which 
the  steamship  monopoly  pljdng  out  of  here  is  causing  our  commerce  and  the  export 
trade  of  the  United  fetates  proper,  the  last  exemplification  being  an  arbitrary  increase 
of  150  pr-r  cent  on  Porto  Ivico  sugar  destined  to  the  United  States. 

In  addition  to  this  the  steamship  companies,  and  more  particularly  the  New  York 
&  Porto  Kico  Steamship  Co.,  have  announced  publicly  that,  beginning  with  January 
3,  1916,  they  purpose  making  changes  in  other  freights  between  the  United  States 
and  Porto  Kico.  They  do  not  specify'  the  tendnecy  of  such  changes,  but  we  have 
received  information  from  private  but  reliable  sources  that  the  same  will  consist  of 
an  increase  of  25  to  30  per  cent  over  the  already  high  rates  charged. 

The  most  adverse  feature  from  the  viewpoint  of  our  trade  interests  is  the  fact  that 
having  developed  a  plan — the  outgrowth  (>i  one  year's  study  and  labor — to  start  our 
own  steamship  line  at  this  time,  the  combine  has  tlireatened  to  wage  a  relentless  and 
ruinous  rate  war  if  we  venture  to  carry  our  plan  into  execution. 

This  is  why  we  feel  emboldened  to  crave  the  protection  of  the  United  States  Govern- 
ment, so  that  our  interests  may  not  be  left  open  to  the  attacks  of  the  steamship  monop- 
oly, which,  actuated  by  inordinate  greed,  seeks  to  sweep  aside  all  attempts  to  establish 
reasonable  freights,  and  why  we  respectfully  petition  that  a  recommendation  be  made 
to  the  Congress  to  enact  legislation  regulating  the  freight  rates  between  Porto  Rico 
and  the  United  States  under  the  supervision  of  the  national  Executive. 

Such  an  act  of  Congress  would  be  the  greatest  boon  that  could  be  conferred  upon  the 
trade  element  and  people  of  Porto  Rico,  and  the  chamber  of  commerce  therefore 
prays  that  you  will  interpose  your  valuable  influence  to  such  end. 

We  ask  you,  Mr.  McAdoo,  kindly  to  pardon  our  insistence,  but  you  will  admit  that 
in  order  to  procure  justice  it  must  be  sought  through  the  proper  channel. 

Please  accept  our  thanks  in  advance  for  all  that  you  may  do  in  our  behalf. 
Respectfully, 

f.sEAi..]  Chamber  of  Commerce  of  Porto  Rico, 

By  B.  Zalduondo,  President. 


(Copy.) 

December  3,  1915. 
Gen.  Frank  McIntyre,  Washington,  D.  C. 

My  Dear  General:  Having  heard  of  your  return  from  the  Philippines,  I  gladly 
avail  myself  of  the  present  opportunity  to  convey  to  you  the  most  respectful  and  cordial 
greetings  of  the  above  chamlsor  of  commerce. 

On  different  occasions  we  have  written  Secretary  of  Commerce  Redfield  asking  him 
to  bear  in  mind  the  urgent  necessity  of  recommending  to  the  present  Congress  the 
passage  of  a  legislative  measure  providing  for  Government  regulation  of  ocean  freight 
rates  between  this  island  and  the  United  States.  A  promise  to  the  desired  effect  was 
made  by  Secretary  Redfield  to  the  committee  of  the  undersigned  chamber  of  com- 
merce, which  had  the  honor  of  calling  on  him  during  February  last,  and  we  have  no 
dotibt  that  he  will  comply  therewith. 

You  will  remember  the  complaints  which  we  filed  with  the  said  functionary  in 
Washington  at  that  time.  Subsequently  we  have  forwarded  considerable  corroborative 
evidence  anent  the  inexplicable  rise  in  ocean  freights  between  here  and  there  for  want 
of  regulative  legislation. 

We  are  now  constrained  to  submit  a  new  datum,  which  will  undoubtedly  sway  the 
national  administration  in  our  favor  and  induce  the  Secretar>^  of  Commerce  to  include 
in  the  Government  legislative  program  a  nmeasure  governing  traffic  changes  as 
praved  for. 

We  have  reference  to  the  following: 

The  agencies  of  the  steamship  companies  which  are  operating  a  carrying  servic 
between  Porto  Rico  and  the  United  States  have  received  instructions  from  their 
respective  head  offices  in  New  York  to  eharge  30  cents  for  every  100  punds  of  sugar 


230      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

shipped  from  this  island  to  the  United  States.  The  freight  cliarged  up  to  this  time  is" 
12  cents,  and  in  corroboration  of  our  statement  we  are  prepared  to  furnish  the  United 
States  Government  signed  contracts  entered  into  by  and  in  the  possession  of  several 
shippers  of  svigi^.r  bas^d  on  a  consideration  of  12  cents  for  every  100  pounds. 

The  island  of  Porto  Rico  will  produce  during  the  present  crop  at  least  3,000,000  sacks 
of  sugar  containing  250  pounds  each.  Of  this  output  about  2.000,000  sacks  will  go  to 
the  United  States.  "With  the  freight  at  30  cents  per  100  pounds,  the  carriage  of  each 
sack  will  cost  75  cents,  as  against  30  cents  paid  at  present.  So  that,  reckoning  the 
increase  of  45  cents  a  sack  on  2,000,000  sacks,  we  find  our  trade  balance  will  be  reduced 
by  $900,000,  which  will  go  to  swell  the  coffers  of  the  monopolizing  steamship  com- 
panies plying  out  of  here,  to  the  grave  detriment  of  this  unfortunate  island. 

This  chamber  of  commerce  submits  that  it  is  neither  equitable  nor  lawful  that 
ocean  carriers  should  be  allowed  to  raise  the  freight  of  a  staple  product  like  sugar  150 
per  cent  at  24  hours'  notice  and  such  high  procedure  on  their  part  is  made  possible  only 
by  the  lack  of  adequate  and  necessary  legislation  for  the  regulation  of  freights. 

The  commerce  of  the  United  States  is  safeguarded  by  the  interstate  commerce  act, 
which  proWdes  for  and  creates  a  commission  to  enforce  the  regulation  of  interstate 
freights.  But  Porto  Rico,  which  is  included  under  the  coastwise  regulations  does  not 
enjoy  the  benefits  of  this  or  any  other  analagous  act,  and  on  the  other  hand  is  deprived 
of  the  advantages  accruing  to  freight  carried  in  foreign  bottoms.  It  is  thus  left  naked 
to  the  machinations  of  the  steamship  combine  which  controls  our  traffic,  and  divested 
of  means  to  neutralize  the  disastrous  effects  resulting  therefrom. 

In  view  of  the  foregoing,  this  chamber  of  commerce  respectfully  and  earnestly 
petitions  Gen.  Mclntyre  and  the  Secretary  of  Commerce,  as  well  as  the  other  officials  of 
the  national  administration,  to  recommend  to  the  present  Congress  the  passage  of 
appropriate  legislation  authorizing  Government  regulation  of  freight  rates  and  of  other 
conditions  affecting  the  transportation  trade  between  this  island  and  the  United 
States. 

For  the  past  12  months  we  have  been  urgently  petitioning  your  bureau  and  the  Sec- 
retary of  Commerce  to  recommend  the  adoption  of  such  legislation,  and  we  refuse  to 
be  Jeve  that  compliance  with  our  just  request  will  be  longer  deferred. 

You  are  at  liberty  to  refer  this  letter  to  Secretary  of  Commerce  Red  field  or  to  any 
other  Government  official,  and  we  respectfully  invite  and  confidently  hope  for  your 
valuable  cooperation  in  support  of  the  petition  of  this  chamber  of  commerce  in  fur- 
therance of  the  general  interests  of  the  Island  of  Porto  Rico. 
Respectfully, 

Chamber  of  Commerce  of  Porto  Rico, 
By  B.  Zalduondo. 


[The  Seattle  National  Bank,  Seattle,  Wash.  Daniel  Kelleher,  chairman  of  the  board:  Frederic  K.  Stnive 
president;  J.  W.  Spancler,  vice  president;  R.  V.  Ankeny,  vice  president;  E.  G.  /.mes,  vice  president; 
W.  S.  Peachy,  cashier:  H.  C.  MacDonald,  assistant  cashier:  C.  I..  LaOrav^e.  assistant  ca.shier;  J.  H.  New« 
berger,  assistant  cashier.] 

December  7,  1915. 
Hon.  W.  G.  McAdoo, 

Secretary  of  the  Treasury.  Wushington,  D.  C. 

My  Dear  Mr.  McAdoo:  I  was  very  sorry  to  lie  obliged  to  telegrajih  you  to-day 
that  I  could  not  attend  the  meeting  of  the  return  visit  committee  in  >.ew  York  next 
week.  I  have  but  recently  returned  from  ray  trip  to  the  East  and  the  South,  and 
find  it  impossible  to  get  away  again  at  this  season  of  the  year. 

It  was  a  gi'eat  disappointment  to  me  that  I  was  not  in  the  city  when  you  were  here 
in  Octol:er.  I  want  to  say,  however,  that  your  \isit  has  done  a  great  deal  of  good 
here,  and  I  have  heard  many  favorable  comm-ents  on  your  remarks  while  here. 

I  was  very  much  interested  in  the  talk  we  had  in  Washington  in  September  on  the 
shipping  bill.  We  certainly  need  something  of  that  kind  to  l)e  put  through  immedi- 
ately, and  I  trust  that  you  will  be  able  to  effect  the  proper  legislation  to  that  end. 
The  whole  country  seems  very  prosperous  excepting  the  Pacific  coast.  We  are  still 
Buffering  out  here  from  the  bad  effects  of  the  war,  and  have  had  really  no  good  effects. 
The  lumber  industry  has  not  picked  up  here,  as  it  has  in  the  middle  and  Southern 
States,  and  throughout  the  Eastern  States.  There  is  a  little  better  feeling,  but  really 
not  very  much  improvement.  The  shipping  of  our  lumber  by  cargo  is  cut  off  to  the 
extent  of  aljout  500,000,000  feet  a  year.  This  is  on  account  of  the  lack  of  ships.  The 
cutting  off  of  this  Inisiness  is  just  enough  to  spoil  the  rest  of  the  lumber  business  here. 
Personally,  I  can  not  see  any  hope  for  recovery  on  this  until  the  war  is  over  or  until 
we  get  by  proper  legislation  some  ships  to  transport  om-  lumber.  The  only  other 
product  we  would  have  out  here  to  sell  on  account  of  the  war  would  be  our  wheat, 
and  the  ship  rates  for  transporting  this  to  Europe  are  practically  prohibitive.  For 
many  reasons,  outside  of  our  local  reasons.  I  hope  you  will  be  successfiil  in  shaping 


SHIPPING  BOARD,  NAVAL  AUXIT,IARY,  AND  MERCHANT  MARINE.      231 

up  some  legislation  to  give  the  United  States  ships  in  which  to  do  our  business.  It 
is  certainly  a  shame  that  in  this  great  country  we  practically  have  no  ships  to  do  our 
foreign  commerce. 

If  I  can  be  of  any  service  to  you  at  this  end  of  the  line  at  any  time,  please  do  not 
hesitate  to  call  upon  me. 

Very  respectfully,  yours. 

Danikl  Kelleher. 

I  have  also  a  letter  from  the'Indiana  Quartered  Oak  Co.,  addressed 
to  the  Secretary  of  Commerce,  relatmg  to  difficulties  arising  under 
the  present  form  of  bill  of  lading  which  we  think  would  be  corrected 
by  the  provisions  of  this  bill  by  placing  our  shipping  under  some 
responsible  governmental  control,  as  proposed. 

(The  letter  above  referred  to  is  as  follows:) 

(Indiana  Quartered  Oak  Co.,  (Inc.),  wholesale  lumber,  52  Vanderbill  Avenue,  New  York,  WlUard  Wlnslow, 
president  and  treasurer;  Herbert  MeM,  jr.;  vice  president;  M.  G.  Taylor,  secretary.] 

December  21,  1915. 
Mr.  Wm.  C.  Redfield, 

Secretary  of  Commerce  and  Labor,  Washiyiglon,  D.  C. 
Dear  Sir:  We  wish  to  call  your  attention  to  a  matter  which  may  come  within  your 
province,  or  possibly  that  of  the  Interstate  Commerce  Commission,  viz,  that  steamship 
companies  taking  lumber  from  Atlantic  i^orts  refuse  to  give  "clean"  bills  of  lading 
unlesf  the  shipper  is  a  member  of  the  National  Lumber  I^xporters'  Association.  This 
association  compelled  the  steamship  companies  to  issue  and  sign  bills  of  lading  -ndthout 
inserting  the  clause  "more  or  less,"  "shipper's  count,"  or  some  phrase  of  that  sort, 
which  enable  the  steamship  companies  to  refuse  to  make  good  any  shortage.  If  we 
get  a  clean  bill  of  lading,  we  can  make  the  steamship  company  produce  the  number  of 
pieces  or  bundles  shipped  or  pay  the  difference.  The  steamship  companies  will  not 
state  openly  that  such  a  condition  prevails,  but  tlus  is  a  fact,  that  they  discriminate 
between  members  and  nonmembers  of  the  National  Lumber  Exporters'  Association. 
We  were  members  ot  this  association  for  several  years,  but  resigned  because  we  only 
export  occa.^ional  carloa'ds  of  certain  specialties,  and  the  dues  for  membership  in  the 
asr^ociation  amount  to  a  considerable  sum.  We  do  not  think  that  lumber  exporters 
should  be  compelled  to  be  members  of  the  export  asvSO(  iation  in  order  to  get  fair  treat- 
ment. As  a  matter  of  fact,  there  is  practically  always  a  shortage  claimed  when  the 
bill  of  lading  is  stamped  "more  or  less,"  or  words  to  that  effect.  The  practical  result 
of  this  I  onditiou  is  that  the  profits  on  lumber  exported  are  just  about  used  up  by 
shortages  in  every  case.  The  steamship  companies  count  the  number  of  btindles  or 
pieces  in  every  case,  but  where  the  bills  of  lading  bear  the  clause  "more  or  lers," 
etc.,  they  do  not  take  the  trouble  to  handle  the  goods  properly. 
Yours,  very  truly, 

Indiana  Quartered  Oak  Co., 
WiLLARD  WiNSLOw,  President. 

Also  a  letter  from  Paul  C.  Hanisch  &  Co.,  American  Leather 
Manufacturers'  Agents,  of  46  St.  Thomas  Street,  Bermondsey,  Lon- 
don, in  regard  to  the  exacting  of  excessive  freight  rates. 

(The  letter  above  referred  to  is  as  follows) : 

Department  of  Commerce, 
bure.at-  f)f  p'oreion  and  domestic  commerce, 

Washington,  December  21,  191.5. 
Hon.  J.  W.  Alexander, 

Chairman  Committee  on  Merchant  Murine  and  Fisheries, 

House  of  Representatives,  Washinyton,  D.  C. 
Dear  Sir:  I  am  inclosing  for  the  information  of  your  committee  and  for  any  atten- 
tion which  may  seem  advisable  a  copy  of  a  letter  from  Messrs.  Paul  C.  Ilanisch  &  Co., 
46  St.  Thomas  Street,  Bermondsey,  London,  and  inclosure,  in  regard  to  excessive 
freight  rates. 

Very  truly,  yours, 

E.  IC.  Pratt,  Chief  of  Bureau. 


232      SHIPPING   BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

(Copy.) 

[Paul  C.  Haniseh  A  Co..  .\merican  Leather  Manufacturers'  Aj,'ents,  46  St.  Thomas  Street,  Bermondsey, 

London.] 

December  2.  19L5. 
The  Commercial  Government  Department, 

Washington,  U.S.A. 
Gentlemen:  We  are  strictly  American  importers  of  American  leathers.  It  seems 
to  us  it  is  about  time  the  American  Government  took  some  steps  in  ref;:ulating  freight 
rates  of  the  American  liners.  We  have  been  paying  advances  right  along  on  freight 
rates.  We  are  getting  goods  through  English  lines  and  are  paying  from  75s.  to  lOOs. 
per  measurement  ton  for  our  goods,  which  are  glaced  kid  and  calf  made  in  America 
by  the  leading  houses.  The  war  risk  is  verv  little  nowadays,  and  that  is  insured  by 
the  purchasers  in  America.  War  and  marine  risk  combined,  we  are  paying  only 
1^  per  cent.  For  the  privilege  of  shipping  on  an  American  ship,  in  common  American 
phrase,  we  are  "soaked  "  by  the  American  lines.  We  inclose  you  a  letter  we  received 
on  our  complaint;  the  contents  will  speak  for  itself.  We  are  taking  this  matter  up 
with  your  department,  and  ask  you  to  look  into  it  and  see  if  something  can  not  be 
done  to  stop  these  outrageous  charges  that  the  American  line  is  making.  W^e  have 
instructed  all  our  shippers  not  to  .ship  a  single  thing  in  future  through  the  American 
line. 

Yours,  truly, 

Paul  C.  IIanj.sch  &  Co. 


(Copy.') 
|.\merifan  E.xpress  Co.,  Foreign  Department,  10  James  Street,  Liverpool.] 

.VovEMhtKR  :;o,  19  ir.. 
Messrs.  Paul  C.  Hanlsch  &  Co., 

4fi  St.  Thomas  Street,  Bennondbcy,  Lonrhn. 
DtAR  SiR;>:  We  are  in  receipt  of  your  letter  of  the  L'9th  in.stant  regarding  rate,  and  beg 
to  state  we  have  no  control  whatever  over  the  ocean  freight.  The  actual  rate  paid  by  is 
to  the  steamsliip  company  was  79  cents  per  cubic  fcot,  and  w  e  regret  xerv  much  not  being 
able  to  rduce  it.  We  are  just  as  concerned  over  high  ocean  freights  of  this  kind  as  you 
are  yourselves,  as  we  know  how  it  interferes  uith  business,  but  at  the  present  time 
when  space  in  the  steamers  is  at  a  premium  the  steamship  companies  are  taking 
advantage  of  the  position  to  increase  their  rates,  which  as  far  as  we  are  concerned  we 
do  not  consider  just,  but  we  have  nfi  option  but  to  accept  the  situation. 

\^'ith  regard  to  the  charge  for  cii.stonis  entry  and  attendance,  we  believe  if  you 
could  see  the  additional  time  and  trouble  expended  on  clearance  of  goods  at  Tiverpool 
that  you  woiUd  not  for  a  moment  object  to  pay  the  charge  of  is.  The  quays  are  greatly 
congestel.  and  it  frequently  takes  one  of  our  men  half  a  day  to  locate  two  or  three 
jiackages  due  to  the  cargo  of  several  steamers  being  on  one  quay.  We  will,  however, 
reduce  this  item  to  '2s.  fid.,  and  shall  be  ple.isei  to  receive  remittance  for  the  amount 
of,£filOs.2d. 

We  believe  you  will  get  full  sati.-'fnction  with  re:4ard  to  the  ocean  raie  if  you  will 
communicate  with  .senders. 
Yours,  truly. 

American  Express  Co. 
.  Ay,'nf. 

A  letter  from  J,  H.  Arnold,  commercial  attache  of  the  American 
Legation  at  Pekin,  forwarding  copy  of  a  resolution  passed  by  the 
executive  committee  of  the  American  Association  of  North  China, 
Tientsin  branch,  which  is  accompanied  by  a  letter  from  Mr.  E.  E, 
Pratt,  chief  of  the  Bureau  of  Foreign  and  Domestic  Commerce  of  the 
Department  of  Commerce,  to  the  secretary. 

(The  communications  and  resolution  above  referred  to,  are  as 
follows:) 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      233 

Department  of  Commerce, 
Bureau  or  Foreign  and  DoMEtsric  Commerce, 

Waskinglov,  Februanj  7,  1916. 
The  Secretary  of  Commerce' 

The  attached  copy  of  a  resolution  ol  the  American  Association  or  North  China, 
Tientsin  branch,  has  been  forwarded  to  the  bi'.reau  w-ilh  the  request  that  it  be  handed 
to  you  for  your  personal  consideration.  The  lollowing  extract  from  a  letter  from 
Commercial  Attache  Arnold  will  also  doubtless  be  of  interest  to  you  in  connection 
with  the  pioposed  administration  shipping  bill: 

"As  repeatedly  po'.nted  out  by  ihis  office,  the  P^uropean  war  has  created  opportuni- 
ties in  China  for  the  expansion  of  American  trade  unparalleled  in  the  history  of  this 
trade.  Our  principal  competitors  in  the  China  trade  are,  on  account  of  the  war, 
either  forced  out  of  the  market  almost  entirely,  or  sadly  handicapped  because  of  war 
conditions  at  home.  Yet  in  the  face  of  the  greatest  opportunity  ever  presented  to 
us  in  this  market,  we  find  ourselves  in  the  extremely  unfortunate  conditions  of  being 
obliged  to  depend  upon  the  shipping  facilities  of  a  competitor  nation  whose  arbitrary 
acaons  in  connection  with  extending  these  facilities  to  other  than  its  own  nations  Is 
calculated  to  reduce  to  a  minimum  the  advantages  which  the  war  has  created  tor  us 
in  China. 

"It  has  been  indeed  unfortunate  lor  our  commercial  interests  in  China  that  the 
American  flag  should  have  disappeared  from  the  Pacific  at  a  time  when  it  could  mean 
the  most  for  us.  Never  in  the  nlstory  of  our  trade  with  China  have  we  needed  Ameri- 
can ships  more  than  we  now  do,  and  never  in  the  history  of  this  trade  could  Amer'can 
ships  have  done  more  for  us  than  during  the  present  European  war.  It  ia  to  l)e  hoped 
that  the  day  may  not  be  far  distant  when  our  merchants  in  China  may  no  longer  be 
able  to  point  to  the  lack  of  American  ships  as  the  main  retarding  influence  in  our 
trade  expansion  in  this  part  of  the  world." 

E.  E.  Pratt. 


(Copy.) 

Tientsin,  December  8,  1915. 
3.  H.   Arnold,  Esq., 

Commercial  Attache,  Amtrican  Legation,  Peking. 
Sir:  I  have  been  directed  to  forward  you  copy  of  a  resolution  passed  by  the  exe- 
cutive committee  of  this  association  at  a  meeting  held  on  the  19th  day  of  November, 
1915.     It  is  hardly  necessary  to  mention  that  the  purpose  of  this  association  is  to 
foster,  consolidate,  and  promote  American  interests  in  China. 

Never  before  have  there  been  such  broad  opportunities  for  American  business  in 
China  as  at  present.  Never  before  has  there  been  such  a  full  realization  of  the  dangers 
to  American  business  if  it  is  not  protected  with  the  support  of  the  American  Govern- 
ment. 

The  resolution  deals  with  affairs  as  they  now  §xist  and  shows  clearly  to  those  asso- 
ciated with  American  trade  in  China  that  our  commerce  can  not  expand,  can  not 
even  hold  its  present  position,  unless  we  are  in  a  measure  free  and  independent  of 
shipping  and  banking  facilities  of  competing  nations. 

I  am  instructed  to  request  that  you  kindly  lay  this  matter  before  responsible  home 
officials  explaining  to  them  present  conditions  and  showing  what  will  be  the  future 
state  of  American  trade  if  it  does  not  obtain  the  protection  and  support  of  the  American 
Government. 

Yours,  faithfully, 

The  American  Association  of  North  China,  Tientsin  Branch, 
Secretary. 


(Copy.) 

Whereas  we,  the  American  Association  of  North  China,  Tientsin  Branch,  are  vitally 
concerned  in  promoting  American  interests  in  China,  and 

Whereas  we  note  with  growing  alarm  the  absence  of  ships  flying  the  American 
fl^g  operating  between  the  United  States  and  China  and  the  insufficient  space  allotted 
to  American  concerns  by  ships  of  nationalties  other  than  American  for  the  conveyance 
of  cargo  to  and  from  the  United  States,  and  the  absence  of  banks  operated  by  American 
interests  and  the  discrimination  against  American  firms  practiced  by  banks  of  other 
nationalities,  and 


234      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

WTiereas  this  state  of  affairs  is  accentuated  at  the  present  time  by  the  arbitrary 
measures  adopted  by  the  officials  of  certain  belligerent  nations  in  dictating  terms 
under  which  American  firms  may  carry  on  their  business  between  America  and 
China,  such  as  refusal  to  accei)t  cargo  offered  by  American  concerns  except  under 
arbitrary  conditions  and  the  refusal  of  the  finks  to  negotiate  American  commercial 
paper  (including  American  consular  invoices)  except  under  arbitrary  conditions 
acting  under  instructions  from  their  Governments:  Tnerefore 

We,  the  American  Association  of  North  China,  Tientsin  Branch,  do  request  our 
home  Government  to  fully  and  carefully  consider  the  present  burden  to  American 
trade  in  CJaina  by  the  lack  of  American  shipping,  and  to  enact  such  laws  as  have 
prove  1  successful  in  the  foremost  shipping  nations  of  the  world,  thereby  laying  the 
foundation  for  a  firm  and  lasting  American  merchant  marine,  and  to  give  due  con- 
sideration to  the  advisability  of  cooperating  in  the  establishment  in  China  of  banks 
operated  by  American  interests  for  the  promotion  of  American  trade. 

Also  copy  of  a  report  of  the  merchant  marine  committee  of  the 
Louisville  Board  of  Trade. 

(The  report  above  referred  to  is  as  follows:) 

KEPORT    MERCHANT    MARLVE    COMMITTEE    OF    THE    LOUISVILLE    BOARD    OF    TRADE. 

The  volume  of  Louisville's  foreign  trade  ranges  from  eight  to  ten  million  dollars  per 
annum.  This  trade  is  made  up  of  agricultural  implements,  machinery,  farm  wagons, 
sanitary  supplies,  tobacco,  grain,  flour,  mahogany  and  hardwood  lumber,  hickory 
handles,  boxes  and  box  material,  siiddlery  and  harness,  and  other  manufactured 
products.  Kxporting  is  also  done  extensively  from  other  points  in  the  State  of 
Kentucky  in  marketing  tobacco,  coal,  lumber,  etc. 

A  very  large  import  business  is  also  done  in  coffee,  fertilizer  material,  mahogany  logs, 
and  many  other  commodities  of  lesser  volume. 

The  export  business  of  1  ouisville  is  the  means  of  bringing  to  this  market  a  large 
\'olume  of  capital  that  is  of  vast  importance  to  our  manufacturers,  to  our  financial 
interests,  to  the  employment  of  labor,  and  to  the  steady  operation  of  factories,  and,  in 
fact,  to  all  branches  of  trade. 

This  large  and  important  part  of  our  commerce  is  now  seriously  handicapped  by 
lack  of  ocean  shipping.  Ocean  rates  have  been  increased  to  an  extent  almost  pro- 
hibitive, and  it  is  impo.ssible  to  make,  with  any  degree  of  safety,  future  contracts  with 
foreign  markets.  Shipping  for  our  commodities  under  the  American  flag  is  almost 
totally  lacking,  and  shipping  under  neutral  flags  is  entirely  inadequate.  Freight  for 
shipment  to  foreign  countries  is  now  congested  at  practically  all  Atlantic  and  Gulf 
ports  and  ocean  rales  have  advanced  beyond  reasonable  limits.  ICven  to  South  Amer- 
ican ports,  where  shipping  is  not  subjected  to  the  dangers  of  the  war  zone,  ocean  rates 
have  more  than  doubled. 

The  following  comparison  in  dollars  and  cents  per  100  pounds  on  tobacco  in  hogs- 
heads, as  of  December  20,  for  three  representative  years,  is  illustratiA'^e  of  the  abnormal 
tax  on  our  commerce  to  European  ports: 


From  New  Orleans  to— 

1915 

1913 

1910 

Liverpool 

$2.2.S  1 
2.75 
2.15 
2.10 

1 

SO.  53 
.48 
.48 
.50 

SO.  35 

Rotterdam ' 

.34 

1  lavre 

.38 

Genoa 

.31 

It  has  not  been  uncommon  of  late  for  the  price  of  a  ship  to  be  made  on  one  cargo,  and 
it  is  of  record  where  a  cargo  of  coal  from  the  Atlantic  seaboard  to  Sweden  paid  an  ocean 
rate  of  $14  per  ton. 

It  is,  of  course,  recognized  that  recent  conditions  and  present  ocean  rates  are  ab- 
normal, due  to  the  European  war,  which  has  served  to  withdraw  from  foreign  trade 
all  of  Germany's  merchant  vessels  and  to  so  greatly  reduce  England's  ocean  carriage 
of  commercial  tonnage.  It  has  also  had  the  further  effect  of  advancing  to  almost  prp- 
hibitive  figures  ocean  rates  of  neutral  ve.ssels. 

Notwithstanding  these  unusual  conditions,  it  is  now  well  recognized  that  even 
under  normal  conditions  the  number  of  merchant  vessels  available  for  shipping  from 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     235 

United  States  ports,  and  particularly  vessels  owned  by  citizens  of  the  United  States, 
is  inadequate  to  insure  any  expansion  in  foreign  trade  on  the  part  of  this  country.  It 
is  also  further  recognized  that  if  there  is  to  be  any  substantial  expansion  in  the  foreign 
trade  of  the  United  States,  after  the  close  of  the  war,  it  must  be  through  the  means  and 
by  the  assistance  of  an  American  merchant  marine. 

The  attention  of  Congress  and,  to  some  extent,  the  country  at  large,  is  apparently 
centered  on  prejiaredness  for  war.  Without  offering  any  objection  to  or  adverse 
criticism  of  reasonable  preparedness  against  war,  we  express  the  belief  that  prepared- 
ness for  ])eace  should,  at  this  time,  be  the  first  and  paramount  con.eideration  on  the 
principle  that  in  the  present  depleted  financial  and  physical  condition  of  the  great 
European  naticjne,  a  war  with  any  of  those  countries  is  remote,  whereas  commercial 
prepar-^dness  is  pressing  and  insi.stent  at  the  present  moment.  Furthermore,  peace- 
ful and  commercial  prej)arodness  in  the  nature  of  a  merchant  marine  is  a  logical  step 
in  the  direction  of  military  and  na^al  preparedness  in  that  it  provides  an  auxilliary 
naval  armament  for  use  in  case  of  war  for  transporting  both  military  and  commercial 
supplies. 

Therefore,  it  is  urgently  recommended  that  the  present  Congress  be  petitioned  by 
this  and  other  commercial  bodies  to  give  first  consideration  to  commercial  preparedness 
in  advance  of  military  preparedness. 

Your  coniniittee  further  recommends  that  the  seriousness  of  the  export  and  import 
situation  and  the  importance  of  our  foreign  trade  be  forcibly  brought  to  the  attention 
of  our  representatives  in  Congress  and  in  the  Senate,  and  that  they  be  urged  to  put 
forth  their  best  efforts  at  the  present  session  of  Congress  to  insure  the  restoration  of  our 
American  uKTchant  marine. 

It  is  felt  that  in  giving  consideration  to  this  momentous  question  that  it  be  ap- 
proached, not  from  a  parti.-<an  standpoint,  but  from  the  standpoint  of  our  urgent  com- 
mercial needs.  l)oth  jiresont  and  future,  and  that,  if  need  be,  there  be  a  tearing  away 
from  any  pre\iously  wedded  \iews  or  ])arty  prejudices.  ,  P*IH 

We  do  not,  however,  undertake  to  suggest  the  means  of  providing  a  merchant  marine, 
but  to  impress  the  need  of  it,  leaving  the  solution  to  the  wisdom  of  Congress,  believing 
that  with  due  consideration  for  vested  interests  and  w\\.\\  a  full  realization  of  our 
present  commercial  requirements,  that  necessary  steps  will  be  taken  to  insure  shipping 
in  our  own  bottoms  for  our  stagnated  and  suffering  commerce,  adequate  to  present 
needs  with  ample  provision  for  future  expansion,  to  the  end  that  our  rapidly  increasing 
foreign  commerce  be  given  oj)portunity  to  protect  itself  and  expand  in  competition 
with  other  nations. 

R.  L.  McKellar, 
Chas.  F.  Huhlein, 
Chas.  D.  Gates, 

CommitUe. 

Adopted  by  board  of  directors  January  19,  1916. 

Letter  from  Mr.  E,  E.  Pratt,  Chief  of  the  Bureau  of  Foreign  and 
Domestic  Commerce  of  the  Department  of  Commerce,  together  with 
copy  of  a  letter  received  from  Commercial  Attache  Veditz,  giving  de- 
tailed information  concerning  the  proposed  French  shipping  law, 
and  attaching  a  clipping  from  the  Pans  Le  Temps  of  January^l4, 
1916,  indicating  the  features  of  the  proposed  law. 

(The  communication  and  clipping  referred  to  are  as  follows:) 

Department  of  Commerce, 
Bureau  of  Foreign  and  Domestic  Commerce, 

Washington,  February  11,  1916. 
Hon.  Joshua  W.  Alexander, 

House  of  Representatives,  Washington,  D.  C. 
My  Dear  Congressman:  With  further  reference  to  my  letter  of  February  10,  I 
take  pleasure  in  handing  you  herewith  a  copy  of  a  letter  which  has  been  received 
to-day  from  Ctimmercial  Attach^  Veditz  in  answer  to  our  cabled  request  that  he  for- 
ward detailed  information  concerning  the  proposed  French  shipping  loan;  also  a  clip- 
ping from  the  Paris  Le  Temps  of  January  14,  1916,  indicating  the  main  features  o£ 
the  proposed  law. 

With  kind  regards,  I  am,  very  truly,  yours, 

E.  E.  Pratt,  Chief  of  Bureau^ 


236      f^HlPtMX<;  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

(Copy.) 

Office  of  Commercial  Attache, 

36  Avenue  de  l'Opera, 

Paris,  January  14,  1916. 
Chief  Bureau  ok  Foreign  and  Domestic  Commerce, 

Washington,  D.  C. 

Dear  Dr.  Pratt:  The  French  Government  and  the  French  business  world  have 
been  much  concerned  with  the  problem  of  ocean  transportation  and  with  the  problem 
of  creating  an  adequate  merchant  marine.  To-day,  January  14,  the  Government 
presented  to  the  French  Parliament  a  project  aiming  to  increase  the  French  mer- 
chant marine  by  providing  for  Government  loans  to  shipbuilding  enterprises.  The 
bill  was  prepared  by  M.  Louis  Nail,  subsecretary  of  the  merchant  marine.  It  author- 
izes the  expenditure  by  the  Government  of  a  sum  amounting  to  100,000,000  francs, 
to  be  made  during  the  war  and  during  a  period  of  12  months  following  the  signing  of 
the  peace  treaty.  This  total  amount  may  be  loaned  to  French  shipbuilders,  subject 
to  the  approval  of  the  secretary  of  the  navy,  with  the  consent  of  the  secretary  of 
finances,  to  furnish  a  part  of  the  funds  necessary  for  the  purchase  of  vessels  in  allied 
or  neutral  countries.  The  sums  thus  advanced  are  required  to  bear  interest  at  the 
same  rate  as  that  paid  upon  sums  loaned  upon  collateral  by  the  Bank  of  France. 
The  purpose  of  this  law  is  thus  stated  by  Mr.  Nail: 

"Throughout  the  duration  of  hostilities  it  is  desirable  to  overcome,  at  least  in  part, 
in  the  interests  of  French  commerce,  the  heavy  tribute  which  we  must  now  pay  to 
foreign  shippers  in  the  shape  of  freight  charges. 

"After  the  war  our  maritime  trade  should  have  available  sufficient  means  for  assur- 
ing the  establishment  of  navigation  services  equal  to  those  utilized  before  the  war 
and  capable  of  establishing  new  lines  of  transportation. 

"The  circumstances  of  war  have  reduced  our  ocean  transportation  facilities.  The 
intensive  service  which  has  been  imposed  upon  our  ships  since  August,  1914,  and 
the  wear  and  tear  which  has  resulted  therefrom,  together  with  the  impossibility  of 
reopening  our  shipbuilding  establishments  before  the  end  of  the  war,  have  made  it 
necessary — if  we  seek  to  be  prepared  in  good  season — to  obtain  immediately,  outside 
of  F'rance,  a  certain  number  of  vessels  to  replace  those  which  are  no  longer  available 
and  to  increase  the  total  tonnage  available.  The  Government  has  considered  several 
solutions  of  this  problem.  It  has  decided  that  under  existing  circumstances  the 
desired  result  can  be  obtained  only  by  encouraging  individual  initiative  and  by  grant- 
ing facilities  to  shipbuilders  wliich  shall  encourage  and  enable  them  to  buy  vessels 
in  allied  or  neutral  countries." 

It  is  provided  that  the  maximum  amount  advanced  to  shipbuilders  shall  not  exceed 
70  per  cent  of  the  purchase  piice,  in  the  case  of  enterprises  already  possessing  a  fleet 
of  less  than  20,000  gross  tons,  and  not  more  than  80_per  cent  of  the  purchase  price 
in  the  case  of  shipbuilding  enterprises  already  having  a  fleet  of  more  than  20,000 
gross  tons. 

The  whole  subject  of  the  creation  of  a  more  adequate  merchant  marine  has  long 
been  discussed  by  ])rivate  and  public  authorities  in  France,  and  the  above  proposed 
law  appeaw  to  be  the  outcome  of  a  careful  consideration  of  the  whole  question.  Since 
the  project  emanates  from  the  Government,  it  is  more  than  likely  to  receive  favorable 
consideration  on  the  part  of  the  national  legislature,  subject,  however,  to  modification 
in  the  course  of  its  discussion  in  the  lower  and  upper  houses  of  the  French  Parliament. 
Respectfully,  yours, 

C.  W.  A.  Veditz,  Cominercial  Attache. 

[P.  S.— 1  inclose  herewith  an  article  from  the  Paris  Le  Temps  of  January  14, 
1916,  indicating  the  main  features  of  the  proposed  law.] 


[Translation  from  Paris  "Le  Temps,"  Jan.  14,  1916.) 
THE   proposed   LAW   CONCERNING   LOANS   TO    SHIPOWNERS. 

Mr.  Nail,  undersecretary  of  state  for  the  merchant  marine,  has  drafted  a  bill  having 
for  its  object  the  strengthing  of  our  merchant  marine.  The  bill  has  been  placed 
before  the  chamber  this  morning.  We  believe  that  there  are  no  differences  of  opinion 
on  the  subject  between  the  shipowners  and  the  Government,  as  the  bill  is  the  result 
of  careful  investigation  and  study. 


\ 


I 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      237 

We  give  below  the  most  importanl  passages  of  the  memorandum  accompanying  the 
bill: 

"A  measure  tending  to  strengthen  our  merchant  marine  shoidd  be  passed  without 
delay. 

"While  the  war  lasts  we  may  reap  the  advantages  of  being  able  to  benefit  French 
commerce  by  recovering,  in  part,  the  heavy  tribute  which  we  are  paying  to  foreign 
shipowners  in  the  form  of  marine  freights. 

"After  the  war  our  maritime  commerce  will  netd  a  number  of  ships  sufHcient  to 
insure  a  continuation  of  the  services  heretofore  maintained  by  our  companies  and  to 
make  possible  the  organization  of  new  lines.  It  is  on  this  condition  only  that  the 
economic  life  of  France  will  be  able  to  recover  and  to  create  large  resources  necessary 
for  the  work  of  national  rehabilitation. 

"Our  ports  will  be  visited  by  a  larger  numljer  of  ships  from  now  on,  and  the  free 
play  of  economic  laws  will  tend  to  lower  the  freights.  Furthermore,  the  proportion 
of  French  toimage  in  our  foreign  trade  will  be  larger,  and  action  by  the  Government, 
if  demanded  by  circumstances,  would  be  of  greater  effect  in  the  domain  of  transpor- 
tation. 

"The  vicissitudes  of  war  have  reduced  the  effective  strength  of  our  merchant  fleet. 
The  strenuous  service  to  which  our  ships  have  been  subjected  since  August,  1914, 
the  r.'suliing  wear  and  tear,  th*  impossibility  of  reopening  our  ship>ards  before  the 
termination  of  hostiliti  'S,  all  this  comp(  Is  us,  if  we  would  be  ready  in  time,  to  obtain 
without  delay  a  number  of  ships  from  other  countries  to  replace  those  lost  and  to  sup- 
plement tho.se  in  active  service. 

"In  its  earnest  /lesire  to  improve  the  conditions  under  which  the  country  procures 
its  food  su])])ly,  to  stop  the  waste  of  the  national  wealth,  and  to  secure  the  future 
of  our  merchant  mavine,  the  Government  has  examined  various  solutions  proposed. 
It  is  of  the  oj)inion  that  the  end  sought  can  only  be  achieved  Ity  encouraging  pri\  ate 
initiative  and  giving  aid  to  shipowners  in  order  to  induce  them  to  buy  siiips  in  allied 
or  neutral  countries. 

"The  granting,  under  proper  guaranties,  of  loans  repayable  in  annual  installments 
and  the  determination  of  a  fi.xed  sum  to  be  paid  as  indemnity  in  case  a  ship  so  acquired 
should  be  requisitioned  by  the  (iovernment,  are  the  measures  which  will  best  meet 
the  present  needs  of  the  shipowners.  There  seems  to  ])e  no  doubt  of  the  general 
utility  of  these  measures,  as  the  siiipowners  will  be  under  the  double  obligation  of 
keeping  the  sliips  so  acquired  as  part  of  our  merchant  fleet  for  five  years  at  least, 
and  of  employing  them  in  the  French  import  trade  until  the  crisis  now  prevailing  in 
maritime  transjKirtation  sliall  have  moderated." 

Some  of  ilie  ])rovi,Nioiis  of  the  ]!ro|  o.-^ed  law  are  as  follows: 

"Until  the  ex]'iration  of  12  months  after  the  conclusion  of  ]  eaee  the  Government 
may  iuAest  a  sum  not  exceeding  !(W.000,000  franc  in  loans  to  French  shipowners,  to 
cover  a  part  of  the  sums  necessary  for  the  i)urchiise  oi  ships  v.ith  meohar.ical  i)ropulsion, 
from  citi.'.ens  of  allied  or  neutral  countries.  The  interest  to  be  paid  on  such  loans 
shall  be  calculated  at  the  rates  charged  by  the  Bank  of  I-  ranee  on  loans  on  securities. 
Navigation  companies  possessing  a  fleet  of  20,000  tuns  or  more  may  receive  70  per  cent 
of  the  ]nnchasi   i)rice;  th(  se  possessing  a  smaller  fleet,  80  per  cent. 

"After  making  provision  for  rci)ayment  by  the  shipowners,  the  bill  provides  that 
Government  experts  shall  inspect  the  ships  which  must  be  seaworthy  and  in  good 
condition,  .\rticle  o  indicates  the  fonnalities  to  be  complied  \vith  by  the  shipowner 
desiring  to  olitiin  a  loan,  the  shipowner  l)eing  obliged,  among  other  things,  to  give  the 
State  a  first  mortgage  on  the  shi])  after  it  has  been  registered  as  French. 

"Article  0  i^roNides  that  in  the  case  of  a  transfer  of  the  ownership  of  a  ship,  made 
during  the  ]>resent  war  or  within  five  years  after  the  conclusion  of  peace,  the  owner 
shall  pay  a  sum  of  money  equal  to  the  ]nirchase  price,  lie  is  under  the  additional 
obligation,  until  the  ex]>iration  of  six  months  after  a  treaty  of  peace  has  been  signed, 
to  carry  im])orts  intended  for  French  ports  only,  though  one-fourth  of  the  cargo  may 
be  carried  to  allied  ar  neutral  countries.  Similar  provisions  are  made  for  owners  of 
tugs  and  fishing  vessels. 

".\nd  finally,  the  indemnity  to  be  paid  lor  ships  so  acquired  when  requisitioned 
by  the  Government  shall  be  determined  in  accord  with  the  prevailing  charter  rates, 
reduced  by  15  per  cent." 

Mr.  Curry.  I  have  also,  Mr,  Chairman,  a  communication  here  in 
reference  to  the  Chin  a- Java- Japan  line,  which  I  would  like  to  have 
go  into  the  record. 

32910— ]G IG 


238  SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

(The  communication  referred  to  is  as  follows:) 

[Copy.] 

[The  Robert  Dollar  Co..  San  Frandsco,  shijiping  and  lumber,  230  California  Street.) 

FKimu.\RY  ;i,   191(). 
Mr.  Robert  Dollar. 

Care  of  NfV)  WUIind  Hotel ,   WaMtiglon,  D.  C. 
Dear  Mr.  Dollar.- 

china-java-japan  line. 

This  line,  as  you  know,  is  now  running  from  Java  here  and  we  were  interested 
to  learn  thp  other  day  that  they  are  making  preferential  rates  to  and  from  Java,  as 
against  other  pDrts  of  call,  their  rates  to  Java  being  almost  one-half  what  they  are 
between  the  United  States  and  Manila  and  Hongkong. 

This  condition  would  indicate  to  us  that  the  line  is  subsidized  by  the  Dutch  Govern- 
ment on  similar  lines  to  the  Japanese  scheme  of  regulating  rates  between  Japan  and 
the  United  States,  whereas  the  Japanese  vessels  are  allowed  to  fill  up  at  outside 
ports  at  such  rates  as  they  can  obtain,  thus  not  only  giving  Japanese  merchants  a 
service,  but  preferential  rates,  which  enables  them  to  build  up  their  industries. 

The  United  States  Government  can  well  take  a  lesson  from  this  condition. 
Very  truly,  yours, 

JItrOO    LORBEK. 

Mr.  Hardy.  Mr.  Chairman,  along  that  same  line,  I  would  like  to 
put  into  the  record  a  communication  which  I  have  from  Mr.  A.  B. 
Hammond,  bearing  upon  the  statements  alleged  to  be  made  by  the 
different  chambers  of  commerce,  and  showing  the  manner  in  which 
such  chamber-of -commerce  expressions  are   obtained. 

Mr.  Hammond  was  invited  to  discuss  before  the  San  Francisco 
Chamber  of  Commerce  the  needs  of  our  merchant  marine.  Many  of 
the  directors  of  that  body  found  that  he  cUft'ered  from  their  views, 
and  although  he  was  a  member  of  the  chamber  of  commerce,  his 
invitation  to  address  them  was  withdra^^^l,  showing  that  these  reso- 
lutions appear  to  be  cut-and-dried  expressions  by  the  directors. 

The  letter  speaks  for  itself  and  I  ask  that  it  be  incorporated  in 
the  record. 

(The  letter  above  referred  to  is  as  follows:) 

San  Franclsco,  Cal.,  May  26,  1916. 
Mr.  Fred  J.  Koster, 

Acting  Presideyit  San  Francisco  Chamber  of  Commerce, 

ISM  Merchants  Exchange  Building. 

Dear  Sir:  Under  date  of  the  24th  instant,  you  extended  to  me  tlie  honor  of  an 
invitation  to  speak  on  the  su1)ject  of  "Needs  of  our  merchant  marine "  at  the  luncheon        * 
to  be  given  to-morrow  at  the  chamber  to  the  Senators  and  Representatives  who  are       ■ 
returning  from  their  recent  trip  to  Honolulu.  * 

While  disinclined  to  undertake  the  presentation  in  the  five-minute  period  alloted, 
of  a  question  which  has  been  consuming  the  attention  of  Congi-ess  for  the  last  five 
years,  nevertheless,  at  the  urgent  request  of  Capt.  Hibberd,  who  knew  my  -views  on 
the  subject  and  was  anxious  that  they  should  be  presentefl  to  the  \'i3iting  statesmen, 
I  decided  to  accept,  and  filled  out  the  invitation  response  blank  accordingly.  Yes- 
terday, however,  I  had  a  telephone  call  from  Capt.  Hibberd  stating  that  i\lr.  Lynch, 
vice  president  and  manager  of  the  chamber  of  commerce,  had  informed  him  that 
inasmuch  as  the  directors  of  the  chamber  of  commerce  had  already  gone  on  record  as 
being  opposed  to  permitting  foreign  built  vessels  acquiring  American  registry,  to 
engage  in  coastwise  or  intercoastal  trade,  that  they  would  disapprove  of  my  making 
any  statement  in  my  remarks  in  conflict  therewith. 

It  is  because  of  this  that  I  to-day  communicated  with  you,  who  had  issued  the  invi- 
tation, with  the  result  that  yoti  informed  me  that  the  invitation  had  not  better  be 
accepted  unless  I  would  confine  my  remarks  to  the  "seamen's  bill."  That  legisla- 
tion constituted  a  national  issue  for  some  three  years,  passed  Congress,  and  became  a 
law  last  winter.     All  your  guests  had  participated  in  the  discussion  of  this  legislation 


I 


!SHIPPlN(i   BOAKD,  NAVAT.  AL'Xll  lAKV,  AND  MEHCHANT   MARINE.      239 

when  it  \vu,s  before  (Congress,  and  mauy  of  them  had  voted  in  its  favor.  It,  therefore, 
seemed  to  me  that  a  discussion  of  the  "seamen's  bill"  would  not  only  be  boresome, 
but.  perhaps,  also  in  poor  taste. 

If  the  board  of  directors  does  not  care  to  have  the  members  of  the  chamber  express 
views  at  varianre  witli  que.stions  whith  they  seemingly  consider  they  have  settled, 
is  it  not  probable  that  your  guests  might  feel  the  same  way?  Indeed,  might  not  this 
with  much  greater  propriety  be  the  attitude  of  your  visitors?  Their  action  is  final 
and  produces  results,  but  the  action  of  the  board  of  directors  settles  nothing.  Indeed, 
many  of  those  who  apparently  siled  with  the  directors  in  the  action  taken  are  now, 
understanding  the  facts,  opposed  to  it. 

As  I  am  not  permitted  to  liscuss  the  most  important  l)ranch  of  the  whole  question^ 
and  one  wliich  viUxlly  concerns  the  pro;lucers  of  the  Pacific  coast,  and  as  I  am  limited 
to  a  consideration  of  the  "'sj^amen's  bill,"  a  dead  issue,  and  further,  as  in  my  opinion-, 
it  would  be  somewhat  of  a  ciscom-tesy  to  your  guests  to  do  so,  nothing  remains  for  me 
but  to  act  upon  your  suggestion  (contained  in  your  letter  of  invitation),  viz,  that  in 
the  event  of  my  not  preferring  t_o  make  an  address,  you  would  like  me  to  suggest  the 
name  of  some  gentlemen  who,  in  my  opinion,  would  be  best  qualified  to  speak  on 
the  subject.  I  would,  therefore,  suggest  as  such  speaker,  or  speakers,  any  of  the 
representatives  or  officials  of  the  companies  who  are  now  controlling  intercoastal  trans- 
porUition  through  the  canal.  They,  no  doubt,  can  be  relied  upon  to  side-step  a 
question,  the  discussion  of  which  seems  to  cause  the  directors  so  much  embarrassment 
at  this  time. 

Very  sincerely,  yours, 

A.  B.  Hammond. 

Tlio  Chair.man.  Gentlemen,  this  is  Rear  Admiral  Benson,  of  the 
Navy,  who  has  been  invited  to  appear  this  morning  and  will  address 
the  committee  on  the  bill  under  consideration. 

STATEMENT  OF  REAR  ADMIRAL  WILLIAM  S.  BENSON,  CHIEF 
OF  OFFICE  OF  NAVAL  OPERATIONS,  UNITED  STATES  NAVY. 

Admiral  Hexso.v.  I  did  not  understand  exactly  that  I  would  be 
expected  to  address  tlie  committee,  but  that  I  would  be  here  to  give 
the  committee  any  information  I  could  in  connection  with  this  bill. 
I  miglit,  however,  give  them  an  idea  of  what  we  liave  been  doing  in  the 
Navy  Department  since  I  have  been  holding  my  present  positicm. 

Of  C(mrse,  in  tune  of  war  or  preparation  for  war,  it  would  be  neces- 
sary for  us  to  very  largely  increase  the  tmmber  of  our  auxiliaries  in 
order  to  carry  fuel,  supplies,  and,  under  certain  conditions,  a  certain 
number  of  men.  The  principal  demand,  however,  for  transports 
would  come  from  the  Army,  but  sJmuld  it  be  necessary  for  us  to  con- 
duct a  campaign  across  either  one  of  the  oceans,  and  the  broader  one 
f>articularly,  it  would  be  necessary  to  have  a  considerable  number  of 
uel  ships,  not  only  to  accompany  the  fleet,  but  many  to  be  going 
back  and  forth  from  the  source  of  supply. 

Wlien  I  took  charge  of  the  present  Office  of  Naval  Operations,  I 
got  the  Secretaiy  of  the  Navy  to  add  certain  members  to  the  Board  of 
Inspection  and  Survey  for  Ships  to  inspect  all  American  merchant 
vessels  so  as  to  see  to  what  extent  they  would  answer  the  various 
purposes  for  which  we  would  need  them.  The  General  Board  of  the 
Navy  then  took  up  the  characteristics  of  each  type  of  vessel  needed. 
For  instance,  we  want  some  vessels  to  carry  ammunition  and,  as  you 
know,  it  is  desira])lc  that  the  powder  which  we  use  should  be  kept  at  a 
uniform  temperature,  and  we  want  a  special  type  of  vessel  in  which 
we  could  carry  ammunition  and  keep  it  at  practically  a  uniform 
temperature. 

In  order  to  carry  meats  and  fresh  food  it  would  be  necessary  to  have 
refrigerator  ships,  and,  of  course,  we  want  vessels  that  can  carry  fuel 


I 


240      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

oil  and  lubricating  oil,  as  well  as  coal  and  the  many  other  supplies  that 
a  large  fleet  would  need. 

Therefore,  in  order  tliat  we  might  go  about  it  intelligently,  the 
General  Board  worked  out  the  necessary  characteristics  for  each  one 
of  those  ty])es  of  vessels.  Take,  for  instance,  the  question  of  fleet 
scouts,  which  is  a  very  important  element,  because  by  the  use  of  the 
fleet  scodts  in  advance  of  the  main  fleet  to  seek  out  and  locate  the 
enemy,  with  our  long  seacoast,  both  on  the  Atlantic  and  Pacific,  it 
would  be  necessary  to  have  quite  a  large  number  of  these  fleet  scouts, 
And  I  might  say  in  this  connection  that  we  hope  to  increase  the 
radius  of  action  of  these  scouts  by  the  use  of  aeroplanes.  We  have 
now  developed  means  by  which  we  can  send  an  aeroplane  from  the 
deck  of  a  ship  and  to  have  it  go  out,  we  hope,  when  we  can  get  the 
proper  motors,  for  a  couple  of  hundred  miles  in  advance  even  of  the 
fleet  scouts  and  at  a  great  altitude,  which  would  enable  them  to  give 
us  information  over  a  very  large  area. 

But  even  with  this  addition  we  will  need  a  large  number  of  fleet 
scouts,  and  necessarily  they  should  be  vessels  as  fast  as  possible. 
And  so  we  have  worked  out  the  various  characteristics  of  fleet  scouts; 
that  is,  the  speed,  the  number,  the  steaming  radius,  the  displacement, 
the  armament,  and  all  the  various  things  that  would  be  desirable; 
and  then  as  these  merchant  vessels  were  inspected  by  this  inspection 
board  they  determine  from  their  present  characteristics  whether  or 
not  they  would  be  suitable  either  as  fleet  scouts  or  district  scouts, 
mine  planters,  harbor  patrol  boats,  fuel  ships,  or  any  of  the  various 
other  types  that  we  would  need.  And  then  such  vessel  is  assigned 
to  a  particular  place  in  the  fleet  and  to  a  particular  navy  yard  or 
shipbuilding  plant,  in  order  to  fit  her  out  for  the  particular  service 
for  which  slie  is  designed.  As  fast  as  we  can  we  will  have  these 
necessary  supplies  and  fittings  placed  at  the  various  yards  and  ship- 
building plants  for  the  purpose  of  fitting  them  out. 

At  present  we  have  24  fuel  ships,  and  we  are  asking  for  a  few  more. 
We  are  also  asking  for  scouts,  and  particularly  for  fleet  scouts. 

The  Chairman.  You  speak  of  fuel  ships:  the}'  are  built  for  naval 
purposes,  are  they  not  ? 

Admiral  Benson,  Yes,  sir.  We  have  12  of  the  larger  ones  carry- 
ing from  7,500  to  12,500  tons,  and  then  we  have  a  number  (6  or  8) 
of  the  smaller  type  of  colliers  that  were  bought  at  the  outbreak  of 
the  Spanish-American  War,  but  which  are  very  small  and  rapidly 
reaching  the  stage  where  it  does  not  pay  to  repair  them.  It  is  hardly 
economical  to  run  them,  because  they  carry  sa  little  coal. 

And  then,  of  course,  we  hope  in  the  case  of  war  to  be  able  to  draw 
on  the  Panama  Canal  colliers  and  fuel  ships.  But  even  with  all  of 
those  we  find  that  at  present  we  are  short  a  certain  amount,  some 
four  or  five  hundred  thousand  tons,  of  what  we  would  need  in  time 
of  war  or  proper  preparation  for  it. 

And,  of  course,  any  vessel,  as  I  understand  the  bill  that  is  being 
considered,  that  would  answer  any  of  these  various  purposes  and, 
even  possibly  some  of  those  that  we  have  or  which  are  building,  in 
time  of  assured  peace  when  there  would  not  be  a  great  need  for  so 
many,  might  be  utilized  for  commercial  purposes.  As  you  under- 
stand, although  we  built  up  or  should  build  up,  a  large  battleship 
fleet,  with  the  usual  auxiliaries,  we  would  not  expect  to  keep  the 
whole  fleet  in  full  commission,  and  it  would  be  unnecessary.     The 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      241 

idea  is  to  keep  a  fleet  sufficiently  large,  or  a  sufficiently  large  number 
of  vessels,  in  active  commission  for  training  purposes  of  the  personnel, 
with  constant  traiiiino;,  target  practice,  and  maneuvering  and  working 
out  war  games  and  other  strategic  features.  And  then  the  rest  of  the 
fleet — that  is,  the  fighting  elements  —to  be  kept  in  reserve.  Under 
the  policy  that  we  have  adopted  in  regard  to  reserve  ships,  they  should 
have  40  per  cent  of  their  personnel  on  board,  and  they  should  be  kept 
constantly  ready  for  service,  the  only  thing  necessar}^  being  to  fill  up 
the  persoimel.  The  stores  and  ammunition  are  kept  on  board,  and  it 
is  our  intention  tliis  summer  to  get  all  of  the  reserve  battleships  to  sea 
and  to  fill  out  the  necessary  complements  from  the  naval  militia  from 
the  various  States.  And  we  are  now  utilizing  and  have  just  inaugU" 
rated  the  policy  of  utilizing  some  of  the  older  battleships  for  this  pur^ 
pose.  F(^r  instance,  the  lOarmrge  is  going  to  the  Massachusetts 
Naval  Militia;  the  Oregon  has  been  assigned  to  the  west  coast,  to  Cal- 
ifornia particularl}'-;  the  K'ritvcly  will  possibly  be  assigned  to  NeW 
York  and  to  the  New  Jersey  Militia  later  on;  and  some  large  vessel 
will  be  assigned  to  Philadelphia.  The  idea  is  to  keep  these  ships  con- 
stantly ready  and  to  give  the  Naval  Militia  adequate  means  of  exer- 
cising and  developing.  We  have  assigned  in  the  southern  waters,  on 
account  of  the  smaller  units  of  the  Naval  Militia,  a  number  of  destroy- 
ers for  that  purpose  for  the  present,  to  get  them  organized  and  well 
started. 

Of  course,  it  would  be  extremely  expensive  for  the  Government  to 
keep  a  large  number  of  enlisted  men  on  the  pajToll  to  come  to  colors 
immediately  on  the  declaration  of  war,  and  yet,  if  these  men  can  be 
trained  in  some  other  way,  and,  as  I  understand,  the  object  would 
be,  if  we  had  this  organized  merchant  marine,  the  personnel  there 
would  be  available  for  being  brought  into  the  regular  service,  as 
the  Coast  Guard  and  other  branches  of  the  Government  service  will 
come  under  the  Navy  Department  in  time  of  war.  xind  these  ves- 
sels, instead  of  being  an  expense  to  the  Government,  could  be  util- 
ized for  commercial  purposes,  and  then,  in  case  of  war,  they  could 
be  turned  over  to  the  Navy  for  the  uses  for  which  they  were  fitted, 
and  thus  prevent  a  great  amount  of  capital  lying  idle  during  peace 
times. 

As  I  understand  the  general  features  of  the  bill,  I  think  that  about 
covers  the  situation.  Of  course,  if  we  can  get  a  sufficient  number  of 
these  fast  vessels,  properly  built  under  regular  rules  governing  their 
construction,  design,  and  general  arrangement,  it  would  be  unnec- 
essary for  the  Navy  Department  to  ask  Congress  to  appropriate 
money  for  those  vessel^  which  would  be  kept  lying  idle  until  they 
were  needed  for  war  purposes. 

The  Chairman,  You  have  had  your  attention  called  to  section  11 
of  the  bill,  I  ])elieve  ? 

Admiral  Benson.   I  have  read  it  over;  yes. 

The  Chairman,  Do  the  provisions  of  that  section  commend 
themselves  to  you  ?  In  other  words,  do  you  think  that  if  the  powers 
there  vested  in  this  board  are  exercised  the  result  would  be  to  build 
up  a  valuable  reserve  for  the  Navy  ? 

Admiral  Benson.   I  believe  it  would,  sir. 

The  Chairman,  As  I  understand,  your  position,  of  course,  deals 
more  with  the  proper  balance  of  an  efficient  Navy,  to  see  that  suffi- 
cient colliers,  supply  ships,  ammunition  ships,  and  refrigerator  ships 


242      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT   MAHINK. 

should  be  provided.  If  they  were  to  be  provided  as  a  part  of  the 
naval  program  and  utihzed  alone  for  naval  purposes,  it  would  result 
in  a  great  economic  loss,  as  they  would  never  be  utilized  except  in 
the  event  of  war.  While  under  this  bill,  in  time  of  peace,  the  vessels 
and  their  officers  and  men  might  be  used  for  commercial  purposes  ? 

Admiral  Benson.  Yes. 

The  Chairman.  Of  course  there  is  a  type  of  vessel  built  with 
primary  reference  to  use  m  the  Navy  and  which  could  not  be  operated 
economically;  those  in  which,  for  instance,  as  I  have  heard  said, 
^here  would  be  such  large  provision  made  for  fuel  and  solely  for  cargo 
space  that  it  would  be  very  expensive  to  operate  that  ship  for  com- 
aiercial  purposes.  And  for  that  reason  there  are  very  few  vessels 
now  in  the  Navy,  as  naval  auxiliaries,  that  could  be  utilized  eco- 
nomically for  commercial  purposes  ? 

Admiral  Benson.  Yes.  And  I  might  say,  in  that  connection, 
that  w^e  are  asking  for  some  fast  scouts,  of  about  7,500  tons  dis- 
placement, which  we  hope  will  make  30  knots.  Of  course  it  w^ould  be 
necessary  to  have  a  certain  number  of  vessels  of  that  type  and  you 
could  not  utilize  them  economically  for  any  other  purpose. 

The  Chairman.  But  take  the  commercial  colliers:  In  the  event 
of  war,  they  would  be  a  valuable  auxiliary  to  the  Navy,  would  they 
not? 

Admiral  Benson.  Yes,  sir. 

The  Chairman.  And  take  a  16,  18,  or  20-knot  ship  built  for  pas- 
senger, mail,  and  package-freight  purposes;  in  time  of  war  they 
would  be  valuable  naval  auxiliaries  hi  the  event  we  had  to  carry 
on  operations  in  some  foreign  c^mntry,  as  transport  and  supply  ships, 
would  they  not  ? 

Admiral  Benson.  They  oould  be  used  for  that.  And  vessels  of 
20  knots  and  over  we  would  utilize  for  scout  purposes  also. 

The  Chairman.  And  we  have  a  large  commerce  now  in  refrigerated 
meats  and  fruits  between  the  east  and  the  west  coasts  of  our  own 
country  and  with  foreign  countries,  and  between  Central  and  South 
American  countries  and  our  own.  That  type,  of  course,  would  be  a 
Yaluablc  naval  auxiliary  in  time  of  war;  and  at  the  same  time  they 
are  essentially  a  type  of  ship  of  great  value  to  our  commerce  in  time 
of  peace. 

Admiral  Benson.  We  have  them  all  listed  now,  sir,  just  what  each 
one  would  be  able  to  do. 

Mr.  Edmonds.  Are  these  ships  which  you  have  in  your  list  there 
the  same  as  given  in  a  communication  from  the  Secretary  of  the  Navy 
to  the  Secretary  of  the  Treasury  on  July  27,  1915? 

Admiral  Benson.  Of  the  same  general  features;  yes. 

Mr.  Edmonds.  The  same  general  features? 

Admiral  Benson.  Yes. 

Mr.  Edmonds.  Excepting  the  very  fast  scouts,  which  you  have 
not  included  in  tlie  list  sent  to  the  Secretary  of  the  Treasury,  I 
suppose  ? 

Admiral  Benson.  In  regard  to  fleet  scouts,  I  would  like  to  give 
you  one  point:  We  would  like  to  have  them  make  not  less  than  16 
knots  speed.  Of  course,  they  must  be  seaworthy  and  make  not  less 
than  16  knots.  If  I  remember  correctly,  we  have  about  14  of  them 
now,  and  we  want  altogether  of  those,  with  these  coming  from  the 
merchant  service,  32.     I  went  over  the  list  about  a  montli  ago  and, 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      243 

if  1  remember  it,  we  luul  10  or  14  either  already  available  or  that 
might  be  utilizecl.  I  am  simply  giving  these  fiojures  from  memory; 
but  I  remem])er  that  I  was  surprised  at  the  number  we  have  that  we 
could  utilize.  But  that  would  still  leave  us  16  of  these  fast  vessels 
that  we  would  want  to  utilize  for  fleet  scouts. 

The  Chairman.   16-knot  ships  ? 

Admiral  Benson.  Not  less  than  16  knots.  That  is  the  limit  we 
have  set  for  that  purpose. 

The  Chairman.  And  about  how  many  colUers  and  merchant  ships 
are  there  that  could  be  utilized  ? 

Admiral  Benson.  We  call  for  fleet  colliers.  We  do  not  want  very 
many  of  those,  because  we  have  quite  a  number.  They  are  built 
with  the  idea  of  following  the  fleet  and  not  being  utilized  unless  what 
we  call  "service  colliers'"  run  short.  We  have  12  of  these  fleet  col- 
liers, so  that  we  would  oidy  need  4  more.  They  would  have  to  make 
at  huist  14  knots  and  should  have  a  st(M\ming  radius,  of  course,  of 
8,000  miles.  Those  are  fleet  colliers,  and  they  would  have  to  make 
that  speed. 

Mr.  Hardy.  Whnt  would  be  the  tonnage  of  those  fast  16-knot 
vessels  ? 

Admiral  Benson.  A  speed  of  not  less  than  16  knots  and  a  tonnage 
as  great  as  practicable,  but  not  less  than  5,000  tons. 

Mr.  IIahdy.  For  each  vessel.  That  would  be  80,000  tons  required 
of  those  16-knot  vessels? 

Admiral  Benson.  Yes;  that  is  the  least,  sir.  Of  course  we  would 
like  to  have  them  larger. 

Mr.  Hardy.  And  Avliat  would  be  the  tonnage  of  the  colliers  ? 

Admiral  Benson.  We  want  four  of  those  of  not  less  than  from 
6,000  to  8,000  tons.  Take  7,000  tons,  that  would  be  28,000  tons. 
W^e  have  them  in  the  list  here  at  7,500  tons.  Of  ccnirse  we  would 
have  to  run  them  for  long  distances,  and  we  would  Uke  them  of 
seven  or  eight  thousand  tons.  And  at  7,500  tons,  we  want  four  of 
those. 

The  Chairman.  Tliose  are  coUiers  to  accompany  the  fleet? 

Admiral  Benson.  Yes,  sir. 

The  Chairman.  They  would  have  to  have  a  base  of  supplies,  and 
if  we  had  a  large  merchant  marine  the  ordinary  type  of  ship 

Admiral  Benson.  I  might  add  here,  sir,  that  we  have  provided 
for  that  by  what  we  term  the  "service"  collier;  that  is,  it  would  run 
between  the  base  of  supply  and  the  fleet.  .tVnd  we  need,  as  I  say, 
for  one  of  those  long  campaigns  at  least  200  of  those,  and  we  would 
want  them  to  carry  about  5,000  tons  or  more. 

Mr.  Hardy.  Two  hundred  what  ? 

Admiral  Benson.  Two  hundred  service  colliers  to  go  from  the 
fleet  to  the  base  of  supply.  For  instance,  if  we  were  getting  our 
coal — if  we  were  operatino;  across  the  Pacific,  the  n  ason  we  would 
want  such  a  number  would  be  because  there  would  be  a  long  dis- 
tance for  them  to  cover,and  they  would  have  to  be  going  and  com- 
ing aU  of  the  time.  And,  as  you  understand,  with  ships  operating 
in  time  of  war  in  the  face  of  the  enemy  they  have  to  move  at  high 
speed,  or  be  ready  to  move  at  high  speed  at  a  moment's  notice. 
Eveiything  has  to  be  tuned  up  to  high  speed. 

Mr.  Hardy.  I  would  like  to  correct  an  impression  I  got  when  you 
first  started.     You  said  something  about  being  short  100,000  tons. 


244      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Admiral  Benson.  Between  four  and  five  hundred  thousand  tons. 

Mr.  Hardy.  Along  that  line,  my  memory  is  that  I  saw  a  statement 
by  the  Secretary  of  the  Treasury  as  coming  in  answer  to  a  letter  by 
him  to  the  Secretary  of  the  Navy  which  was  answered,  however,  by 
the  Acting  Secretary,  or  perhaps  by  yourself 

Admiral  Benson.  Yes',  sir;  it  was. 

Mr.  Hardy,  And  in  that  statement,  as  I  remember,  you  stated 
that  the  needs  of  the  Navy  for  auxiliary  craft  amounted  to  consider- 
ably over  1,000,000  tons.  I  woidd  like  to  have  you  tell  us  just  what 
your  statement  was. 

Admiral  Benson.  As  I  remember  it  then,  and  as  I  got  it  from  the 
data,  it  was  about  one  million,  two  or  three  hundred  thousand. 

Mr.  Hardy.  A  million  and  a  quarter  tonnage  of  large  vessels,  and 
it  seems  to  me  you  said  three  or  four  hundred  smaller  vessels  ? 

Admiral  Benson.  They  were  short,  if  I  remember,  three  or  four 
hundred  thousand  tons. 

Mr.  Edmonds.  I  can  give  you  the  statement  from  the  Secretary 
of  the  Navy's  letter.     I  have  it  right  here.     It  says: 

There  would  be  required  400  merchant  vessels  for  auxiliaries,  with  a  total  of  1,172,000 
gross  tonnage.  In  addition  to  the  above,  should  our  own  coast  be  invested  or  even 
occasionallv  visited,  there  would  be  required  a  large  number  of  small  vessels  fitted  for 
mine  sweeping,  say  at  least  324  of  such  vessels  of  about  150  gross  tons  each. 

Mr.  LoLT).  That  would  be  colliers  ? 

Mr.  Edmonds.  That  covers  colhers,  scout  ships,  and  everything. 

Mr.  Hardy.  That  includes  what  we  already  have  and  what  we 
would  have  to  get.  How  much  of  that  have  we  already,  and  how 
much  would  we  need  ? 

Admiral  Benson.  The  conditions  are  practically  the  same  now  as 
th?y  were  at  the  time  this  letter  was  written;  that  is  to  say,  we  need 
about  500,000  tons. 

Mr.  Edmonds.  I  think  that  is  probably  right,  Judge  Hardy, 
because  it  says  here  that  for  fleet  colliers  the  number  required  is  four, 
and  the  admiral  says  we  have  a  certain  number  and  would  require 
four  more.  And  so  it  is  evident  this  is  only  made  to  cover  the  present 
requirements  of  the  Navy. 

Mr.  Hardy.  That  is  the  total  requirement.  What  I  want  to  get  is 
what  they  already  have  and  what  they  have  to  get. 

Mr.  Edmonds.  They  would  be  deducted  ? 

Mr.  Hardy.  I  understood  the  admiral  to  say  we  need  about 
500,000  more  tons  than  we  have. 

Admhal  Benson.  Yes,  sir;  we  need  500,000  tons  of  additional  dis- 
placement to  the  present  auxiliaries  to  bring  the  present  auxiliaries  ' 
up  to  what  they  should  be ;  I  mean  when  the  fleet  is  brought  up  to  its 
proper  standing. 

Ml'.  Byrnes.  As  I  remember  reading  that  letter  which  Mr.  Edmonds 
has,  in  the  letter  the  admiral  stated,  as  I  recall  distinctly,  the  number 
we  now  have  and  stated  how  many  we  would  require  after  counting 
those  now  in  the  service. 

Mr.  Hardy.  Ii  that  is  in  the  letter  that  answers  the  question. 

Admiral  Bensox.  The  conditions  are  just  the  same  practically, 
and  that  letter  was  taken  from  the  records  of  the  department. 

^Ir.  Edmonds.  This  is  only  an  extract  from  the  letter.  I  do  not 
have  the  full  letter  here. 


SHIPPING  BOAED,  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE.      245 

Ml-.  Hardy.  T  would  suggest  that  that  letter  be  placed  in  the  record 
at  thi?  point. 

(Copy.) 

Navy  Department, 
Washington,  July  27,  1915. 
The  honorable  the  Secretary  of  the  Treasury. 

Sir:  Referring  to  your  letter  of  the  20th  in.stant,  the  following  information  is  fur- 
nished in  reply  to  your  specific  questions.  If  the  inforu)ation  is  not  sufficiently 
complete,  or  if  you  should  desire  further  information,  I  shall  be  very  glad  to  furnish  it. 

The  ansvver  to  question  No.  1  is  applicable  to  both  {a)  (war  in  tlie  Pacific)  and  ih) 
(war  in  the  Atlantic),  as  in  either  case  it  would  require  the  services  of  our  entire 
fleet  and  the  auxiliaries  enumerated  are  those  required  for  the  fleet. 

1.  Considering  our  Navy  as  it  is  to-day,  and  ha\-ing  reference  to  its  maximum  use- 
fulness and  efficiency  in  time  of  war,  what  merchant  vessels  and  of  what  total  tonnage 
would  be  required? 

There  would  be  required  400  merchant  vessels  for  auxiliaries  with  a  total  of  1,172.000 
gross  tonnage.  In  addition  to  the  above,  should  our  own  coast  be  invested  or  even 
occasionally  visited,  there  would  be  required  a  large  number  of  small  vessels  fitted 
for  mine  sweeping,  say  at  least  H24  of  such  vessels,  of  about  150  gross  tons  each. 

The  above  vessels  are  divided  into  groups,  as  follows: 

(a)  Fleet  Scouts: 

Number  required:  32. 
Characierislics: 

Fast  passenger  vessels,  of  high  speed,  great  steaming  radius,  and  good 

sea-keeping  qualities. 
Speed  not  less  than  IG  knots. 
Not  less  than  3,000  gross  tonnage. 
(6)  District  Scouts: 

Number  required:  20. 
Characteristics: 

Small  coastwise  steamers,  good  sea-keeping  qualities,  fair  steaming  radius. 
Speed  not  less  than  13  knots. 
Gross  tonnage  1,500  to  2,000  tons, 
(c)  Mine  planters; 

Number  required:  5  large;  10  small. 
Characteristics: 

Freight  or  passenger  vessel  with  clear  decks  for  installing  tracks  for  mines . 
Speed  at  least  10  knots. 

Gross  tonnage:  Large,  1,500  tons;  small,  900  tons. 
{d)  Mine  sweepers: 

Number  required:  Not  less  than  324. 
Characteristics: 

Fishing  vessels,  trawlers  of  150  gross  tonnage. 
Speed  10  knots. 
Draft  not  over  12  feet. 
(«)  Fleet  colUers: 

Number  required:  4. 
Characteristics: 

Well-designed  cargo  hatches;  independent  power  and  separate  winches 

for  each  hatch;  cargo  booms  suihcient  and  well  placed. 
Speed  at  least  12  knots. 
Steaming  radius,  6,000  to  8,000  miles. 
Gross  tonnage  not  less  than  5,  000  tons. 
(/)  Service  colliers: 

Number  required:  At  least  200. 
Characteristics: 

Good  facilities  for  discharging  coal  with  booms  and  winches. 
Speed  at  least  8  knots. 
Gross  tonnage  not  less  than  3,000  tons. 
ig)  Depot  colliers: 

Number  required:  57. 
Characteristics: 

Good  qualities  for  discharging  coal  with  booms  and  winches. 
Speed  at  least  8  knots, 
iross  tonnage  not  less  than  3,000  tons. 


I 


246      SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

(h)  Fleet  oilers  (tankers) : 

Number  required:  7. 
Characteristics: 

Good  appliances  for  discharging  cargo. 
Speed  as  near  14  knots  as  possible. 
Gross  tonnage  at  least  3,800  tons 
(t)  Service  oilers: 

Number  required:  35. 
Characteristics: 

Good  towing  facilities,  large  ballast  tanks,  and  appliances  for  discharging 

cargo. 
Speed  at  least  8  knots. 
Gross  tonnage  at  least  3,000  tons. 
(f)  Depot  oilers: 

Number  required:  At  least  5. 
Characteristics: 

Good  appliances  for  discharging  cargo. 
Speed  at  least  8  knots. 
Gross  tonnage  at  least  2,000  tons. 
(k)  Supply : 

Number  required:  6. 
Characteristics: 

Good  facilities  for  handling  stores;   refrigerating  plant  and  cold-storage 

holds  for  meats  and  vegetables. 
Speed  at  least  12  knots. 
Gross  tonnage  at  least  3,000  tons. 

Type  of  vessel:  lowan,  passenger  aervice,  American-Hawaiian  Steam- 
ship Co. 
{I)  Transports: 

Number  required:  4. 
Characteristics: 

Passenger  vessels  capable  of  carrying  at  least  1,000  men  with  their  im- 
pedimenta. 
Speed  at  least  14  knots. 
Gross  tonnage  at  least  4,000  tons, 
(m)  Repair  ships: 

Number  required,  2. 
Characteristics: 

Freighters,  with  at  least  50-foot  beam  with  plenty  of  cargo  apace  between 

decks. 
Speed  at  least  12  knots. 
Gross  tonnage  not  less  than  5,000. 
{n)  Ammimitiou  supply: 

Number  required,  8. 
Characteristics: 

Good  facilities  for  handling  ammunition;  refrigerating  plant. 
Speed  at  least  13  knots. 
Gross  tonnage  at  3,000  tons. 
Type  of  vessel:  "Pastores,"  United  Fruit  Co. 
(o)  Hospital  ship: 

Number  required,  4. 
Characteristics: 

Passenger  vcpsels,  capable  of  carrying  30  sick  officers  and  500  sick  men. 
Speed  at  least  14  knots. 
Gross  tonnage,  6,000  tons. 
(p)  Mine  depot: 

Number  required,  3. 
Characteristics : 

Freighter  with  large  cargo  space  between  decks. 
Speed  at  least  14  knots. 
Gross  tonnage  at  least  4,000  tons. 
iq)  Destroyer  tenders: 

Niimber  required,  2. 
Characteristics : 

Passenger  ship  with  storage  capacity  for  pay  store.'?. 

Speed  at  least  14  knots. 

Gross  tonnage  about  3,500  tons. 


SHIPPlN(i  BOARD,  NAVAL  AUXllJARY,  AND  MKKOHANT  MARINE.      247 

(r)  Siibmariue  tenders: 

Number  required,  2. 
('haracteristi(  s: 

Comhiiiation  freij;ht  and  passenger  vessel. 
Speei  at  least  12  knots. 
Gross  tonnaiie  about  3,5{)0  tons, 
(s)  Fleet  tenders  (tugs j : 

Number  required,  1. 
Characteristics: 

Good  towinfi:  facilities,  seagoing  qualities. 
Speed  at  least  12  knots. 
Gross  tonnage,  500-1,000  tons. 

2.  What  amount  of  tonna^re  ol  merchant  vessels  could  be  constru(;ted  in  our  navy 
yards  in  12  months  without  interfering  with  the  regular  naval  program? 

Taking  vessels  of  about  10.00(1  tons  displacement  and  of  about  20  knots  speed  as 
the  type  that  would  be  built,  it  can  be  stated  positivelj  that  none  could  be  completed 
within  the  first  12  months. 

ApjMoximately  .six  months  would  be  required  to  prepare  plans  and  place  the  orders 
for  the  mateiial  retjuired  for  \  essels  of  a  new  design. 

It  would  therefore  require  about  two  years  to  j^roduce  the  first  shi])e,  and  six  such 
vessels  could  be  constructed  simultaneously  during  that  time.  To  do  this  would  re- 
quire that  the  boilei's  lor  one  ol  these  shi])s  be  ])urchased  from  outside  matmfacturers, 
as  the  navy  yards  are  not  equii)])ed  for  the  construction  of  more  than  five  such  batter- 
ies of  boilers. 

After  t  vo  years  shi[)S  could  continue  to  be  produced  at  the  rate  of  about  7  a  year. 
provided  they  were  reproductions  of  those  already  built. 

The  above  estimates  are  based  upon  the  assumption  that  additional  skilled  men 
could  be  obtained  without  more  than  the  usual  delay.  If  it  were  intended  to  supple- 
ment the  facilities  of  the  yjrivate  yards  by  those  of  the  navy  yards,  the  question  of 
obtaining  the  requisite  skilled  labor  would  become  the  mostserious  feature  and  would 
materially  delay  the  delivery  of  the  first  vessels. 

The  following  tabulation  shows  the  conditions  at  each  yard: 

Boston,  Mass.:  Hull  of  first  vessel  in  two  years,  machinery  in  two  and  one-half  years, 
after  which  one  vessel  a  year  can  be  supplied. 

New  York,  N.  Y.:  Hulls  of  two  vessels  in  two  years  and  machinery  for  one  in  same 
time.  After  first  vessels  completed,  two  vessels  a  year  can  be  turned  out  com- 
plete at  this  yard. 

Philadelphia,  Pa.:  Hull  of  first  vessel  in  two  years,  machinery  in  two  years,  except 
boilers,  which  would  have  to  be  procured  elsewhere.  After  first  vessel  is  com- 
pleted, one  vessel  a  year  can  be  turned  out. 

Norfolk,  Va. :  Hulls  of  two  vessels  in  two  years,  and  machinery  for  one  in  two  and  one- 
half  years.    After  first  vessel  is  completed  one  vessel  a  year  can  be  turned  out. 

Mare  Island,  Cal. :  Hull  and  machinery  of  first  vessel  in  two  years,  after  which  one  ves- 
sel a  year  can  be  turned  out. 

Puget  Sound,  Wash.:  Hull  and  machinery  of  first  vessel  in  two  years,  after  which  one 
vessel  a  year  can  be  turned  out. 

Portsmouth,  N.  H.,  and  Charleston,  S.  C,  can  not,  without  great  expense,  be  made 
ready  for  such  construction  work,  but  these  yards  would  be  utilized  to  specialize 
in  furnishing  parts  to  all  the  other  yards  for  constructional  purposes. 

After  the  first  tv o  jears  it  Mould  be  possible  to  materially  increase  the  number  of 
vessels  turned  out,  as  v  ell  as  to  reduce  the  time  of  construction.  In  certain  cases 
this  reduction  m  ould  be  as  much  as  six  months,  but  as  both  the  nimiber  of  ships  and 
the  time  of  construction  depend  upon  largely  increasing  the  facilities  of  the  various 
yards  during  the  first  t  ■  o  years,  it  is  not  practicable  to  estimate  with  accuracy  vhat 
the  production  vould  be. 
Sincerelv,  vours, 

W.    S.    liENSON, 

Acting  Secretary  of  the  Amii/. 

^'tr.  Greene.  I  would  like  to  ask,  Admii'al,  al)Out  what  would  bo 
the  averfige  cost  of  those  vessels  that  you  suggest;  al)Out  what  would 
be  the  cost  of  each  vessel,  and  how  many  would  you  need  ? 

Admiral  Benson.  1  or  these  feet  colliers,  I  think  we  have  been 
paying  about  .$1,000,000.    At  the  present  price — of  course  they  have 


248      SHIPPING  BOAED,  NAVAL  AUXILfARV,  AND  MERCHANT  MARINE. 

gone  up  a  great  deal — I  suppose  they  are  about  $1,770,000;  either 
a  million  and  a  half,  or  a  million  and  three-quarters. 

^ir.  Loud.  Is  that  the  present  large  type  of  colliers  ? 

Admiral  Benson.  I  am  simpl}"  gi^'ii^g  it  oiihand,  sh*. 

Mr.  LoiT).  The  first  ones  I  do  not  think  cost  over  SeOO,000,  and  the 
next  ones  cost  a  million  or  a  little  more  than  that — the  later  ones. 

Admiral  Benson.  I  was  judging  a  great  deal  from  the  fact  that  I 
just  happened  to  remember  we  are  buildmg  a  10,000-ton  transport 
at  the  Philadelphia  yard  for  about  SI, 300,000.  A  collier  would 
practicallv  be  the  same,  or  would  ])robabl5'  cost  a  little  more  than 
that. 

Mr.  Greene.  It  was  not  with  the  idea  of  expecting  to  faid  the  cost 
would  be  so  great  that  we  could  not  have  them.  I  just  wanted  to 
have  the  information  as  to  what  it  would  be,  because  we  would  have 
to  have  them  anyway. 

Mr.  Goodwin.  Did  I  understand  you  to  say.  Admiral,  that  we  now 
need  200  additional  coUiers  to  supph'  the  ships  from  the  different 
bases  ? 

Admiral  Benson.  Not  only  coUiers,  but  aU  types  of  auxiliaries — 
about  500,000  tons. 

Mr.  Goodwin.  About  what  would  be  the  average  cost  of  the  pro- 
posed auxiliaries  when  fully  equipped  and  fitted  out  with  guns  ? 

Admiral  Benson.  I  have  a  list  of  the  figures  here.  The  Kariav:lia 
was  built  for  $1,140,000.  That  is  the  contract  price  for  the  huU  and 
the  machinery.  The  contract  price  for  the  Mau7nee,  which  is  being 
built  at  the  Mare  Island  yard,  is  31,140,000;  and  then  the  figures  run 
$990,000  for  one:  $889,000  for  another,  $990,000  for  another,  and 
$951,000  for  another.  Of  course,  the  guns  and  other  arrangements 
would  be  additional — a  few  thousand  dollars  more. 

The  Chair:\ian.  What  type  of  ship  are  you  speaking  of,  cruisers? 

Admiral  Benson.  Fleet  coUiers.  I  thought  the  committee  was 
asking  for  fleet  colliers. 

The  Chairman.  That  is  not  the  type  of  collier  that  is  used  for 
ordinary  commercial  purposes,  is  it? 

Admiral  Benson,  That  is  the  kind  of  coUier  of  which  we  would 
want  four,  to  make  14  knots  and  to  carry  from  ten  to  twelve  thousand 
tons  of  coal.     That  is  the  type  I  had  reference  to  then. 

Mr.  Curry.  Should  they  not  be  naval  ships,  built  by  the  Navy 
and  controlled  by  the  Navy,  and  not  a  merchant  ship  to  be  trans- 
ferred ?  *  The  Navy  needs  those  ships  now,  and  should  it  not  have 
entire  control  of  them  ? 

Admiral  Benson.  We  do  need  a  certain  number;  but  we  have,  just 
at  the  present  time,  for  the  present  needs  of  the  fleet,  practically  as 
many  of  these  vessels  as  we  need.  Of  course  as  we  increase  the  size 
of  the  fleet,  in  case  of  calling  the  whole  fleet  into  active  commission, 
we  would  need  more  coUiers.  But,  as  I  said  just  now,  the  idea  is  not 
to  keep  the  whole  fleet  always  in  active  commission  cruishig  about, 
and  I  believe  the  present  number  of  colliers  that  we  have  would 
practicaUy  keep  the  fleet  going  as  it  is  being  conducted  at  present. 
And  if  we  could  have  some  of  the  same  tvpe  of  vessels  built  under 
Government  supervision,  and  with  the  understanding  that  in  case  of 
war  they  would  be  immediately  available  for  the  Government  service, 
I  see  no  reason  in  the  world  why  it  should  not  be  done,  and  to  allow 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      249 

these  vessels  to  be  used  for  commercial  purposes  until  they  are  needed 
by  the  Navy  for  war  purposes. 

Mr.  CuKRY.  Do  you  know,  Admiral,  of  any  reason  why  the  colliers 
and  the  transports  of  the  Government  that  are  not  being  used  at  the 
present  time  shoidd  not  be  used  to  relieve  the  congested  conditions  ? 

Admiral  Benson.  I  do  not  think,  sir,  that  we  have  any  to  be  util- 
ized for  that  purpose.  For  iiistance,  just  at  present,  we  are  ver}'^  hard 
put  to  get  fuel.  We  are  maintahiing  a  ship  ni  the  Mediterranean  and 
one  down  on  the  African  coast,  and  I  have  been  very  hard  put  to 
keep  that  vessel  supplied  and  the  vessels  that  are  operating  in  the 
West  Indies  and  out  on  the  west  coast  in  the  Pacific.  But  we  have 
so  far  and  we  can,  by  proper  arrangemejit,  keep  the  fleet  going  with 
the  number  that  we  have.  For  instance,  at  the  present  time  we  are 
utilizing  some  of  the  colliers  to  send  some  coal  to  Cavite,  and  we  have 
had  to  send  some  colliei-s  out  there  and  to  the  other  stations  in  the 
Philippines.  On  ac('ount  of  the  congested  conditions  of  the  freights 
we  have  been  compelled  to  supply  the  navy  yards  along  the  east  coast 
with  coal,  and  we  have  used  the  colliers  for  this  purpose.  But  under 
normal  conditions,  A\ith  the  raih'oads  operating  and  business  being 
conducted  under  normal  conditions,  I  believe  the  colliers  we  now  have 
would  be  sufficient  to  keep  the  fleet  gohig  as  we  are  now  conducting  it. 

Mr.  Curry.  Do  you  know  about  the  transports,  as  to  whether  they 
are  all  being  used — the  Army  transports? 

Admiral  Benson:  That  I  do  not  know,  sir.  In  regard  to  the  Army 
transports,  if  you  remember,  there  was  a  line  of  steamers  operating 
ill  the  Pacific  for  a  while,  and  we  depended  on  them  to  get  supplies 
back  and  forth  to  Guam,  to  our  naval  station  out  there;  but  now  that 
line  has  been  withdrawn,  and  the  needs  of  the  Army  for  gettmg 
supplies  to  the  Philippines  are  so  great  that  we  have  been  compelled 
to  utilize  the  services,  as  far  as  we  can,  of  a  line  of  scliooners  running 
from  San  Francisco  to  Guam  and  out  in  the  East.  Of  course,  in  case 
of  necessity  the  Army  is  good  enough  to  allow  us  a  certain  amount 
of  space  on  tlie  transports.  It  is  very  limited,  and  we  can  only 
depend  on  that  where  necessity  exists;  but,  of  course,  where  it  is  a 
case  of  necessity  the  Army  always  gives  us  the  space  that  is  actually 
needed. 

Mr.  Curry.  If  the  United  States  Government  went  mto  the  mer- 
chant marine  business  and  a  merchant  marine  ship  owTied  by  the 
Government  should  be  picked  up  by  a  belligerent  and  taken  into 
a  prize  court,  either  in  Great  Britam  or  Germany,  what  effect  do  you 
think  that  would  have  on  the  friendly  relations  between  the  two 
nations  ? 

Admiral  Benson.  As  I  understand  this  biU,  sir,  that  point  is  cov- 
ered by  saying  when  they  are  operating  as  merchant  ships  that  the 
United  States  surrenders  that  particular  feature  of  sovereignty;  that 
is  my  understanding  of  the  bill. 

The  Chairman.  They  are  operated  through  a  corporation  and  the 
Government  controls  the  corporation  through  a  majority  ownership 
of  the  stock;  but  for  all  other  purposes  it  is  the  same  as  a  private 
corporation. 

Mr.  Curry.  The  Government  owns  the  corporation,  and  we  do  not 
expect  anyone  to  put  any  money  in  this  except  the  Government, 
and  they  will  be  Government  owned  ships,  and  the  Government  will 


250      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

receive  the  profits  and  stand  the  losses.  And  now  if  that  Government- 
owned  ship  was  taken  into  a  prize  court,  was  taken  up  by  a  belligerent 
and  taken  into  a  prize  court,  would  that  not  be  looked  upon  as  a 
more  unfriendly  act  than  if  the  ship  were  owned  by  me  or  by  you  ( 

Admiral  Benson.  In  my  opinion,  sir,  there  is  a  veiy  delicate  point 
of  international  law  involved  in  the  question,  and  its  ultimate  deci- 
sion would  depend  entirely  upon  the  way  the  bill  is  drawn.  My  idea 
in  reading  over  the  bill,  was  that  Congress  would  cover  that  particular 
feature  of  international  law,  and  this  point  would  not  be  called  into 
consideration. 

Mr.  Edmonds.  It  can  not  be  covered  m  this  bill,  for  the  reason 
that  the  board  is  to  purchase,  construct,  and  charter  ships,  and  also 
to  recharter  ships  to  be  operated  either  by  the  company  as  a  tool 
of  the  Government  or  outside  of  the  operating  company.  The  third 
section  of  this  bill  provides  that  the  Government  board  shall  pur- 
chase, construct,  and  charter  ships,  and  it  has  also  the  privilege  of 
rechartermg  ships.  And,  of  course,  when  one  of  those  ships  is  rechar- 
tered,  while  the  ownership  remams  entirely  in  the  Government,  it  has 
nothing  to  do  with  the  operating  company. 

Mr.  Curry.  But  then  the  operating  company  is  under  the  control 
of  the  Govermnent  ? 

Mr.  Saunders.  Having  in  mind.  Admiral,  that  delicate  question 
you  present,  that  would  certainly  be  to  the  front  if  at  the  time  the 
ship  was  operating  the  Government  owned  all  the  stock  in  the  com- 
pany. This  bill  provides  for  a  majority  and  a  minority  stock  owner- 
ship, if  you  can  get  anybod}^  to  take  that  stock;  but  in  the  event  that 
it  was  not  taken  and  all  of  the  stock  was  owned  by  the  Government 
and  the  operation  of  the  company  under  those  conditions,  that  delicate 
question  of  difficulty  which  you  have  in  mind  would  certainly  be  to 
the  front  then,  would  it  not  \ 

Admiral  Benson.  It  certainly  would,  I  think.  And  I  do  not  see 
how  you  could  avoid  it  unless  in  the  passage  of  the  bill  the  Govern- 
ment committed  itself  to  the  principle  that,  having  gone  into  this  kind 
of  commercial  use,  if  it  is  a  Government-owned  vessel,  and  in  case  of 
war  the  vessel  were  taken  into  a  prize  court,  that  the  Government 
would  allow  its  vessels  to  be  treated  in  the  same  way  that  the  ordinary 
merchant  or  privately  owned  vessels  are  treated  and  would  waive  that 
feature,  as  I  said,  of  sovereignty.  I  do  not  see  how  else  it  could  be 
avoided. 

Mr.  Curry.  Even  though  the  Government  should  be  willing  to  do 
that,  do  you  not  think  if  a  Government-owned  ship  were  picked  up 
by  a  belligerent  under  those  conditions,  that  it  would  set  the  people 
on  fire  and  they  would  get  rather  more  belligerent  than  they  would  if 
the  ship  belonged  to  me  or  to  you  ? 

Admiral  Benson.  That  would  depend  a  great  deal  upon  the  con- 
dition of  public  feeling  at  the  time,  I  think. 

The  Chairman.  Right  at  that  point,  I  suppose  Mr.  Curry  has  a 
notion  that  the  Government  would  be  more  sensitive  of  its  rights 
because  of  the  fact  that  the  ownership  of  the  ship  was  in  the  Govern- 
ment and  the  ship  was  o]3erated  through  this  corporation,  than  if  it 
belonged  to  an  American  citizen.  He  differentiates  between  the  rights 
of  American  citizens  and  of  the  Government  itself. 

Admiral  Benson.  As  I  understand  that  feature,  it  would  be  this 
sir,  that  when  you  attack  anything  belonging  to  the  Government 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARIN li,      251 

you  attack  every  citizen  of  the  Republic;  while  if  you  attack  an 
individual,  that  is  a  separate  proposition. 

Mr.  Saunders.  Under  the  head  oi  what  you  call ' '  naval  auxiliaries," 
they  are  not  fightmg  ships,  as  I  understand,  are  they  ? 

Admiral  Benson.  No,  sir;  but  they  would  carry  a  certam  battery 
in  time  of  war.  Some  of  our  vessels  which  we  have  now  carry  a 
small  battery  of  light,  small-caliber  guns. 

Mr.  Saunders.  As  I  understand  in  a  general  way  what  you  mean 
by  "naval  auxiliaries,"  they  would  be  ships  that  would  carry  fuel, 
whether  oil  or  coal,  food  of  different  sorts,  and  all  the  material  that 
would  be  necessary  in  connection  with  the  operation  of  a  ship — 
ammunition,  etc.  'i 

Admiral  Benson.  Yes,  sir. 

Mr.  Saunders.  Taking  the  ordinary  ship  that  was  purchased 
under  this  bill  and  put  into  operation  as  part  of  a  commercial  line 
between  here  and  South  America — would  that  ship  be,  unless  it 
were  specially  constructed  with  reference  to  the  purpose,  available 
for  carrying  frozen  meats?  Take  the  ordmary  Imer  operatmg  in 
the  trade  between  here  and  South  America,  picked  up  and  bought 
for  that  purpose,  could  you,  in  time  of  war,  use  that  as  a  frozen-meat 
carrier  without  overhauling 'or  reconstructmg  the  interior? 

Admiral  Benson.  There  are,  for  instance,  certain  shi])&  that  do 
carr}'  frozen  meat.  There  have  been  several  cargoes  of  meat  l)iought 
into  this  country  from  Argentina. 

Mr.  Saunders.  I  understtind,  but  I  am  taking  a  shi])  not  engaged 
in  that  particular  business.  I  want  to  know  if  you  have  in  mind 
that  in  the  pm'chrcse  of  these  shi])s  you  would  have  to  purchase  one 
or  more  ships  for  that  very  purpose,  in  time  of  ])eace,  of  transporting 
frozen  meats,  should  you  want  to  avail  yourself  of  it  in  time  of  war. 

Admiral  Benson,  i  xactly,  sir;  and  as  if.st  as  merchant  shi]>s  are 
built  in  this  country,  we  get  their  characteristics  {ind  know  every- 
thing about  them,  arid  we  have  a  list  of  them  rnd  we  know  the  owners, 
and  we  have  even  gone  so  far  as  to  draw  up  the  contracts  and  every- 
thing of  that  kind,  and  we  know  just  exactly  for  what  we  can  use 
them,  and  whether  they  have  proper  refrigerator  phmts  and  how 
many  pounds  of  meat  they  will  caiTy. 

Mr.  Saunders.  That  is  what  I  have  in  mind. 

Admiral  Benson.  We  have  all  of  that  data  now. 

Mr.  Saunders.  In  order  that  any  of  those  ships  contemplated  by 
this  bill  could  he  utilized  in  time  of  war,  as  frozen  meat  carriers,  they 
would  have  to  be  bought  up  and  constructed  under  the  bill  in  refer- 
ence to  that  particular  piu't  ose? 

Admh'al  Benson.  J  xactly.  * 

Mr.  Saunders.  Take  j^our  ordinary  merchant  ships  between  here 
and  South  America,  for  instance  one  of  those  shi])s  used  in  the  fruit 
trade,  in  which  there  is  now  a  considerable  business;  would  that 
ship,  if  wanted  for  use  in  time  of  war,  be  available  as  an  oil  or  coal 
carrier,  or  would  that,  too,  have  to  be  constructed  in  the  beginning 
with  relerence  to  that  particular  use  ? 

Admiral  Benson.  You  mentioned  fruit  steamers.  We  have  them 
listed  for  a  very  particular  purpose,  and  they  could  be  immediately 
used  for  that  purpose  practically  without  any  change  at  all,  for  cer- 
tain purposes  for  which  we  intend  to  use  them  and  for  which  we  have 
them  listed.     And  we  would  naturally  take  the  vessels  that  were 


252      SHIPPING  BOARD,  NAVAJ.  AUXILIARY,  AND  MERCHANT  MARINE. 

being  utilized  for  carrying  coal  or  oil,  as  the  case  might  be,  and  utilize 
them  for  the  same  purpose  in  the  Navy. 

The  Chairman.  You  would  not  use  them  for  carrying  frozen  meats, 
would  you? 

Admiral  Benson.  No. 

The  Chairman.  Or  fruits  ? 

Admiral  Benson.  No;  we  would  not. 

The  Chairman.  But  if  there  were  not  any  vessels  of  the  particular 
type  you  wanted,  of  course  there  would  have  to  be  others  provided? 

Admiral  Benson.  They  would  have  to  be  provided ;  and  I  take  it 
that  in  the  construction  of  those  ships,  under  this  bill,  that  feature 
would  be  looked  after. 

Mr.  Saunders.  If  those  ships  are  to  be  utilized  in  war  times  for 
those  special  purposes,  in  purchasing  you  would  have  to  purchase 
with  a  view  to  that  ?  In  other  words,  you  would  have  to  purchase 
ships  with  a  view  to  use  in  the  frozen-meat  business,  and  between  now 
and  war  times  they  would  have  to  be  used  in  the  frozen-meat  business. 
And  now,  with  respect  to  coal,  I  come  back  to  the  question  I  was 
asking  with  respect  to  the  fruit  steamers:  You  could  not  use  that 
steamer  in  war  times  as  a  collier  ? 

Admiral  Benson.  Oh,  no.  *   - 

Mr.  Saunders.  And  then  we  would  have  to  purchase,  under  this 
bill,  if  you  would  want  to  turn  them  into  colliers  in  war  times,  ships 
which  could  be  used  in  the  intermediate  time  for  coal-carrying 
purposes  ? 

Admiral  Benson.  Yes. 

Mr.  Saunders.  And  so  on  for  the  purposes  under  this  bill  all  the 
way  through.  Taking  the  ships  we  would  purchase  under  this  bill 
that  could  be  used  in  the  ordinary  commerce  between  here  and  South 
America,  those  carrying  the  products  of  that  country,  such  as  tramp 
steamers,  in  regard  to  their  utility  in  war  times,  for  what  particular 
purpose  would  they  be  used  ? 

Admiral  Benson.  It  would  depend  upon  their  speed  and  the 
general  arrangement  of  their  holds,  w^hether  or  not  they  had  a 
refrigerating  plant  on  board,  and  so  forth. 

Mr.  Saunders.  I  am  just  taking  the  ordinary  steamer  that  is  used 
between  here  and  South  America. 

Admiral  Benson.  They  would  probably  be  utilized  for  what  we 
call  "service  colliers;"  just  simply  for  dumping  coal  into  the  holds. 

Mr.  Saunders.  Would  the  ordinary  steamer  be  available  for  that 
purpose  without  any  special  construction  ? 

Admiral  Benson.  A  large  number  of  them  would,  with  a  very 
small  expenditure.  Of  course,  most  any  of  those  ships,  in  time  of 
war,  for  instance,  if  they  did  not  have  a  proper  radio  outfit,  we  would 
have  to  supply  them  with  a  radio  outfit  for  one  thing,  and  then  some 
system  of  signaling  should  be  put  on  board.  And  as  these  vessels 
are  inspected  all  of  these  features  are  taken  into  consideration  and 
they  are  assigned  to  the  type  which  they  nearest  approach;  that  is, 
as  we  get  them  now,  as  they  are  built  by  the  ordinary  corporations, 
a,nd  so  on.  And  then  some  of  them  would  not  exactly  fill  the  bill 
but  approach  very  nearly  what  we  wanted,  the  changes  that  would 
be  necessary  are  all  listed,  and  we  know"  exactly  where  any  vessel 
would  be  sent  and  just  exactly  what  would  be  done.     And  we  not 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      253 

only  know  that  here  in  the  Navy  Department,  but  the  yard  to  which 
they  would  be  sent  knows  just  exactly  what  vessels  would  come  there 
and  what  would  have  to  be  done  on  them  in  order  to  fit  them  for  the 
purpose  for  which  they  are  intended  in  time  of  war. 

Mr.  Saunders.  I  understand  about  that;  but  the  thought  I  was 
trying  to  get  at  was  in  connection  with  our  purpose  under  this  bill, 
of  how  we  woidd  have  to  purchase  ships  in  order  to  make  them  use- 
ful. This  bill  has  in  contemplation  an  ordinary  commercial  busi- 
ness— a  merchant-marine  business.  Suppose  we  had  half  a  dozen 
ships  to  buy  under  this  bill,  such  as  the  fruit  steamers  are,  and  we 
undertook  to  put  them  into  the  fruit  business  and  other  commercial 
operations  between  here  and  Central  America  and  portions  of  South 
America,  for  what  purpose  would  those  ships  be  available  in  time 
of  war  if  they  were  taken  over  ? 

Admiral  Benson.  In  order  to  comply  with  the  spirit  of  the  bill, 
as  I  understand  it,  it  would  be  necessary  to  take  this  list  which  I 
have  here,  which  has  been  very  carefully  gone  over  by  the  General 
Board,  and  we  have  worked  out  exactly  what  we  want;  and  if  the 
vessels  we  were  going  to  purchase  would  not  answer  one  of  those 
types,  we  would  not  buy  it,  and  we  could  not  according  to  the  spirit 
of  the  bill. 

Mr.  Saunders.  Then,  in  purchasing  vessels  under  the  spirit  of 
this  bill,  we  would  primarily  have  to  get  ships  that  would  fill  the  re- 
quirements that  you  have  in  mind  there  ? 

Admiral  Benson.  They  would  have  to  fill  some  requirements  that 
we  have  in  this  list;  otherwise  I  do  not  think  the  ships  could  be  pur- 
chased under  the  spirit  of  the  bill. 

Mr.  Saunders.  A  great  body  of  ships  that  would  be  very  effective 
for  ordinary  commercial  purposes  on  the  high  seas  in  the  various 
lines  of  intercourse  between  here  and  other  countries,  would  not  be 
of  any  particular  utility  in  time  of  war  ? 

Admiral  Benson.  On  the  contrary,  sir,  most  of  them  could  be  util- 
ized for  that  purpose. 

Mr.  Saunders.  I  am  trying  to  brmg  out,  takmg  the  ordUiary 
steamer,  the  particular  utility  that  that  would  have.  Take  the  ordi- 
nary tramp  steamer  that  comes  into  a  port  of  4,000,  5,000,  or  6,000 
tons,  or  even  10,000  tons,  for  that  matter,  wliich  loads  a  miscel- 
laneous cargo  ? 

Admiral  Benson.  That  could  be  utilized  for  carrying  thousands 
of  tons  of  the  ordinary  provisions.  It  would  be  a  mixed  cargo,  just 
as  they  are  carrying  now,  sir.  We  would  have  a  need  for  a  number 
of  those. 

Mr.  Saunders.  A  steamer  of  that  sort,  however,  would  not  be 
valuable  for  the  scouting  piu*poses  that  you  spoke  of? 

Admiral  Benson.  Not  unless  of  high  speed,  of  over  16  knots,  it 
would  not. 

Mr.  Saunders.  What  is  the  ordinary  speed  of  the  commercir.l  line 
steamers,  if  there  is  any  such  thing?  Can  you  give  the  average  of 
that  for  transportation  purposes? 

Admiral  Benson.  Do  you  mean  at  present? 

Mr.  Saunders.  Yes. 

Admiral  Benson.  I  should  unagine  the  ordinary  tramp  steamer, 
as  you  express  it,  going  from  here  to  South  America  would  average 
probably  12  to  14  knots. 

32910—16 17 


254      SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Saunders.  With  the  Imiited  appropriation  contemplated 
under  this  bill,  with  all  the  steamers  that  would  be  available  as  col- 
liers in  time  of  war,  steamers  that  would  be  available  as  oil  carriers 
in  time  of  war,  steamers  that  would  be  available  by  reason  of  their 
original  construction  for  carrying  frozen  meat  in  time  of  war,  and 
steamers  that  would  be  fast  enough  to  be  utilized  as  scouts  in  time 
of  war,  you  would  have  a  miscellaneous  collection  or  assortment 
of  ships  that  could  hardly  be  utilized  to  build  up  any  established 
line,  for  instance,  as  we  have  between  the  United  States  and  Europe 
or  the  United  States  and  South  America,  could  they? 

Admiral  Benson.  As  I  understand  it,  you  contemplate  establishing 
several  lines  and  the  demands  that  one  Une  of  vessels  would  require 
would  be  different  from  another.  For  instance,  in  course  of  time  it  is 
easy  to  imagine  that  you  might  want  fast  passenger  steamers  running 
between  our  coast  and  South  America,  that  woiud  be  able  to  answer 
the  purpose  of  scouts.  And  you  might  want  to  carry  a  little  higher 
class  of  freight,  or  you  might  want,  for  instance,  between  certain 
ports;  as  I  understand  it  and  my  experience  has  been,  a  ship  that  is 
constructed  and  fitted  out  for  a  particular  purpose.  Take  the  Pa- 
cific Mail  ships  that  run  out  across  the  Pacific;  they  would  answer 
very  well  for  scouts;  and  if  these  are  sea-going  ships  in  ordinary 
weather  even  vessels  that  would  run,  say,  from  San  Francisco  to 
New  York,  through  the  canal,  would  undoubtedly  have  sufficient 
speed  and  carrying  capacity  to  answer  almost  any  purpose  for  which 
we  wanted  them. 

Mr.  Saunders.  A  ship  with  respect  to  space  construction  that  I 
speak  of,  for  instance,  like  those  meat,  oil,  or  coal  carriers;  they  would 
not  be  available  for  general  purposes  in  commercial  transportation, 
and  they  would  have  to  be  confined  to  that  particular  Une  of  work,  I 
suppose  ? 

Admiral  Benson.  I  do  not  think  so,  sir.  For  instance,  I  do  not 
see  any  reason  why  the  big  colliers  that  carry  12,500  tons  of  coal,  and 
you  wanted  to  use  them  for  general  cargo  purposes,  could  not  be 
suited  for  that  purpose. 

Mr.  Saunders.  They  would  be  available  ? 

Admiral  Benson.  Yes,  sir. 

Mr.  Saunders.  How  about  frozen-meat  ships  ? 

Admiral  Benson.  A  frozen-meat  ship  is,  of  course,  a  specially  de- 
signed vessel.  But  I  do  not  think  we  would  have  any  difficulty  in 
that,  because  from  present  appearances  the  trade  between  this  country 
and  Argentina  in  frozen  meats  will  probably  increase.  Of  course, 
you  would  want  vessels  of  fairly  good  speed,  and  which  would  have 
large  spaces  that  could  be  kept  refrigerated  at  all  times. 

Mr.  Saltnders.  An  oil  tanker,  though,  I  suppose  would  not  be 
available  for  anything  else  except  the  transportation  of  fuel  oil. 

Admiral  Benson.  Not  very  well.  I  can  not  imagine  of  any  other 
use. 

Mr.  Saunders.  But  for  the  ordinary  colliers,  do  I  understand,  if 
you  wanted  to  transport  such  miscellaneous  cargoes  as  go  between 
New  York  and  Europe,  for  instance,  in  those  fast  passenger  boats  or 
in  the  ordinary  tramp  steamers,  that  a  collier  would  be  suitable  for 
that  sort  of  commercial  traffic  ? 

Admiral  Benson.  I  think  so,  sir;  that  is,  for  a  cargo  steamer.  For 
instance,  suppose  you  take  a  collier  leaving  to-day  or  to-morrow  for 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      255 

tho  Mediterranean,  instead  of  filling  up  all  spaces  with  coal,  they 
would  take  some  of  the  hold  space  and  put  a  miscellaneous  cargo  in  it; 
and  if  they  wanted  to  carry  more  of  that  character  of  cargo  they 
would  simply  take  up  more  of  the  space.  There  would  be  no  reason 
in  the  world  why  those  colliers  should  not  be  utilized  for  carrying 
miscellaneous  cargoes. 

The  CnAiR:MAN.  Judge  Saimders  seems  to  have  the  impression  that 
ships  adapted  to  carrj-ing  frozen  meat  are  not  adapted  to  carry  any 
thing  else. 

Mr.  Saunders.  I  am  just  developing  that  fact,  to  find  out. 

The  Chairman.  Take  the  American-Hawaiian  ships ;  they  are  most 
modern  in  construction.  Their  principal  cargo  is  sugar,  but  they  are 
adapted  not  only  to  carrying  sugar,  but  general  cargoes,  and  they 
have  a  certain  part  of  the  space  for  refrigerator  purposes,  to  carry 
frozen  meats,  and  they  also  carry  coal. 

Admiral  Benson.  I  do  not  think  they  carry  coal. 

The  Chairman.  They  carry  a  general  cargo. 

Admiral  Benson.  I  think  they  carry  a  general  cargo,  but  I  do  not 
believe  that  with  those  vessels  you  could  economically  cany  coal, 
because  they  are  probably  divided  up  in  spaces  in  such  a  way  as  not 
to  be  suitable  for  that  purpose.  And  they  have  various  ways  of 
getting  at  the  different  hold  spaces.  For  instance,  you  take  the 
Hawaiian  steamers.  I  am  not  sufficiently  familiar  with  all  of  their 
internal  construction;  there  might  be  places  where  they  could  carry 
some  coal,  if  the  hold  was  vacant,  there  is  no  reason  why  they  could 
not  have  coal  put  in. 

The  Chairman.  But  they  are  adapted  to  a  general  cargo  ? 

Admiral  Benson.  Yes,  sir. 

The  Chairman.  They  are  also  adapted  in  part,  as  I  understand, 
to  carrying  a  thousand  or  more  tons  of  frozen  meat. 

Admiral  Benson.  Anything  that  you  want  to  put  in  them. 

Mr.  Saunders.  This  500,000  tons  shortage  that  you  spoke  of  a 
moment  ago — did  that  have  reference  to  the  fleet  at  its  present  size, 
or  does  it  contemplate  the  fleet  under  some  scheme  of  development. 

Admiral  Benson.  That  would  be  the  contemplated  development 
of  the  fleet  in  the  next  five  or  six  years. 

Mr.  Saunders.  According  to  what  plan  ? 

Admiral  Benson.  Of  course,  we  are  trying  now  to  establish  a 
building  policy,  as  you  know,  and  that  would  give  us  an  increase  of 
10  battleships,  4  battle  cruisers,  a  certain  number  of  destroyers, 
submarines,  and  other  craft  in  the  next  five  years. 

Mr.  Saunders.  It  was  in  connection  with  that? 

Admiral  Benson.  Yes;  in  connection  with  that.  That  would 
answer  the  purpose  for  the  development  up  to  that  time — I  think 
about  1921. 

Mr.  Greene.  I  would  like  to  ask  the  Admiral  if  he  is  familiar  with 
some  of  the  ship  subsidy  bills  that  have  been  offered  in  Congress 
previously,  which  had  provision  for  naval  auxiliary  ships  for  certain 
purposes,  and  matters  of  that  kind  ? 

Admiral  Benson.  I  am  not  familiar  with  them. 

Mr.  Greene.  I  would  suggest  that  there  have  been  bills  presented 
in  which  it  was  proposed  to  do  practically  what  's  proposed  in  the 
shipping  bill,  in  the  way  of  aUowing  the  Government  to  use  these 
vessels  when  necessary  in  case  of  war.     So  that  this  proposition  is 


256     SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

exactly  the  same  as  the  subsidy  bills  were  that  were  not  adopted; 
and  this  proposition  is  not  yet  adopted,  but  it  is  proposed  along  the 
same  line. 

The  Chairman.  This  is  a  different  method  of  accomplishing  the 
same  purpose,  I  take  it. 

Mr.  Greene.  Oh,  yes;  but  at  a  great  deal  less  expense  under  the 
proposition  of  subsidy  than  under  this  proposition,  which  is  a  double- 
dyed  subsidy. 

Mr.  Edmonds.  Do  you  know  anything  about  a  collier  being  built 
at  Shanghai  by  a  Chinese  shipbuilding  concern  for  the  United  States 
Government  ? 

Admiral  Benson.  No,  sir;  I  do  not. 

Mr.  Edmonds.  I  am  not  quite  sure,  but  I  understood  it  was  for 
the  War  Department.  I  suppose  you  would  not  know  the  contract 
price  of  that. 

Admiral  Benson.  I  did  not  know  such  a  thing  was  being  done. 

Mr.  Edmonds.  It  was  being  finished  while  I  was  in  Shanghai.  It 
might  be  for  use  in  the  Philippines;  I  do  not  know. 

Mr.  Loud.  Would  the  style  of  the  unloading  machines  now  in  use 
on  the  fleet  colliers  be  suitable  for  handling  grain  ? 

Admiral  Benson.  I  do  not  think  it  would,  sir. 

Mr.  Loud.  You  could  not  discharge  grain  with  that  machinery, 
could  you  ? 

Admiral  Benson.  No,  sir. 

Mr.  Edmonds.  But  you  could  discharge  the  ordinary  cargo  with  it, 
could  you  not  ? 

Admiral  Benson.  Oh,  yes;  for  instance,  we  now  use  the  clam-shell 
digger  very  largely  to  go  down  in  the  hold  and  pick  the  coal  up,  and 
then  as  it  conies  out  of  the  hold  there  is  a  beam  that  extends  over  the 
deck  of  the  ship,  and  this  clam-shell  digger  goes  right  down  and  digs 
out  about  a  ton  of  coal,  hoists  it  out  of  the  hold,  and  as  it  comes  out 
is  suspended  over  the  deck  of  the  ship  and  is  opened  up  just  as  the 
ordinary  mud  digger.  That  is  the  principle  we  use  now  in  the  ordi- 
nary fleet  coUier,  and  we  have  a  number  of  them  going  in  six  or  eight 
hatches. 

Mr.  Price.  That  could  not  be  used  for  grain? 

Mr.  Loud.  You  could  not  take  up  wheat  with  it,  for  instance. 

Admiral  Benson.  You  might  get  a  different  type  of  scoop  that 
would  probably  do  it.     I  have  never  given  that  any  thought. 

Mr.  Price.  But  it  would  not  be  a  very  large  matter  to  re-equip 
those  colhers? 

Admiral  Benson.  It  would  be  very  simple  to  rig  up  anything  you 
please.  With  the  appliances  there,  you  could  rig  up  anything  you 
wanted  to. 

Mr.  Greene.  I  would  hke  to  ask  one  other  question.  How  about 
these  colliers  that  are  now  used  m  Boston  in  the  coastwise  transpor- 
tation fleet  ?     Are  you  acquainted  with  their  use  ? 

Admiral  Benson.  Yes.     You  mean 

Mr.  Greene.  The  vessels  belonging  to  the  Coastwise  Transporta- 
tion Co.,  of  Boston? 

Admiral  Benson.  No,  sir;  I  am  not. 

Mr.  Greene.  Would  these  coal  steamers  that  carry  several  thou- 
sand tons  be  useful  for  your  purposes  ? 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      257 

Admiral  Benson.  Yes,  sir. 

Mr.  Greene.  That  is  what  those  coastwise  transportation  steamers 
do  carry.     There  have  been  a  large  number  of  those  recently  built. 

Admiral  Benson.  Yes,  sir. 

Mr.  Greene.  I  did  not  ask  this  in  criticism;  I  just  wanted  to  get 
the  information. 

Admiral  Benson.  No;  but  there  have  been  one  or  two  questions 
asked  where  I  could  not  give  the  information. 

(Thereupon,  at  12.10  o'clock  p.  m.,  the  committee  adjourned  until 
to-morrow,  Thursday,  February  17,  1916,  at  10  o'clock  a.  m.) 


CREATING  A  SHIPPING  BOARD,  A  NAVAL  AUXILIARY,  AND  A 
MERCHANT  MARINE. 


Committee  on  the  Merchant  Marine  and  Fisheries, 

House  or  R'epresentatives, 
Thursday^  February  i7, 1916. 
The  committee  met  at  10.30  o'clock  a.  m.,  Hon.  Joshua  W.  Alex- 
ander (chairman)  presiding. 

The  Chairman.  Gentlemen,  we  have  with  us  this  morning  Mr. 
McAdoo,  Secretary  of  the  Treasury,  whom  I  have  invited  to  appear 
and  be  heard  on  this  bill,  H.  R.  10500,  known  as  the  shipping  biU. 
You  may  proceed,  Mr.  Secretary. 

STATEMENT  OF  HON.  WILLIAM  G.  McADOO,  SECRETARY  OF  THE 
TREASURY  OF  THE  UNITED  STATES. 

Secretary  McAdoo.  Mr.  Chairman  and  gentlemen  of  the  commit- 
tee, with  your  permission  I  should  like  to  give  a  little  of  the  ante- 
cedent history  of  this  measure,  arising  out  of  the  events  immediately 
preceding  and  succeeding  the  outbreak  of  the  European  war. 

On  the  26th  of  March,  1914,  Senator  AVeeks  introduced  in  the  Sen- 
ate resolution  No.  317,  as  follows : 

Whereas  it  is  desirable  to  develop  and  extend  commercial  relations  between  the 
United  States  and  the  countries  of  South  America  by  the  establishment  of 
direct  lines  of  communication  for  carrying  the  United  States  mail  and  for  the 
transportation  of  passengers  and  freight ;  and 
Whereas  private  capital  has  not  engaged  in  this  service  to  a  sufficient  extent  to 
furnish  facilities  comparable  to  those  enjoyed  by  the  people  of  other  coun- 
tries having  trade  relations  with  South  America :  Therefore  be  it 
Resolved,  That  the  Secretary  of  the  Navy  be,  and  he  is  hereby,  directed  to 
cause  to  be  prepared,  in  detail,  a  plan  for  the  establishment  of  a  line  of  ships  to 
run  between  the  cities  of  New  York  and  New  Orleans  and  the  city  of  Valparaiso, 
Chile,  and  intermediate  ports,  to  consist  of  the  cruisers  Columbia  and  Minne- 
apolis and  the  scout  cruisers  Salem,  Chester,  and  Birmingham,  and  that  the 
information  requested  in  this  resolution  shall  include  the  following: 

First.  The  time  required  by  these  ships  to  make  a  round  trip  between  the 
ports  named. 

Second.  The  number  of  passengers  which  could  be  carried  in  each  ship  as 
now  equipped  or  with  any  changes  that  would  not  impair  their  usefulness  if 
required  in  the  naval  service. 

Tliird.  The  amount  of  freight  that  each  ship  could  carry  under  similar  condi- 
tions ;  this  estimate  to  include  mail  as  well  as  freight. 

Fourth.  The  number  of  naval  officers  and  seamen  required  to  man  the  ships 
■engaged  in  the  service  which  is  proposed. 

Fifth.  The  probable  cost  of  the  service,  including  the  pay  of  the  officers  and 
men  employed  in  connection  with  it  and  all  other  necessary  elements,  such  as 
wharfage  in  the  cities  where  the  ships  would  touch,  fuel,  repairs,  and  mainte- 
nance of  every  description. 

Sixth.  The  cost  of  such  necessary  changes  as  may  be  required  to  put  the  ships 
named  in  condition  for  such  service,  in  removing  unnecessary  military  equip- 
ment, and  any  other  changes  necessary  in  order  to  carry  passengers  and  freight 
safely  and  to  adequately  perform  the  service  proposed  in  this  resolution. 

259 


260      SHIPPING  BOARD^  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE. 

Seventh.  An  expression  of  opinion  by  tlie  department  as  to  wlietlier  tlie 
above-named  sliips  can  be  used  for  such  purposes  vi'ithout  impairing  their  use- 
fulness for  naval  purposes  should  their  prompt  return  to  the  naval  service  be 
required. 

At  this  time  all  the  nations  of  the  world  were  at  peace,  and  private 
capital  had  had  opportunity  for  many  years  to  develop  lines  of 
steamships  between  the  United  States  and  South  America,  but,  as 
Senator  Weeks  so  clearly  expressed  in  the  preamble  of  his  resolution, 
'"■  it  is  desirable  to  develop  and  extend  commercial  relations  between 
the  Unit<?d  States  and  the  countries  of  South  America  by  the  estab- 
lishment of  direct  lines  of  communication  for  carrying  the  United 
vStates  mail  and  for  the  transportation  of  passengers  and  freight," 
and  as  "  private  capital  has  not  engaged  in  this  service  to  a  sufficient 
extent  to  furnish  facilities  comparable  to  those  enjoyed  by  the  people 
of  other  countries  having  trade  relations  with  South  America," 
therefore  it  was  resolved  bj'^  the  Senate  that  "  the  Secretary  of  the 
NaA^y  be,  and  he  is  hereby,  directed  to  qause  to  be  prepared  in  detail 
a  plan  for  the  establishment  of  a  line  of  ships  to  run  between  the 
cities  of  New  York  and  New  Orleans  and  the  city  of  Valparaiso, 
Chile,  and  intermediate  ports,  to  consist  of  the  cruisers  Columbia 
and  Minneapolis  and  the  scout  cruisers  Salem^  Chester^  and  Bir- 
minghanri^^''  etc. 

That  resolution  was  referred  to  the  Senate  Committee  on  Naval 
Affairs,  and  on  the  11th  of  April  following  the  Secretary  of  the 
Navy  addressed  a  letter  to  Senator  Tillman,  chairman  of  the  com- 
mittee, reciting  the  available  naval  vessels  for  this  service  and  point- 
ing out  that  the  accommodations  provided  by  them  would  be  \Qvy 
restricted.  He  stated  that  the  vessels  in  question  could  carry  about 
15  to  20  passengers  and  about  150  tons  of  express  freight  each; 
that  is,  the  cruisers  to  which  Senator  Weeks  referred  in  his  resolu- 
tion; and  he  also  declared  that  the  service  would  be  a  very  expensive 
one.  In  addition  to  that  the  Secretary  gave  a  list  of  other  naval 
vessels  that  might  be  available  for  service,  certain  naval  auxiliaries, 
which  are  enumerated  in  this  report. 

Accompanying  his  report  was  a  bill  which,  if  adopted  by  the  Con- 
gress, would  carry  out  the  object  of  the  resolution.  In  this  bill  it 
is  provided  that  the  vessels  so  employed  shall  carry  United  States 
mail,  passengers,  and  freight,  under  such  regulations  and  at  such 
rates  as  the  Secretary  of  the  Navy  shall  prescribe.  The  vessels  were 
to  be  operated,  of  course,  by  the  Navy  Department  as  war  vessels 
of  the  United  States,  impressed,  however,  with  the  character  of 
merchantmen  to  the  extent  to  which  they  were  employed  in  the 
merchant  marine  service. 

On  the  3d  of  August,  1914,  which  was  three  days  after  the  out- 
break of  the  European  war,  the  Senate  Committee  on  Naval  Affairs 
unanimously  reported  the  bill  of  Senator  Weeks,  Senate  No.  5259, 
and  that  report  is  signed  by  Senators  Tillman,  Page,  Swanson,  Per- 
kins, Bryan,  Clapp,  Thornton,  Poindexter.  and  Johnson.  W^ith  the 
permission  of  the  committee  I  should  like  to  attach  that  as  an  exhibit 
to  my  statement.  (Exhibit  No.  1.  All  of  the  Secretary's  exhibits 
will  be  found  at  the  close  of  his  statement.) 

The  Chairman.  If  there  is  no  objection,  that  may  be  done. 

Secretary  McAdoo.  It  will  avoid  the  necessity  of  having  to  quote 
rather  liberally  from  it.    The  bill  was  introduced.     It  was  debated 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      261 

in  the  Senate  and  was  passed,  I  think  I  may  say,  unanimously.  There 
was  no  division,  at  least;  everybody  voted  for  it.  In  the  debate  in 
the  Senate  the  bill  was  amended  upon  the  suggestion  of  Senator 
Williams  so  as  to  extend  the  scope  of  the  service  originally  contem- 
plated by  Senator  Weeks.  The  bill  as  introduced  in  the  Senate 
provided  that  the  Secretary  of  the  Navy — 

is  hereby  authorized  to  establish  one  or  more  United  States  Navy  mail  lines,  by 
employing  such  vessels  of  the  Navy  as  in  his  discretion  ai"e  available,  without 
impairment  of  the  paramount  duties  of  the  Navy,  and  as  are  necessai-y  and  ap- 
propriate, for  the  purpose  of  establishing  and  maintaining  regular  communica- 
tion between  the  east  and  west  coast,  or  both  coasts,  of  the  United  States,  and 
either  or  both  coasts  of  South  America. 

Upon  the  motion  of  Senator  Williams,  of  Mississippi  (I  think  I 
am  correct  in  this  statem,ent;  the  record  will  show,  however),  the 
following  was  added : 

And  between  the  United  States  and  the  countries  of  Europe. 

So  that  the  scope  of  this  bill  was  very  much  broadened  as  it  passed 
the  Senate.  The  bill  provides  that  the  vessels  so  emplo3^ed  shall 
carry  the  United  States  mail,  passengers,  and  freight  under  such  reg- 
ulations and  at  such  rate  or  rates  as  the  Secretary  of  the  Navy  may 
prescribe. 

The  Chairman.  What  is  the  number  of  that  bill  ? 

Secretary  McAdoo.  Senate  No.  5259. 

The  Chairman.  Known  as  the  Weeks  bill? 

Secretary  McAdoo.  Known  as  the  Weeks  bill.  I  should  also  like 
to  attach  it  as  a  part  of  my  statement.     (Exhibit  No.  2.) 

As  I  said  before,  this  bill  was  passed  three  daj'^s  after  the  outbreak 
of  the  European  war,  and  it  contemplated,  as  you  will  observe,  put- 
ting the  Navy  of  the  United  States  into  foreign  commerce.  Under 
its  provisions  the  ships  of  our  Navy,  operated  by  naval  officers,  would 
carry  freight  and  passengers. 

The  Chairman.  And  mail? 

Secretary  McAdoo.  And  mail.  The  rates  were  to  be  fixed  by  the 
Secretary  of  the  Navy.  The  operation  was  to  be  by  the  Seci-etary 
of  the  Navy.  It  was  to  be  distinctly  a  Government  operation  of 
Navy  craft  as  merchant  vessels,  and  the  bill  was  passed,  as  I  say,  with 
unanimity  by  the  Senate  of  the  United  States. 

I  should  say,  in  this  connection,  that  this  question  of  Government 
operation,  w^hich  has  been  so  much  debated  since  this  bill  was  passed 
and  since  other  measures  were  introduced,  was  brought  forward  in 
a  very  striking  form  through  the  passage  of  this  measure;  and  while 
the  service  to  be  supplied  was  wholly  inadequate  and  could  not  go 
very  far,  as  everyone  realized,  it  presented  this  rather  extraordinary 
situation 

The  Chairman.  Right  at  that  point,  Mr.  Secretary,  I  will  say  the 
Senate  bill  was  referred  to  the  Committee  on  Naval  Affairs  of  the 
House  and  a  subcommittee  of  the  Committee  on  Naval  Affairs  inves- 
tigated the  question  very  thoroughly  and  came  to  the  conclusion  that 
the  cost  of  operating  these  ships  would  be  so  great  that  they  would 
be  of  no  commercial  value  for  the  uses  to  which  they  were  to  be  put. 

Secretary  McAdoo.  The  Secretary  of  the  Navy  practically  says 
that  in  his  report  on  Senator  Weeks's  original  resolution.  I  was  going 
to  say  that  whenever  you  impress  a  war  vessel  with  a  merchant  char- 
acter she  is  then  subject  to  the  right  of  visitation  and  search,  and  if 


262      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

this  bill  had  been  passed  by  the  House  and  we  had  put  our  war  vessels 
into  service  as  merchantmen  they  would  have  been  subject  to  visita- 
tion and  search  by  the  war  vessels  of  any  of  the  belligerent  nations. 
And  I  think  it  is  perfectly  clear  that  the  dangers  of  conflict  arising 
out  of  the  search  of  the  war  vessels  of  the  United  States  by  any  vessel 
of  a  belligerent  power  would  have  been  very  great.  I  think  every  one 
will  admit  now,  in  the  light  of  past  events,  that  the  passage  of  such 
a  bill  would  not  only  have  been  a  grave  mistake,  but  would  have 
subjected  us  to  risks  and  dangers  of  conflicts  and  controversies  which 
would  not  arise  out  of  the  Government  being  a  mere  stockholder  in 
a  corporation  engaged  in  the  operation  of  merchant  vessels  dis- 
tinctively. 

Mr.  Greene.  I  would  like  to  ask  you  a  question  just  there.  When 
Senator  Weeks  offered  this  bill  there  was  apparently  no  sign  of  war  ? 

Secretary  McAdoo.  No. 

Mr.  Greene.  Neither  here  nor  abroad,  nor  in  anybody's  informa- 
tion at  that  time,  either  in  this  country  or  on  the  other  side  ? 

Secretary  McAdoo.  I  think  that  is  a  correct  statement,  Mr.  Greene, 
so  far  as  this  country  is  concerned.    I  can  not  say  as  to  Europe. 

Mr.  Greene.  So  that  it  was  simply  introduced  with  the  idea  of 
getting  a  mail  service  where  we  did  not  have  it  and  not  with  any 
intention  of  involving  any  branch  of  the  Government  in  a  perma- 
nent work.  It  was  drawn  up  as  a  sort  of  measure  in  an  attempt  to 
have  a  better  mail  service  with  South  America. 

Secretary  McAdoo.  The  bill,  however,  was  adopted  in  the  Senate 
after  the  outbreak  of  the  European  war. 

Mr.  Greene.  Oh,  yes. 

Secretary  McAdoo.  And  was  passed  in  contemplation  of  the  con- 
ditions as  they  then  existed. 

Mr,  Greene.  Yes;  undoubtedly. 

Secretary  McAdoo.  And  also  included  that  amendment  which  de- 
liberately and  intentionally  put  these  Navy  vessels  into  service  for 
the  carriage  of  freight  and  passengers  and  mail  to  Europe. 

Mr.  Greene.  Oh,  yes. 

Secretary  McAdoo.  Which  were  war  vessels  to  be  operated  by  the 
Secretary  of  the  Navy,  who  had  the  power  to  fix  the  rates  for  freight 
and  passengers  and  mail. 

Mr.  Greene.  As  you  say,  it  was  very  unwise  legislation;  I  agree 
with  you  fully. 

Secretary  McAdoo.  I  only  wanted  to  bring  out  a  little  more  fully 
the  history  of  this  whole  attempt  to  provide  improved  means  of  com- 
munication for  the  protection  of  American  commerce  and  American 
citizens. 

Mr.  Greene.  Since  I  have  been  here  I  have  seen  a  great  many 
attempts  which  have  proved  abortive. 

Mr.  Edmonds,  In  this  bill  which  we  have  before  us  at  the  present 
time,  it  provides  that  the  Government  shall  purchase,  construct,  or 
charter  ships,  and  then  recharter  those  ships  through  the  operation  of 
a  board ;  not  operated  by  a  Government-owned  steamship  line,  but  as 
a  separate  proposition,  this  board  which  is  proposed  to  be  established 
goes  into  the  ship-brokerage  business.  It  is  to  purchase,  construct, 
and  charter  ships  and  to  sell  those  ships  or  to  recharter  them.  Now, 
what  would  be  the  position  of  one  of  those  rechartered  ships? 

Secretary  McAdoo.  In  what  respect? 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      263 

Mr.  Edmonds.  It  would  be  owned  entirely  by  the  Government,  of 
course,  and  it  would  be  rechartered  by  this  board  to  another  party. 

The  Chairman.  I  would  suggest  that  the  Secretary  be  permitted  to 
conclude  his  statement,  and  then  we  can  go  into  these  matters. 

Mr.  Edmonds.  All  right;  I  will  bring  that  up  later,  then. 

Secretary  McAdoo.  I  will  be  very  happy  to  answer  that.  I  think 
it  will  be  a  little  more  satisfactory,  however,  if  I  do  carry  out  the 
statement  that  I  wanted  to  make  simply  as  a  foundation  for  dis- 
cussion. 

The  outbreak  of  the  European  war  precipitated  many  very  grave 
problems.  It  is  not  necessary  for  me  to  elaborate  on  them.  The 
immediate  effect  was  a  complete  demoralization  of  foreign  exchange 
and  an  immediate,  acute,  impending,  tremendous  financial  and  busi- 
ness catastrophe  and  panic  in  this  country  which  was  averted  by  very 
prompt  and  active  measures.  I  shall  not  undertake  to  describe  them 
here.  But,  growing  out  of  the  acute  situation  then  developed,  the 
Secretary  of  the  Treasury,  on  the  7th  of  August,  1914,  issued  a  state- 
ment— I  hope  you  will  pardon  me  for  introducing  this,  but  it  has  such 
direct  bearing  upon  the  situation  that  I  feel  obliged  to  do  so — which 
is  incorporated  in  his  annual  report  for  1914,  as  follows : 

It  is  of  vital  importance  to  the  country  that  two  things  be  clone  as  quickly  as 
possible : 

First.  Provide  sufficient  ships  to  move  our  grain  and  cotton  crops  to  European 
markets ;  and 

SecoiKl.  Restore  through  the  bankers  the  market  for  foreign  bdls  of  exchange. 

For  the  purpose  of  concerting  measures  to  tliis  end,  I  have  to-day  called  a 
conference  of  representatives  of  leading  shipping  interests  and  foreign-exchange 
bankers  to  meet  at  the  Treasury  Department  in  Washington  on  August  14,  at 
11  o'clock  a.  m. 

Grain  is  a  very  pressing  problem  at  the  moment,  because  the  crops  have  been 
largely  harvested,  and  the  movement  is  alrpady  well  under  way.  The  cotton 
movement  is  not  so  advanced  and  will  not  be  for  a  few  weeks.  It  is  my  purpose 
to  invite  a  conference  on  the  subject  of  cotton  to  be  held  at  an  early  date,  of 
which  announcement  will  be  made  later.  These  are  important  questions  for 
the  American  people,  and  every  possible  effort  will  be  made  by  the  administra- 
tion to  cooperate  in  the  movement  of  these  great  crops. 

Tlie  names  of  those  who  will  attend  the  conference  on  the  14th  instant  will 
be  announced  in  a  few  days. 

At  that  time  this  country  had  a  very  huge  debit  balance  against 
it  in  Europe,  which  was  estimated,  subsequently,  by  the  Federal 
Reserve  Board,  to  be  something  like  $500,000,000,  due  on  or  before 
the  1st  day  of  January,  1915.  It  Avas  absolutely  essential  to  the 
protection  of  our  business  and  financial  situation  that  the  free  move- 
ment of  our  commodities,  especially  cotton  and  grain  to  Europe, 
should  be  continued,  in  order  that  we  might  create  credits  which 
would  enable  us  to  counterbalance  that  huge  foreign  debit.  And 
because  shipping  had  been  practically  suspended  from  our  various 
ports  there  was  an  immense  congestion  of  foreign-bound  freight  at 
Galveston,  a  big  cotton  and  grain  shipping  port,  as  well  as  at  New 
Orleans;  embargoes  were  declared  by  the  railroads  on  freight  bound 
for  these  ports;  and  an  embargo  on  Baltimore  was  impending  be- 
cause there  were  no  ships  to  move  commodities.  It  was  necessary 
that  a  very  active  and  strenuous  effort  be  made  to  restore  shipping 
facilities  on  the  ocean,  and  also  to  revive  the  foreign  exchange 
market  as  quickly  as  possible  to  as  near  normal  conditions  as  could 
be  done  in  the  circumstances.  A  conference  was  therefore  called 
by  the  Secretary  of  the  Treasury  to  meet  on  the  14th  day  of  August, 


264      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

1914,  at  the  Treasury  Department,  just  two  weeks  after  the  outbreak 
of  the  European  War,  for  the  express  purpose  of  considering  the 
problems  I  have  just  outlined.  At  that  conference  there  were  present 
many  of  the  leading  men  of  the  country,  representing  financial, 
business,  and  shipping  interests.  I  will  mention  a  few  of  them. 
The  New  York  Clearing  House  Association  was  represented  by 
Mr.  J.  S.  Alexander,  president  of  the  National  Bank  of  Commerce, 
and  William  Woodward,  president  of  the  Hanover  National  Bank, 
two  of  the  largest  banks  in  New  York. 

The  Chicago  Clearing  House  Association  was  represented  by  Mr. 
John  J.  Arnold,  Mr.  H.  G.  P.  Deans,  and  Mr.  Joseph  McCurrach. 

The  St.  Louis  Clearing  House  Association  was  represented  by  Mr. 
David  R.  Francis,  Breckinridge  Jones,  and  Festus  J.  Wade. 

The  Kansas  City  Clearing  House  Association  was  represented  by 
Mr.  F.  G.  Crowell. 

I  will  not  mention  all  of  these  names,  but  will  just  pick  out  a  few 
of  them : 

The  National  Foreign  Trade  Council's  representatives  were  Robert 
Dollar,  of  San  Francisco;  James  A.  Farrell.  of  New  York:  P.  A.  S. 
Franklin,  of  New  York ;  James  J.  Hill,  of  St.  Paul ;  Edwin  N.  Hur- 
ley, of  Chicago;  Barton  Magers,  of  Norfolk;  AVelding  Ring  and 
John  D.  Ryan,  of  New  York ;  W.  D.  Simmons,  of  Philadelphia ;  and 
E.  P.  Thomas,  of  New  York. 

The  Chamber  of  Commerce  of  the  United  States  had  present 
Frederick  Bode,  of  Chicago;  James  G.  Cutler,  of  Rochester;  John 
Joy  Edson,  of  Washington,  D.  C. ;  John  II.  Fahey,  of  Boston;  H. 
L.  Ferguson,  of  NeAvport  News;  A.  H.  Mulliken,  of  Chicago;  and 
R.  G.  Rhett,  of  Charleston,  S.  C. 

The  New  York  Chamber  of  Commerce  had  present  Hendon  Chubb, 
H.  R.  Eldridge,  J.  Parker  Kirlin,  Seth  Low,  E.  H.  Outerbridge,  and 
W.  B.  Pollock. 

The  New  York  Produce  Exchange  representative  was  Charles  A. 
Robinson. 

The  Chicago  Board  of  Trade  was  represented  by  Julius  Barnes, 
John  Bassett  Moore,  and  H.  E.  Rycroft. 

The  West  and  Northwest  milling  interests  were  represented  by 
James  G.  Andrews,  of  Minneapolis;  W.  L.  Harvey,  of  New  Prague, 
Minn. ;  L.  E.  Moses,  of  Kansas  City.  Mo. ;  and  F.  R.  Eaton,  of  the 
Washburn-Crosby  Co.,  of  Minneapolis. 

The  Baltimore  banking,  grain,  and  shipping  interests  were  repre- 
sented bv  Bernard  N.  Baker,  William  Ingle,  Blanchard  Randall,  and 
J.  C.  Whitney. 

The  New  York  foreign  exchange,  banking,  and  steamship  inter- 
ests were  represented  by  William  L.  Benedict,  of  Kidder,  Peabody, 
&  Co. ;  James  Brown,  of  Brown  Bros.  &  Co. ;  F.  Q.  Brown,  of  Red- 
mond &  Co., ;  H.  R.  Ickelheimer,  of  Heidelbach,  Ickelheimer  &  Co. ; 
J.  P.  Morgan,  of  J.  P.  Morgan  &  Co.;  Jan>es  Speyer,  of  Speyer  & 
Co.;  Benjamin  Strong,  jr.,  of  the  Bankers'  Trust  Co.;  August  Ulrich, 
of  Ladenburg,  Thalmann  &  Co.;  A.  J.  Hemphill;  Pliny  Fisk;  John 
A.  Donald;  and  Wilbur  C.  Fisk. 

The  Boston  banking  interests  were  represented  by  Josiah  Quincy. 

The  Southern  Cotton  Congress  was  represented  by  C.  W.  Priddy, 
of  Norfolk,  and  J.  C.  Mayfield,  of  Barnwell,  S.  C. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      265 

A  very  interesting  discussion  ensued  and  one  of  the  concrete  things 
as  the  outcome  of  that  conference  was  the  passage  of  the  war-risk 
insurance  bill,  which  established  in  the  Treasury  Department  a 
Bureau  of  War  Risk  Insurance,  for  the  purpose  of  facilitating  the 
foreign  trade  of  the  United  States  and  giving  war-risk  insurance  to 
the  commerce  and  ships  of  this  country.  As  you  will  recall,  an  ap- 
propriation of  $5,000,000  was  made  for  the  purpose  of  enabling  the 
Government  to  insure  war  risks,  or  to  go  into  the  war-risk  insurance 
business. 

Mr.  Greene.  Are  you  still  operating? 

Secretary  McAdoo.  Yes;  we  are  still  operating. 

Mr.  Greene.  To  what  extent? 

Secretary  McAdoo.  The  bureau  has  insured — I  am  sorry  I  have 
not  the  statement  here  before  me,  but  with  your  permission  I  will 
put  in  the  record  a  statement  of  the  war-risk  insurance  of  the  bureau 
of  most  recent  date.     (Exhibit  No.  3.)  ♦ 

Mr.  Greene.  I  have  no  objection  to  that. 

Mr.  Goodwin.  By  reason  of  the  operation  of  this  bureau  war-risk 
insurance  has  increased  just  a  little  over  normal  rates,  as  I  understand 
it,  Mr.  Secretary? 

Secretary  McAdoo.  Of  course  I  would  not  know  how  to  answer 
that  question,  because  in  normal  times  there  is  not  any  war-risk  in- 
surance. 

Mr.  Goodwin.  I  did  not  mean  war-risk  insurance,  but  I  mean  in- 
surance on  goods  in  transit. 

Secretary  McAdoo.  Do  you  mean  marine  insurance? 

Mr.  Goodwin.  Marine  insurance;  yes. 

Secretary  McAdoo.  We  are  not  permitted  to  engage  in  marine  in- 
sui-tince.     The  bureau  is  restricted  absolutely  to  war-risk  insurance. 

Mr.  Goodwin.  I  meant  to  say  that  the  war-risk  insurance  has  in- 
creased but  little  over  marine  insurance  in  normal  times. 

Secretary  McAdoo.  The  rate  varies  so  much  according  to  the  risk 
taken  that  it  would  be  hard  to  make  a  comparison.  I  may  say  this, 
however,  that  the  effect  of  the  War-Risk  Insurance  Bureau  operated 
by  the  Government  has  been  to  exercise  a  very  potential  influence 
upon  war-risk  insurance  rates  throughout  the  world.  I  think  it  has 
undoubtedly  brought  down  the  level  of  war-risk  insurance  all  around. 

Mr.  Goodwin.  My  purpose  in  asking  that  question  was  to  get  this 
statement,  if  it  is  a  fact,  that  the  war  rates  for  insurance  have  not  in- 
creased over  marine  insurance  rates  in  normal  times  in  comparison 
with  the  increased  ocean  freight  rates  now  in  existence  and  the  ocean 
freight  rates  in  normal  times. 

Secretary  McAdoo.  That  is  a  correct  statement.  The  rates  of  in- 
surance made  by  the  Government  have  been,  I  think,  very  reasonable 
and  very  moderate,  considering  the  risk  assumed. 

Here  is  the  last  report  of  the  War-Risk  Insurance  Bureau,  sub- 
mitted to  Congress  on  the  7th  of  December,  1915,  and  I  can  give  you 
a  very  brief  summary  of  its  operations,  which  will  tell  the  whole 
story ."^    (Exhibit  No.  3.) 

The  total  amount  of  risks  insured  up  to  date  in  this  report  are 
$93,190,000.    I  will  only  give  round  figures. 

The  total  expenses  of  the  bureau  up  to  that  date  were  $22,000. 

The  total  premiums  received  were  $2,194,454,  and  the  net  losses 
paid  up  to  that  date  were  $695,984. 


266      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Leaving  a  surplus  of  premiums  on  hand  at  that  date  of  $1,498,000 
in  round  numbers. 

So  that  the  bureau  has  not  only  rendered,  I  think,  very  effective 
service  to  American  commerce,  but  it  also  has  been  operated  without 
any  loss  and,  as  a  matter  of  fact,  at  a  net  profit  up  to  date. 

It  was  generally  recognized  at  this  conference  of  August  14,  1914, 
that  some  measures  would  have  to  be  taken  to  increase  the  supply  of 
merchant  vessels  for  the  United  States;  that  something  would  have 
to  be  done  to  improve  the  situation  to  meet  the  emergency  which 
confronted  the  country  as  the  result  of  the  outbreak  of  the  European 
war.  In  fact,  Mr.  Hill  proposed  at  that  time  that  the  Minneapolis 
be  brought  into  the  Atlantic,  as  the  crisis  in  the  Atlantic  was  far 
more  acute  than  on  the  Pacific  and  the  needs  were  so  much  greater 
in  the  Atlantic.  The  Minneapolis  is  one  of  the  big  ships  owned  by 
the  Chicago  &  Northwestern  Railroad  Company.  Mr.  Hill  thought 
very  seriously  of  bringing  it  into  the  Atlantic,  but  for  some  reason 
or  other  that  was  not  done  at  that  time.  No  definite  shipping  plans 
were  formulated  by  that  conference;  in  fact,  none  could  be  formu- 
lated at  the  moment.  We  were  all  alive  to  the  problem,  and  every 
man  was  thinking  and  trying  to  devise  something  that  would  enable 
the  country  to  meet  the  situation  which  Avas  already  acute,  and  which, 
I  think,  no  man  who  looked  forward  at  all  could  fail  to  realize  might 
become  infinitely  more  acute  and  exceedingly  distressing  to  American 
commerce  if  prompt  measures  were  not  taken  to  protect  the  interests 
of  this  country. 

And  I  may  say  that  at  this  time  Mr.  Franklin,  who  is  vice  presi- 
dent or  general  manager  of  the  International  Mercantile  Marine  Co. 
and  who  was  in  the  conference,  spoke  to  me  about  the  German  ships 
which  were  interned  in  New  York.  The  only  time  I  ever  heard  the 
sale  of  the  German  ships  suggested  or  proposed  was  in  this  con- 
versation with  Mr.  Franklin,  when  he  said  to  me  that  it  would  be  a 
very  great  help  to  American  commerce  if  those  ships  could  be  bought 
and  put  into  service.  He  said  that  his  company  would  like  to  pur- 
chase those  ships,  but  that  it  would  be  difficult,  if  not  impossible,  to 
secure  private  capital  for  that  purpose,  and  he  wanted  to  loiow  how 
I  would  regard  a  proposition  to  have  the  Government  of  the  United 
States  indorse  or  guarantee  the  bonds  of  his  company  so  that  they 
might  make  that  purchase.  I  said  very  frankly  to  Mr.  Franklin 
that  I  should  not  myself  approve  of  the  use  of  the  credit  of  the 
United  States  for  the  guarantee  or  indorsement  of  the  bonds  of  any 
private  corporation;  that  I  thought  it  would  be  a  mistaken  policy; 
and  that  I  could  not,  therefore,  approve  the  plan  he  outlined.  He 
subsequently  talked,  I  think,  to  some  Members  of  the  House  and 
Senate  about  that  proposition,  but  I  think  met  with  no  encourage- 
ment. I  mention  this  incident  about  the  German  ships,  because  in 
the  debate  which  subsequently  developed  a  great  deal  of  discussion 
was  had  on  that  particular  subject,  and  it  seemed  to  be  inferred  if  it 
was  not  actually  charged  that  it  was  the  purpose  of  the  Government, 
if  the  ship  bill  subsequently  introduced  by  your  chairman  had  passed, 
to  buy  the  German  ships. 

Mr.  Brtjcknee.  Who  did  he  represent? 

Secretary  McAdoo.  Mr.  Franklin  was  the  vice  president  of  the 
International  Mercantile  Marine  Co..  of  New  York,  and  I,  of  course, 
understood  that  he  was  speaking  for  his  company.     I  did  not  go  into 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      267 

the  details.  He  simply  made  the  suggestion  as  a  means  of  getting 
these  ships  back  into  service;  and,  as  I  said  before,  I  felt  it  would 
be  an  unwise  thing  for  the  Government  to  enter  upon  the  policy  of 
indorsing  the  bonds  of  any  private  corporation. 

Subsequently  a  bill  was  introduced 

The  Chairman.  Right  in  that  connection,  if  you  will  pardon  me, 
the  bill  known  as  the  ship  registry  act  of  August  18,  1914,  was  also 
favored  by  those  same  gentlemen  who  were  in  that  conference,  remov- 
ing the  five-year  limit  on  foreign-built  ships  and  admitting  them  to 
American  registry  in  the  foreign  trade. 

Secretary  McAdoo.  Yes;  I  am  glad  you  called  my  attention  to 
that,  Mr.  Chairman,  because  I  was  about  to  overlook  it.  Another 
measure  growing  out  of  that  ship  conference  was  this  ship-registry 
bill.  That,  as  you  know,  was  passed  very  promptly.  Under  that  bill 
vessels  of  foreign  registry  were  admitted  to  American  registry  free 
of  restrictions  which  had  previously  been  imposed  by  the  Panama 
Canal  act.  My  recollection  is  that  the  Panama  Canal  act  provided 
that  ships  not  over  5  years  old  could  be  admitted.  This  act  re- 
moved those  limitations. 

Mr.  Bruckner.  Do  you  Icnow  how  many  vessels  took  advantage 
of  that  act? 

Secretary  McAdoo.  The  Secretary  of  Commerce,  I  think,  has  put 
that  in  the  record  already  or  Mr.  Chamberlain's  testimony  covers 
that  point.  I  am  not  so  lamiliar  with  it,  because  it  does  not  come 
under  my  department. 

.  I  would  like,  at  this  juncture,  to  put  into  the  record  as  an  exhibit 
to  my  statement,  if  there  is  no  objection,  the  debate  on  Mr.  Weeks's 
bill,  which  will  be  found  on  pages  5863,  5864,  and  5865  of  the  Con- 
gressional Record  of  March  26  1914.  (Exhibit  No.  4.)  That  is  the 
debate  on  the  resolution  that  Senator  Weeks  offered.  I  would  also 
like  to  insert  the  debate  in  the  Senate  of  August  3,  1914,  on  pages 
14311  to  14318,  inclusive.     (Exhibit  No.  5.) 

You  will  find,  upon  examining  those  debates,  some  very  interesting 
and  illuminating  facts  in  connection  with  the  situation. 

You  will  find  no  fear  expressed  by  Mr.  Weeks,  Mr.  Gallinger,  Mr. 
Swanson,  Mr.  Jones,  Mr.  Newlands,  Mr.  Williams,  and  the  other 
Senators  who  took  part  in  these  debates,  that  the  United  States  would 
become  involved  in  war  with  any  of  the  European  powers  if  the 
Government  operated  directly  through  the  Secretary  of  the  Navy, 
these  naval  vessels  in  the  merchant  trade.  There  was  infinitely  more 
danger  of  international  complications  if  the  Government  operated 
its  naval  vessels  in  commerce  between  the  United  States  and  the  ports 
of  belligerent  countries  in  Europe,  than  if  the  Government  became  a 
stockholder  merely  in  a  private  corporation  which  operated  dis- 
tinctively merchant  vessels  having  no  sort  of  naval  character,  between 
the  United  States  and  ports  of  belligerent  nations  in  Europe,  as  well 
as  elsewhere. 

Because  of  the  very  inadequacy  of  the  relief  proposed  by  Senator 
Weeks,  through  the  operation  of  a  few  naval  vessels  in  commerce,  on 
account  of  their  limited  capacity  for  passengers  and  freight 
(although  Senator  Weeks'  purpose  was  in  the  highest  degree  com- 
mendable), and  because  of  the  crisis  confronting  the  country,  it  was 
perfectly  clear  that  the  essential  thing  to  do  was  to  buy  quickly  a 
large  number  of  merchant  vessels  which  were  suitable  for  carrying 


268      SHIPPING  BOARD^  NAVAI.  AUXILIARY,  AND  MERCHANT  MARINE. 

passengers,  mail,  and  such  large  cargoes  of  general  freight  that  their 
operation  would  prove  profitable,  and  at  the  same  time  afford  the 
commerce  of  the  United  States  the  protection  and  transportation  so 
vital  to  the  prosperity  of  the  country.  It  was  for  these  reasons, 
therefore,  that  on  the  4th  of  September,  1914,  Mr.  Alexander,  the 
chairman  of  this  committee,  introduced  in  the  House  bill  No.  18666, 
authorizing  the  United  States,  acting  through  a  shipping  board,  to 
subscribe  to  the  capital  stock  of  a  corporation  to  be  organized  under 
the  laws  of  the  United  States  or  of  a  State  thereof,  or  of  the  Dis- 
trict of  Columbia,  to  purchase,  construct,  equip,  maintain,  and  oper- 
ate merchant  vessels  in  the  foreign  trade  of  the  United  States,  and 
for  other  purposes.  That  bill  was  the  outgrowth  of  the  study  which 
had  resulted  from  the  conference  in  the  Treasury  Department  on 
August  14,  1914.  It  was  not  the  result  of  suggestions  made  in  that 
conference,  but  it  was  the  result  of  the  mature  consideration  and 
discussion  from  the  standpoint  of  the  administration  as  to  what 
ought  immediately  to  be  done  for  the  purpose  of  meeting  the  emer- 
gency that  then  existed. 

At  that  time,  as  you  all  know,  there  were  German  cruisers  on  the 
high  seas,  as  well  as  British  cruisers  and  French  cruisers,  and  the 
merchant-marine  service  of  the  world  was  very  much  disorganized 
and  in  a  state  of  panic.  A  great  many  merchant  ships  and  vessels 
were  offered  for  sale.  I  did  not  undertake  to  investigate  that  field 
particularly,  but  many  vessels  of  English  registry,  French  registry, 
and  of  neutral  registry  were  offered  from  time  to  time  to  the  depart- 
ment. More  of  them  were,  perhaps,  offered  to  the  Department  of 
Commerce  than  to  the  Treasury  Department,  because  the  Treasury 
Department  has  no  longer  jurisdiction  of  the  Bureau  of  Navigation, 
which  has  been  transferred  to  the  Department  of  Commerce.  How- 
ever, it  would  have  been  possible  at  that  time,  I  think,  to  have  bought 
at  extremely  low  prices — from  $40  to  $60  per  gross  ton — many  hun- 
dred thousand  tons  of  excellent  merchant  vessels.  And  the  purpose 
of  this  bill  was  to  enable  the  Government  of  the  United  States  to 
acquire  a  large  fleet  of  merchant  vessels  for  the  purpose  of  protect- 
ing the  commerce  of  the  United  States  against  emergencies  and 
against  the  conditions  which  have  subsequently  arisen,  and  which 
have  now  become  so  acute  that  there  has  been,  in  fact,  an  embargo 
by  the  great  railroads  entering  New  York  since  the  14th  of  De- 
cember last  upon  rail  shipments  into  that  port.  That  embargo  has 
been  made  necessary  in  large  part  by  the  lack  of  ships  to  get  the 
foreign  commerce  of  the  United  States  out  of  the  harbor  of  New 
York. 

Some  time  ago  I  wrote  to  the  presidents  of  the  various  trunk-line 
railroads  terminating  at  the  port  of  New  York  City,  asking  them  to 
tell  me  about  the  embargo  on  shipments  into  that  port  for  the  export 
trade  and  the  reasons  for  the  embargoes  and  the  congestion  of 
freight  in  their  terminals  and  along  their  lines.  I  received  replies 
from  the  presidents  of  the  following  companies:  Baltimore  &  Ohio 
Railroad  Co. ;  Lehigh  Valley  Railroad  Co. ;  Delaware,  Lackawanna  & 
Western  Railroad  Co.;  Ncav  York  Central  lines;  New  York,  New 
Haven  &  Hartford  Railroad  Co.;  Central  Railroad  of  New  Jersey; 
Pennsylvania  Railroad  Co. ;  and  Erie  Railroad  Co.  As  these  replies 
are  quite  lengthy,  I  have  had  digests  made  of  them,  and  attach  them 


SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      269 

as  Exhibit  No.  6.  The  original  letters  are  in  my  possession  and  are 
at  the  service  of  the  committee  at  any  time  that  it  may  desire  them. 

In  this  connection  attention  is  also  called  to  Exhibit  No.  7,  consist- 
ing of  extracts  from  newspapers  regarding  freight  congestion,  due 
primarily  to  the  lack  of  ships  to  handle  our  export  trade. 

Mr.  Goodwin.  You  mean  to  say  that  no  tonnage  goes  out  of  the 
port  of  New  York? 

Secretary  McAdoo.  There  has  been  an  embargo  on  rail  shipmentb 
into  the  port  of  New  York  since,  I  think,  the  14th  of  last  December. 

The  Chairman.  I  put  that  information  in  the  record  on  yesterday. 

Mr.  Greene,  Shipments  for  the  foreign  trade? 

Secretary  McAdoo.  Very  largely  on  account  of  the  inability  to  get 
vessels  to  move  the  foreign  commerce  of  the  United  States,  which,  of 
course,  is  carried  into  the  port  and  can  not  be  taken  out  as  fast  as  it 
goes  in. 

Mr.  Goodwin.  Does  that  embargo  exist  at  any  other  port  as  well  as 
at  New  York? 

Secretary  McAdoo.  I  understand  that  it  does,  although  I  am  told 
that  it  has  been  less  acute  in  other- ports,  because  shippers  have  been 
influenced  by  the  representatives  of  the  railroad  companies  not  to 
make  shipments  into  those  ports  until  thev  are  assured  that  vessels 
would  be  available  to  take  them  out  promptly.  Of  course  any  con- 
gestion in  the  terminals  of  the  great  railway  systems  at  New  York, 
or  in  the  great  harbors  of  the  country,  and  any  extended  congestion 
of  cars  on  the  sidings  along  the  lines  of  those  railroads,  whether  or 
not  due  to  the  fact  that  foreign  freight  in  those  cars  can  not  be  un- 
loaded, affects  very  seriously  the  domestic  commerce  of  the  country, 
which,  of  course,  can  not  be  kept  moving  if  machinery  of  transporta- 
tion is  clogged  and  disorganized  by  congestion  on  any  part  of  the 
lines  at  vital  points,  Avhich  are,  of  course,  more  particularly  the  great 
terminals  of  the  trunk  lines  at  New  York. 

I  may  say  that  Mr.  Alexander's  bill  of  September  -1.  1914,  was  the 
result  in  part  of  some  suggestions  which  I  had  the  privilege — with 
his  permission — of  submitting;  and  those  suggestions,  so  far  as  I 
am  concerned,  originated  very  largely  as  the  result  of  the  con- 
ference to  which  I  have  referred  and  the  experience  the  Govern- 
ment has  had  with  the  Panama  steamship  line.  As  you  know,  the 
Government  of  the  United  States  owns  all  of  the  stock  of  the  Panama 
Railroad  Co.  which  operates  a  line  of  steamships  between  New 
York  and  Panama;  and  the  Government  of  the  United  States  does 
not,  as  you  know,  operate  that  line  of  steamships  or  that  railroad 
directly."  But  as  the  chief  stockholder,  in  fact  the  sole  stockholder, 
in  the  company,  it  directs  the  selection  of  the  directors  of  this 
corporation.  And  while  the  selection  of  the  directors  is  under  the 
direct  sujiervision  of  the  War  Department,  nevertheless  the  directors 
of  the  corporation  itself  are  the  responsible  managers  of  the  corpo- 
ration, the  War  Department  having  supervision  of  the  operation 
of  the  lines,  working  through  the  directors  of  the  company. 

At  that  time  it  was  seriously  considered  whether  or  not  it  would 
be  possible  merely  to  extend  the  Panama  steamship  service  to  South 
America  and  those  other  ports  where  the  need  for  shipping  facilities 
was  most  imperative.  But  the  Panama  Railroad  Co.  would  have 
had  to  be  assisted  by  the  Government  in  order  to  get  the  necessary 
funds  with  which  to  buy  ships  and  this  would  have  required  action 

32910—16 18 


270      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

by  Congress,  and,  in  addition  to  that,  its  charter,  a  special  one  from 
the  State  of  New  York,  granted  many  years  ago,  confers  certain 
powers  which  it  can  not  exceed.  My  recollection  is  that  the  charter 
of  that  company  would  not  give  it  the  power  to  operate  vessels 
along  the  east  coast  of  South  America,  and  I  think  it  is  doubtful 
whether  the  corporation  has  the  right  to  operate  vessels  even  along 
the  west  coast  of  South  America,  although  it  might  have  that 
power ;  but  certainly  it  has  not  the  power  to  operate  vessels  to  Europe. 

Now,  this  crisis  arose  in  August,  1914,  and  if  the  Panama  Railroad 
agency  was  to  have  been  employed  at  all,  it  would  have  been  neces- 
sary to  get  the  State  of  New  York  to  grant  an  amendment  to  its 
charter.  That  amendment  could  not  have  been  obtained  until  the  fol- 
lowing January,  if  it  could  have  been  obtained  at  all,  when  the  New 
York  Legislature  was  to  meet.  In  the  meantime  delay  was  very 
serious,  and  the  idea  of  utilizing  the  Panama  Railroad  ship  corpo- 
ration for  this  purpose  had  to  be  abandoned.  The  purpose  of  Mr. 
Alexander's  bill  was  simply  to  create  another  corporation,  to  be 
operated  along  somewhat  similar  lines,  except  it  was  provided  that 
a  shipping  board  composed  of  the  Secretary  of  the  Treasury,  the 
Secretary  of  Commerce,  and  the  Postmaster  General  should  be 
created  for  the  purpose,  almost  exclusively,  of  selecting  directors 
of  the  corporation  and  having  a  sort  of  general  oversight  over  its 
operations  somewhat  similar  to  that  exercised  by  the  War  Depart- 
ment over  the  Panama  Railroad  &  Steamship  Co.  It  is  not  neces- 
sary for  me  to  go  into  the  history  of  this  measure,  because  you 
are  all  familiar  with  it.  You  are  familiar  with  the  debates  that 
subsequently  arose  and  the  objections  that  were  raised  against  it  on 
the  ground  that  it  was  putting  the  Government  into  the  shipping 
business.  But  I  may  say  that  the  bill  was  limited  practically  to  the 
creation  of  a  corporation  in  which  the  Government  was  to  be  a  ma- 
jority or  sole  stockholder,  if  necessary,  and  that  corporation  was  to 
operate  the  ships  which  were  to  be  bought  or  constructed  by  the 
shipping  board  and  turned  over  to  it. 

The  measure  is  very  different  from  the  one  which  is  now  under 
consideration.  It  was  formulated  at  that  time  purely  and  solely 
as  an  emergency  measure.  It  was  designed  to  meet  the  situation  as 
it  then  existed  by  enabling  the  Government  of  the  United  States 
through  the  medium  of  the  proposed  corporation  to  secure  six  or 
seven  hundred  thousand  tons  of  vessels  which  Avere  to  be  owned 
and  operated  by  this  corporation  and  used  for  the  protection  of  the 
commerce  of  the  United  States.  I  do  not  exaggerate  when  I  say  that 
if  that  bill  had  passed  we  would  now  be  in  possession  of  a  very 
large  fleet  of  excellent  merchant  vessels  which  could  be  used  effec- 
tively to  relieve  the  congestion  in  the  harbor  of  New  York  of  freight 
for  foreign  shipment,  and  that  we  could  have  supplied  some  facili- 
ties to  other  ports  of  the  country  which  have  been  suffering  enor- 
mously for  lack  of  shipping  facilities.  Take,  for  instance,  the  port 
of  Seattle.  Seattle,  I  suppose,  has  been  one  of  the  chief  suft'erers 
since  the  outbreak  of  the  European  war.  Not  only  have  they  had  no 
ships  in  which  to  send  grain  to  Europe  (and  Seattle  is  a  very  large 
grain  port,  as  you  know),  but  the  lumber  industry  in  Washington, 
which  is  vital  to  the  prosperity  of  that  State,  has  suffered  very 
greatly  from  a  lack  of  ocean  transportation.    When  I  was  in  Seattle 


SHIPPING  BOARD,  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE.      271 

in  October  last  I  was  told  they  were  shipping  grain  from  Wash- 
ington to  Liverpool  at  a  rate  of  72  cents  a  bushel.  The  rate  between 
Seattle  and  New  York  over  the  railroads  was,  of  course,  just  the 
same  as  it  was  before  the  outbreak  of  the  European  war,  because 
those  rates  are  subject  to  regulation.  They  are  fixed  by  the  railroads 
with  the  approval  of  the  Interstate  Commerce  Commission.  The 
increase  in  the  rate  is,  of  course,  from  New  York  to  Liverpool  over 
the  steamship  lines,  which  are  not  regulated  by  any  Government 
agency.  The  rate  of  freights  from  Seattle  to  Liverpool  by  water  is, 
in  normal  times,  18  cents  a  bushel.  So  you  can  see  the  difference  in 
the  rates  by  rail  and  water  now  as  against  the  water  rate  before  the 
war  between  Seattle  and  Liverpool — 72  cents  per  bushel  now  against 
]  8  cents  per  bushel  then. 

Mr.  Curry.  Has  the  Panama  Canal  Co.  increased  its  rates? 

Secretary  McAdoo.  No,  sir;  I  think  not. 

Mr.  Curry.  Do  you  not  know  that  the  Panama  Canal  Railroad  did 
increase  the  rates  when  the  slides  occurred  there  and  they  remained 
until  the  Chamber  of  Commerce  of  San  Francisco  and  others  made  an 
awful  holler  about  it? 

Secretary  McAnoo.  I  think  you  will  find,  if  you  will  ask  the 
War  Department  about  it,  that  that  is  a  mistake.  The  Panama 
Railroad,  as  I  understand  (and  I  state  this  subject  to  correction,  be- 
cause I  am  not  altogether  familiar  with  it),  pro  rated  with  the 
steamship  lines  which  went  through  the  canal  the  through  rate, 
which  is  lower  than  the  local  rate  for  transportation  across  the 
Isthmus.  When  the  slides  occurred  the  railroad  charged  simply  the 
usual  local  rate,  since  the  ships  blocked  by  the  slides  had  no  traffic 
arrangements  for  the  through  rate;  and  of  course  the  local  rate  is 
higher  than  the  pro  rata  of  the  through  rate.  That,  however,  the 
War  Department  could  very  easily  make  clear. 

Mr.  Curry.  The}^  did  decrease  the  rate.  After  it  was  taken  up 
with  the  War  Department  here  the  Government  sent  orders  to  their 
subordinates  to  reduce  the  rate,  and  it  was  reduced  to  a  reasonable 
amount. 

Secretary  McAdoo.  That  is  more  than  we  can  get,  Mr.  Curry, 
from  these  steamship  companies  and  concerns  not  under  Government 
control. 

Mr.  Curry.  Absolutely  true,  but  Government  control  and  Govern- 
ment ownership  are  entirely  different  propositions. 

Mr.  Greene.  You  suggested  that  six  or  seven  hundred  thousand 
tons  of  steamships  could  have  been  purchased  if  that  bill  had  passed. 
\Vhere  would  those  ships  have  been  purchased  ?  Who  had  them  for 
sale? 

Secretary  McAdoo.  I  say  I  think  they  could  have  been  purchased. 
I  say  that  from  the  fact  that  there  were  very  copious  offerings  of 
steamships  at  that  time.  In  the  report  which  the  Secretary  of  Com- 
merce and  the  Secretary  of  the  Treasury  made  on  the  25th  of  Janu- 
ary, 1915.  to  the  Senate  of  the  L'^^nited  States  in  response  to  a  reso- 
lution, and  which,  as  you  will  observe,  was  a  long  time  after  the  4th 
of  September,  when  Judge  Alexander  introduced  his  bill,  we  gave 
a  list  of  some  of  the  steamships  offered — some  English,  French,  and 
neutral  ships.  Of  course  I  did  not  investigate  these  offerings  be- 
cause I  had  no  authority  to  enter  into  negotiations.     The  bill  was 


272      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE 

pending,  and  we  could  not  do  anything.  But  you  will  find  that  as 
Exhibits  75,  A,  B,  and  C,  and  76  to  the  report,  Document  673, 
part  2,  Sixty-third  Congress,  third  session.  I  should  like  to  have  the 
privilege  of  offering  this  document  as  an  exhibit  to  mv  statement. 
(Exhibit  No.  8.) 

Mr.  Greene.  What  page  did  you  say  that  was? 

Secretary  McAdoo.  I  will  find  it  in  just  a  moment. 

Mr.  Greene.  I  am  not  particular  about  that  now,  but  if  you  will 
put  the  pamphlet  in  that  will  be  sufficient. 

The  Chairman.  They  were  not  German  interned  vessels? 

Secretary  McAdoo.  No. 

Mr.  Greene.  If  the  Secretary  will  put  that  into  the  record,  it  will 
be  sufficient  for  my  purposes. 

Secretary  McAdoo.  I  think  a  reference  to  the  particular  exhibit 
might  save  time  for  anyone  who  wanted  to  look  the  matter  up,  and 
with  your  permission  I  will  supply  the  exhibit  when  I  get  a  tran- 
script of  the  stenographer's  notes.  I  have  it  here,  but  it  is  difficult 
to  put  my  hands  on  at  the  moment. 

Mr.  Kincheloe.  Will  you  put  that  in  the  hearing? 

Secretary  McAdoo.  Yes;  I  offer  it  as  Exhibit  No.  8.  I  believe  it 
would  not  have  been  difficult  to  have  purchased  six  or  seven  hundred 
thousand  tons  of  vessels  at  that  time  at  bargain  rates.  There  were  a 
great  many  steamship  brokers  who  called  at  the  Treasury  after  this 
bill  was  introduced  and  talked  to  me  about  it.  I  said,  "  Of  course,  I 
have  no  povrer  to  negotiate,  and  it  would  be  a  waste  of  time  until 
power  is  conferred  by  the  Government  to  act."  Ships  were  offered, 
as  I  recall  it,  all  the  way  from  $40  to  $60  a  ton.  Many  of  them,  as  I 
said  before,  were  English  vessels,  some  were  French  vessels,  and  a 
great  many  were  neutral  vessels — Scandinavian  vessels. 

Mr.  Greene.  Are  those  vessels  or  similar  vessels  or  any  number  of 
vessels  now  in  the  market,  to  your  knowledge? 

Secretary  McAdoo.  I  think  not.  I  think  very  few  could  be  had  at 
this  time. 

Mr.  Greene.  So  that  even  if  this  bill  should  pass  there  would  be  no 
opportunity  to  buy  A^essels? 

Secretary  McAdoo.  I  doubt  if  we  could  buy  very  many,  although 
vessels  can  be  bought ;  there  are  a  few  being  sold. 

Mr.  Edmonds.  Was  there  anything  in  this  published  statement  by 
Mr.  B.  N.  Baker,  on  November  21,  that  it  was  intended  to  buy  the 
ships  of  the  International  Mercantile  ISIarine? 

Secretar}^  McAdoo.  There  was  no  intention.  Mr.  Baker  spoke  to 
me  about  it ;  he  said  it  would  be  possible  to  buy  those  ships. 

Mr.  Edmonds.  He  makes  a  positive  statement  in  this  signed  article. 

Secretar}^  McAdoo.  I  think  Mr.  Baker  is  mistaken  about  it;  but 
he  is  here  and  can  speak  for  himself.  Mr.  Baker  spoke  to  me  in  the 
early  days  of  the  discussion,  saying  that  the  International  Mercantile 
Marine  was  in  the  hands  of  a  receiver  and  that  it  was  possible  to 
buy  that  fleet  of  vessels.  Of  course,  it  did  not  go  any  further  than 
a  mere  suggestion  on  his  part. 

"Mr.  Greene.  That  would  not  have  increased  the  number  of  ves- 
sels, would  it  ? 

Secretary  McAdoo.  It  would  have  increased  the  number  of  vessels 
under  the  control  of  the  United  States.    Of  course,  the  great  point, 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      273 

gontliMiien,  was  this :  That  while  the  purchase  of  six  or  seven  hun- 
dred thousand  tons  of  vessels  at  that  time  would  not  have  added  to 
the  world's  tonnage,  it  would  have  added  to  the  tonnage  of  the 
United  States,  and  it  would  have  put  us  in  control  of  the  facilities 
and  instrumentalities  for  protecting  ourselves,  which  we  do  not  now 
have.  I  do  not  think  that  it  makes  so  much  difference  whether  you 
increase  the  world's  tonnage  or  not,  so  long  as  you  take  care  of  our 
own  interests. 

Mr.  Loud.  It  would  not  have  relieved  the  situation,  then,  would  it? 

Secretary  McAdoo.  Why  not  ? 

Mr.  Loud.  The  same  ships  are  in  the  service  now,  and  the  same 
ships  would  be  in  the  service  then. 

Secretary  McAdoo.  Yes;  but  we  would  have  them  in  our  service, 
and  they  would  not  be  in  the  other  fellow's  service;  they  would  be 
under  our  control,  and  we  could  provide  service  at  reasonable  rates 
and  prevent  extortionate  rates 

The  Chairman.  But  is  it  not  true  that  many  of  those  ships  which 
belonged  to  the  International  ^Mercantile  Marine  were  under  British 
registry,  and  have  since  been  commandeered  by  that  (Jovernment 
and  taken  out  of  the  commerce  of  the  world;  is  not  that  correct? 

Secretary  McAdoo.  That  is  correct.  You  see  this  must  be  consid- 
ered, that  the  International  Mercantile  Marine  Co.  is  the  controlling 
stockholder  in  the  White  Star  Line  and  other  foreign  steamship 
lines,  and  if  the  International  Mercantile  Marine  Co.  had  been 
controlled  by  some  agency  which  was  looking  out  for  the  interests 
of  the  shippers  of  this  countiy,  as  the  Government  would  have  been, 
for  instance,  if  it  had  gotten  control  of  that  company,  all  of  the 
British  and  other  vessels  which  the  International  Mercantile  Marine 
Co.  controlled  through  British  or  foreign  corporations  could  have 
been  transferred  to  the  American  flag  and  would  have  been  available 
for  our  service  instead  of  the  service  of  foreign  governments.  They 
would  be  carrying  American  commerce  instead  of  troops.  So  that 
it  would  have  improved  our  situation  distinctly  and  immeasurably. 

Mr.  Greene.  If  those  vessels  could  not  have  been  commandeered, 
other  vessels  would  have  been  commandeered  by  the  British  Govern- 
ment, would  they  not? 

Secretary  McAdoo.  They  could  not  have  commandeered  this  Gov- 
ernment's vessels,  of  course. 

Mr.  Greene.  But  thej'^  would  have  taken  some  vessels;  if  they 
lost  the  opportunity  to  have  those,  they  would  have  taken  others? 

Secretary  McAdoo.  If  they  could  have  gotten  them,  I  presume 
they  would.  But  the  situation  is  like  this :  Suppose  I  am  operating 
a  competing  line  of  railroad  from  here  to  Chicago  but  have  insuffi- 
cient locomotives.  If  I  can  buy  locomotives  from  some  other  coimtry 
and  put  them  on  my  line  of  railroad  which  will  enable  me  to  take 
care  of  my  traffic.  I  might  not  be  adding  anything  to  the  number  of 
locomotives  in  the  world,  but  I  certainly  would  be  adding  to  the 
number  of  locomotives  available  for  our  commerce  and  for  the  pro- 
tection of  our  own  interests.    And  that  was  the  purpose  of  this  bill. 

Mr.  Curry.  Can  you  buy  foreign  ships  now?  Has  not  Great 
Britain,  Germany,  and  most  all  of  the  great  maritime  nations  for- 
bidden the  transfer  of  their  ships  to  a  foreign  flag? 


274      SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Secretary  McAdoo.  I  saw  that  stated  in  the  papers;  I  presume  it 
is  true.  If  it  is,  those  Governments  are  simply  exhibiting  "human 
intelligence."  I  must  confess,  alas,  that  I  think  it  would  be  ex- 
tremely difficult  to  buy  ships  now,  and  if  you  do  buy  them  you  have 
got  to  pay  high  prices  for  them.  And  that  is  where  we  made  a 
fatal  mistake  in  not  getting  in  when  we  could  have  bought  a  great 
number  of  merchant  vessels,  and  when  we  could  have  gotten  them 
cheap.  It  is  like  locking  the  barn  door  after  the  horse  is  gone. 
At  the  same  time,  it  is  extremely  important  that  we  should  not  con- 
tinue to  drift,  and  it  is  infinitely  important  that  we  should  make 
a  beginning  in  trying  to  solve  this  great  problem;  because  our  for- 
eign commerce  to-day,  notwithstanding  the  fact  that  it  is  larger  in 
volume  than  it  has  ever  been  before,  is  still  very  seriously  hampered 
and  very  seriously  hurt  by  a  lack  of  shipping  facilities. 

Mr.  Curry.  Now,  Great  Britain,  Italy,  France,  Austria-Hungary, 
Norway,  Sweden,  Brazil,  and  some  other  countries  have  passed 
such  a  law — absolutely  prohibiting  the  transfer  of  registry  of  their 
shipping  to  a  foreign  flag.  That  being  true,  why  should  we  not 
refuse  to  transfer  the  registry  of  our  ships  to  a  foreign  flag? 

Secretary  McAdoo.  I  do  not  see  any  reason  why  we  should  not. 
Does  not  this  bill  provide  for  that  ? 

Mr.  Curry.  There  is  a  statement  here  from  the  Independent,  of 
Stockton,  Cal.,  of  February  12,  1916,  that  a  steamship  of  Mr.  Robert 
Dollar's,  for  which  he  paid  $250,000,  a  vessel  of  5,356  gross  tons,  was 
sold  by  him  to  the  Japanese  lines  for  $1,000,000.  He  was  offered 
$1,000,000  for  the  ship  Robert  Dollar  when  she  was  docked  in  San 
Francisco,  and  he  refused  it  because  he  had  a  contract  on  which  he 
would  make  $250,000  in  taking  a  cargo  from  San  Francisco  to  Vladi- 
vostok. But  after  he  had  delivered  the  cargo  at  Vladivostok  he 
then  sold  the  ship  for  $1,000,000,  the  ship  having  cost  $250,000.  I  do 
not  know  why  we  should  not  prohibit  the  transfer  of  our  ships  to  a 
foreign  flag  when  they  refuse  to  sell  us  their  ships. 

(The  newspaper  clipping  above  referred  to  is  as  follows :) 

STEAMER  "  KOBEKT  DOLLAB  "  IS  SOLD  TO  JAPANESE. 

San  Francisco,  February  11. 

The  sale  to  Japanese  owners  of  the  American  steamer  Robert  Dollar  was 
announced  here  to-day  by  the  Dollar  Steamship  Co.  It  was  said  that  the  price 
was  in  excess  of  one  million. 

The  Robert  Dollar,  now  in  Vladivostok,  is  a  vessel  of  5,356  jrross  tons  and  was 
built  in  1911  in  Glasgow  at  a  cost  of  $2.50,000.  The  vessel,  with  the  other  British 
ships  of  the  Dollar  fleet,  was  placed  under  the  American  flag  at  the  outbreak  of 
the  European  war  when  German  cruisers  were  busy  on  the  Pacific. 

An  offer  of  $1,000,000  was  said  to  have  been  made  for  the  Robert  Dollar  a  few 
months  ago,  but  refused,  as  the  trip  on  which  the  vessel  was  then  engaged 
promised  a  profit  of  $250,000,  the  original  cost  of  the  steamer. 

Secretary  McAdoo.  I  see  no  reason,  either ;  although,  of  course,  as 
an  economic  question,  in  large  measure,  this  may  be  true;  and  if  it  is, 
it  is  rather  essential,  because  I  understood  Mr.  Dollar  had  been  driven 
out  of  the  business  by  the  seamen's  act. 

Mr.  Curry.  ISIr.  Dollar  never  had  a  ship  under  the  American  flag 
in  the  over-seas  trade  until  after  the  outbreak  of  the  European  war. 

The  Chairman.  He  was  here  the  other  day  and  never  looked 
happier  in  his  life  to  me. 

Mr.  Greene.  I  understood  he  was  going  to  transfer  all  of  his  ves- 
sels to  Vancouver  anyway. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      275 

Secretary  McAdoo.  I  do  not  see  why  he  did  it,  because  certainly 
they  are  making  money  every  day  on  every  voyage.  Ships  have  been 
bought  and  are  being  bought  to-day  which  are  making  more  than 
their  entire  cost  in  a  single  voyage  and  coming  back  in  ballast ;  and 
if  there  ever  w^as  a  time  when  it  was  not  necessary  for  a  shipowner  to 
desert  the  flag,  this  is  the  time ;  and  if  there  ever  was  a  time  when  a 
man  who  has  ships  under  the  American  flag  ought  to  be  patriotic 
enough  to  keep  them  under  the  American  flag,  especially  when  they 
are  making  fortunes  on  every  trip,  this  is  the  time  he  ought  to  do  it. 

Mr.  Goodwin.  Is  not  this  primarily  the  thought  back  of  this 
whole  legislation,  that  inasmuch  as  the  European  Governments  now 
at  war  have  taken  over  practically  all  of  the  railway  and  steamship 
transportation  lines,  and  the  same  being  nationalized — usurping, 
so  to  speak,  the  functions  and  rights  of  private  and  corporate  interests 
that  formerly  owned  them — that  when  the  war  is  over  there  will  be 
the  greatest  commercial  rivalry  the  world  has  ever  seen,  and  the 
nations  that  have  lost  their  trade  will  seek  to  regain  it  and  to  extend 
it,  and  every  country  will  attempt  to  be  in  the  vanguard  of  this 
commercial  activity,  and  inasmuch  as  European  countries  have  na- 
tionalized those  activities,  thus  overcoming  and  outstripping  private 
and  even  corporate  interests,  that  therefore  they  are  outstripping  us 
in  this  commercial  conquest  as  long  as  we  permit  our  commerce  to 
remain  exclusively  in  the  hands  of  private  and  corporate  interests, 
and  therefore  we  should  ourselves  nationalize  in  a  measure,  or  seek 
so  to  do,  so  as  to  give  an  impetus  to  that  increased  activity  which  we 
ourselves  expect  to  take  part  in? 

That  is  rather  crudely  and  inadequately  expressed,  but  the  thought 
is  that  private  interests  in  the  future  can  not  cope  with  nationalized 
interests,  because  once  the  step  is  taken  forward  by  a  government 
it  will  not  be  retraced  either  in  times  of  war  or  in  times  of  peace? 

Secretary  McAdoo.  I  think  that  is  undoubtedly  true  and  that  it  is 
essentially  a  part  of  preparedness,  both  economically  and  physically, 
for  this  Nation  to  take  similar  measures  for  our  protection;  and  I 
think  that,  to  the  extent  the  foreign  governments  have  extended  their 
powers  over  the  shipping  of  their  respective  countries,  it  is  absolutely 
necessary  that  we  organize  and  concentrate  the  powers  of  this  Nation 
to  enable  us  to  protect  our  own  interests. 

Mr.  Goodwin.  That  is  the  thought  I  had  in  mind,  that  we  have  got 
to  keep  step  w  ith  that  movement. 

Secretary  McAdoo.  I  may  say  in  connection  with  the  purchase  of 
vessels  (and  I  advert  to  this,  gentlemen,  simply  because  I  think  it 
is  important  that  we  should  learn  the  lessons  of  the  past  in  order 
that  we  may  exercise  more  intelligent  judgment  in  the  future,  I 
think  it  is  obvious  to  any  man  who  Avill  review  the  events  of  the  last 
3'ear  and  a  half  that  a  very  grave  mistake  was  made  by  this  Govern- 
ment in  not  having  bought  as  great  a  number  of  merchant  vessels 
as  could  have  been  obtained  at  that  time.  Had  it  done  so,  the  extor- 
tionate and  fabulous  rates  of  freight  which  now  prevail  upon  the 
ocean  could  have  been,  so  far  as  the  vessels  under  Government  super- 
vision are  concerned,  cut  50  or  75  per  cent,  and  those  vessels  could 
have  earned  their  full  cost  even  at  those  reduced  rates  within  a  sin- 
gle year — they  could  have  earned  more  than  their  full  cost.  And  I 
think  they  could  have  exercised  a  very  potential  influence  upon  the 


276      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANl  MARINE. 

general  level  of  freight  rates  upon  the  ocean;  they  could  have  exer- 
cised an  influence  upon  it  just  as  the  war-risk  insurance  bureau,  with 
only  $5,000,000  of  capital,  has  exercised  a  very  potential  influence 
upon  the  general  war-risk  insurance  rates  of  the  world.  And  cer- 
tainly we  could  sell  those  ships  to-day,  if  we  had  bought  them,  at 
twice  their  original  cost — possibly  more. 

Looking  at  it  from  a  purely  commercial  standpoint,  I  think  it 
will  be  conceded  that  we  would  have  made  a  very  good  bargain  in- 
deed if  we  had  bought  those  ships  at  that  time.  And,  in  addition 
to  that,  with  the  control  of  that  large  tonnage  and  the  operation  of 
it  now  under  the  American  flag,  we  certainly  could  have  contributed 
very  greatly  to  the  alleviation  of  the  present  difficulties  from  which 
our  shippers  are  suft'ering  in  getting  their  products  into  foreign 
markets. 

The  present  bill  is  designed,  however,  to  be  a  very  much  more  con- 
structive and  permanent  measure  than  the  bill  introduced  in  Sep- 
tember, 1914.  That  bill,  as  I  said  before,  was  purely  an  emergency 
measure,  and  was  designed  to  meet  a  condition  which  was  then  acute, 
and  which,  I  think,  could  have  been  met  if  that  bill  had  been  passed. 
The  present  bill  goes  a  great  deal  further  than  that;  it  creates  a 
shipping  board  to  be  of  a  permanent  character,  with  very  large 
powers  of  regulation  and  supervision.  It  gives  this  board  the  power 
to  purchase  or  construct  ships  which  will  be  suitable  as  naval  auxil- 
iaries, so  that  they  may  be  made  an  essential  part  of  the  program 
of  preparedness  for  national  defense. 

I  do  not  think  it  is  necessary  for  me  to  advert  to  the  absolute  neces- 
sity of  having  the  Navy  supplied  with  at  least  a  part  of  the  naval 
auxiliaries,  which  it  will  need  if  war  ever  comes,  to  make  it  an  effec- 
tive fighting  unit.  I  believe  Admiral  Benson  was  here  yesterday,  and 
he  can  tell  you  more  about  that  than  I  can.  The  figures  I  received 
from  the  Navy  Department  some  time  ago  showed  that  we  did  not 
have,  in  our  merchant  fleet  to-day,  enough  vessels  to  give  the  Navy, 
as  it  exists  to-day,  sufficient  naval  auxiliary  support  in  time  of  war ; 
and  that  we  would  require  for  the  Navy,  as  it  exists  to-day,  some- 
thing like  four  or  five  hundred  thousand  tons  more  of  naval  auxil- 
iaries than  we  could  possibly  commandeer  from  the  present  merchant 
shipping.  One  of  the  purposes  of  this  bill  is  to  provide  the  ship- 
ping board  with  enough  money  to  enable  it  to  build  or  purchase — 
preferably  to  build — in  our  own  shipyards  a  fleet  of  merchant  ves- 
sels adapted  to  the  needs  of  the  Navy,  as  auxiliaries,  and  to  have 
them  used  in  time  of  peace  for  the  service  of  the  commerce  of  the 
country  and  the  creation  of  a  necessary  naval-reserve  personnel 
from  which  the  Government  can  recruit  the  naval  vessels  in  time 
of  war ;  and  to  provide  the  necessary  trained  organization  to  operate 
those  merchant  vessels  as  naval  auxiliaries  in  time  of  war.  The 
board  is  authorized  under  this  bill  to  lease  or  charter  these  vessels, 
or  to  sell  these  vessels  to  American  citizens,  with  a  reservation  that 
they  may  be  taken  back  in  case  they  are  needed  by  the  Government, 
upon  terms  to  be  fixed  by  the  board  with  the  approval  of  the  Presi- 
dent. That  relates,  of  course,  only  to  vessels  which  this  board  may 
acquire  either  by  purchase  or  sale. 

The  bill  also  provides  that  the  board  may  have  the  power  to  or- 
ganize a  corporation  and  to  take  a  majority  or  all  of  the  stock  of 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      277 

that  corporation,  in  behalf  of  the  Government,  for  tlie  purpose  of 
operating  some  of  these  vessels,  or  such  number  of  them  as  the  board 
may,  in  its  discretion,  think  desirable  in  the  interests  of  American 
commerce.  My  own  view  is  that  these  ships  should  not  be  operated 
in  the  foreign  trade  by  this  corporation  (it  is  not  a  Government  opera- 
tion, it  is  an  operation  by  a  corporation,  in  which  the  Government  is 
merel}'  a  stockholder)  in  competition  with  established  ship  lines  owned 
by  our  citizens,  which  are  furnishing  satisfactory  service  at  reason- 
able rates;  but  that  this  corporation,  if  it  should  be  organized  by  the 
shipping  board,  should  operate  ships  wherever  it  would  be  necessary 
to  extend,  or  desirable  to  extend,  American  commerce  and  to  operate 
them  to  those  parts  of  the  world  where  private  capital  does  not  pro- 
vide satisfactory  facilities  at  reasonable  rates.  The  bill  does  not 
make  it  mandatory  upon  this  board  to  organize  such  a  corporation 
and  to  oj^erate  any  ships  through  that  corporation;  it  is  merely  em- 
powered to  do  so.  And  I  think  on  reflection  that  you  will  see  that 
this  is  a  very  necessary  power  for  this  board  to  have,  if  the  public 
interest  is  to  be  protected ;  because  if  the  board  has  the  power  merely 
to  lease  or  to  sell  these  ships,  and,  as  the  alternative  of  that,  to  tie 
them  up  in  our  harbors  and  allow  them  to  remain  idle  (and,  as  you 
know,  steamships  depreciate  very  rapidly  when  idle),  then  the  public 
would  be  absolutely  at  the  mercy  of  shipowners,  who  would  know  that 
the  Government  could  not  protect  itself  because  it  would  have  to  let 
the  ships  remain  idle  unless  they  were  leased  or  sold  to  them  upon 
their  own  terms. 

And  in  this  connection  I  would  like  to  call  your  attention  to  the 
Federal  reserve  act.  When  that  act  was  under  consideration  there 
was  a  great  deal  of  discussion  as  to  whether  or  not  the  national 
banks  of  the  country  would  become  members  of  this  system.  It  was, 
of  course,  recognized  that  unless  the  national  banks  at  least  became 
welded  into  the  Federal  reserve  system,  so  that  we  had  one  effective 
and  powerful  financial  agency  in  the  country,  a  homogeneous  agency 
under  national  control,  it  would  be  impossible  to  protect  our  finan- 
cial situation  and  give  the  country  that  elastic  system  of  currency 
and  expansive  system  of  credit  which  every  student  of  the  question 
recognized  as  essential  to  our  present  and  future  prosperity.  If  the 
national  banks  had  failed  to  come  into  the  Federal  reserve  system 
by  refusing  to  become  stockholders  in  the  Federal  reserve  banks, 
the  system  could  not  have  been  established. 

Mr.  Greene.  If  they  had  not  come  in  they  would  have  been  out  of 
business,  would  they  not,  under  that  act?  You  would  have  organ- 
ized other  banks  and  they  would  have  been  shoved  aside.  They  had 
to  come  in  because  they  could  not  help  it. 

Secretary  McAdoo.  It  am  coming  to  that;  that  is  exactly  what  I 
want  to  explain.  A  provision  was  inserted  in  this  bill,  which  I  will 
quote.     Section  2  of  the  Federal  reserve  act  provides  as  follows : 

Sliould  the  subscriptions  by  banks  to  the  stock  of  said  Federal  reserve  banlvs 
or  any  one  or  more  of  them  be,  in  the  judgment  of  the  organization  committee, 
insufficient  to  provide  the  amount  of  capital  required  therefor,  tlien  and  in 
that  event  the  said  organization  committee  may,  under  conditions  and  regula- 
tions to  be  prescribed  by  it,  offer  to  public  subscription  at  par  such  an  amount 
of  stock  in  said  Federal  reserve  banks,  or  any  one  or  more  of  them,  as  said 
committee  shall  determine,  subject  to  the  same  conditions  as  to  payment  and 
stock  liability  as  provided  for  member  banks. 


278      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

No  individual,  copartnership,  or  corporation  other  than  a  member  banli  of 
Us  district  sliall  be  permitted  to  subscribe  for  or  to  hold  at  any  time  more 
than  $25,000  par  value  of  stock  in  any  Federal  reserve  bank.  Such  stock  shall 
be  known  as  public  stock  and  may  be  transferred  on  the  books  of  the  Federal 
reserve  bank  by  the  chairman  of  the  board  of  directors  of  such  bank. 

Should  the  total  subscriptions  by  banks  and  the  public  to  the  stock  of  said 
Federal  reserve  banks,  or  any  one  or  more  of  them,  be,  in  the  judgment  of  the 
organization  committee,  insufficient  to  provide  the  amount  of  capital  required 
therefor,  then  and  in  that  event  the  said  organization  committee  shall  allot  to 
the  United  States  such  an  amount  of  said  stock  as  said  committee  shall  deter- 
mine. Said  United  States  stock  shall  be  paid  for  at  par  out  of  any  money  in 
the  Treasury  not  otherwise  appropriated,  and  shall  be  held  by  the  Secretary  of 
the  Treasury  and  disposed  of  for  the  benefit  of  the  United  States  in  such  man- 
aer,  at  such  times,  and  at  such  price,  not  less  than  par,  as  the  Secretary  of  the 
Treasury  shall  determine. 

It  was  not  necessary  for  the  organization  committee  to  subscribe 
for  any  stock  on  the  part  of  the  United  States.  The  mere  fact  that 
the  GoA^ernment  was  prepared  to  take  that  stock,  so  that  the  establish- 
ment of  those  banks  was  put  beyond  all  question,  made  it  unneces- 
sary to  offer  any  of  the  stock  for  sale.  And  I  have  the  feeling  that 
if  this  marine  bill  should  pass,  the  mere  fact  that  the  Government 
has  the  power  to  operate  ships  in  the  interests  of  commerce  of  the 
United  States,  will  very  likely  make  it  unnecessary  that  it  shall  do 
so.  I  think,  furthermore,  that  the  possession  of  that  power  by  this 
board  will  make  the  people  who  wish  to  buy  or  lease  these  ships 
offer  to  the  Government  a  reasonable  price  for  them.  In  other  words, 
the  public  interest  will  not  be  absolutely  at  the  mercy  of  those  who 
want  to  buy  or  charter  ships,  and  they  will  be  compelled  to  offer  a 
reasonable  price  for  the  charter  of  those  vessels,  or  a  reasonable  price 
for  the  vessels  themselves,  if  they  buy  them. 

Mr.  Curry.  Do  you  feel  assured  that  private  interests  will  take 
stock  in  this  company? 

Secretary  McAdoo.  No;  I  do  not  think  it  necessary  that  private 
interests  should  take  stock;  because  you  have  this  difference  in  those 
two  matters.  The  only  alternative  of  the  banks  was  to  take  the 
stock  of  the  Federal  reserve  banks  or  the  Government  would  take  it ; 
in  this  case  the  alternative  is  for  American  citizens  or  corporations 
to  lease  or  to  buy  these  vessels  or  the  Government  will  operate  them. 
So  that  I  think  it  is  perfectly  clear  that  if  the  bill  is  passed  it  is  in 
the  public  interest  that  this  board  shall  have  a  discretionary  power 
which  will  enable  it  to  protect  the  public  interest  against  people  who 
otherwise  might — I  do  not  say  they  would,  but  we  have  to  recognize 
the  avarice  of  human  nature — make  their  own  terms  for  leases  or 
purchases  of  these  ships  if  the  Government  has  no  power  to  do  any- 
thing but  lease  or  sell  them. 

Mr.  CuRRT.  You  do  think  the  Government  should  run  the  ships 
after  constructing  them? 

Secretary  McAdoo.  I  do  not  think  the  Government  will  have  to 
run  the  ships,  but  if  conditions  arise  where,  in  the  judgment  of  this 
shipping  board,  the  commerce  of  this  country  needs  the  operation  of 
some  of  those  vessels,  then  I  think  the  board  should  have  the  discre- 
tionary power  of  operating  such  ships  through  this  corporation. 
There  is  a  very  decided  difference  between  the  operation  of  the  ships 
by  a  corporation  in  which  the  Government  is  merely  a  stockholder 
and  the  operation  of  ships  through  the  sovereignty  of  the  Govern- 
ment itself.    Let  us  take  the  case  of  the  Panama  Railroad  &  Steam- 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      279 

ship  Co.:  Suppose  a  shipper  over  the  lines  of  that  company,  either 
by  rail  or  steamship,  must  sue  the  company  to  assert  a  claim ;  he  deals 
with  it  just  as  he  does  with  any  other  business  corporation,  and  the 
sovereignty  of  the  Government  is  not  in  any  way  involved,  as  it 
would  be  in  the  case  of  vessels  operated  directly  by  the  Government — 
as  naval  vessels,  for  instance. 

The  Chairman.  Like  Senator  Weeks  proposed  in  his  bill  ? 

Secretary  McAdoo.  Yes,  sir ;  like  Senator  Weeks  proposed  in  his 
bill.  In  that  case  the  claimant  would  have  to  sue  the  Government 
in  the  Court  of  Claims  and  would  have  to  deal  with  the  Government 
itself  instead  of  dealing  with  a  business  corporation  whose  officers 
have,  of  course,  greater  elasticity  in  the  management  of  the  affairs  of 
the  corporation. 

Mr.  Curry.  Of  course  the  corporation  could  sue  and  be  sued. 

Secretary  McAdoo.  Yes. 

Mr.  Hardy.  If  the  Government  does  form  this  corporation  that 
is  spoken  of,  that  corporation  may  operate  some  of  the  vessels  ob- 
tained under  this,  and  at  the  same  time  the  Government  may  lease 
the  other  vessels,  or  other  of  the  vessels,  to  private  enterprise,  as  I 
understand  it.     Is  that  correct? 

Secretary  McAdoo.  Exactly. 

Mr.  Hardy.  So  that  some  of  the  vessels  that  we  obtain  under  this 
bill  might  be  leased  to  private  enterprise  or  corporations  while  the 
others  for  which  we  could  find  no  private  enterprise  would  be  oper- 
ated under  a  corporation  formed  under  this  law  ? 

Secretary  McAdoo.  Exactly.  I  think  I  could  illustrate  it  by  a 
concrete  example,  Mr.  Hardy.  Senator  Weeks's  bill  recognized  the 
fact  that  we  did  need  improved  facilities  to  the  west  coast  of  South 
America,  even  before  the  European  war  broke  out,  and  his  bill  was 
an  effort,  and  I  think  it  was  a  very  commendable  effort,  to  provide 
such  facilities.  He  was  alive  to  the  importance  of  doing  what  I 
think  we  all  realize  ought  to  be  done,  to  improve  our  commerce  and 
relations  with  South  America  and  other  countries.  He  had  in  mind 
the  utilization  of  this  great  Panama  Canal,  upon  which  the  Govern- 
ment has  spent  already  almost  $400,000,000,  and  the  improvement 
of  our' commercial  relations  with  the  whole  western  coast  of  South 
America  over  this  short  line  which  has  been  established  by  the  open- 
ing of  that  canal.  Now  let  us  assume  this  bill  was  passed  and  this 
board  had  the  ships.  Many  of  those  ships  might  be  leased  or  sold 
to  American  citizens  or  corporations — the  bill  wisely  limits  the  lease 
or  sale  to  American  citizens  or  corporations — and  they  might  operate 
those  ships  somewhere  else.  They  would  naturally  operate  them 
where  they  could  make  the  most  profit  out  of  them.  They  might 
say,  "  This  line  to  Chile  which  Mr.  Weeks  proposes  is  a  lean 
line;  there  may  be  very  little  profit  in  it;  there  may  be  none  in  it  for 
some  time."  But  the  interests  of  the  United  Stntes  might  require 
that  such  a  line  should  be  operated.  I  think  that  Mr.  Weeks's  bill 
and  the  debate  which  followed  it  clearly  shows  that  everybody,  with- 
out partisan  consideration  of  the  question,  regarded  the  establishment 
of  such  a  line  as  beneficial  to  the  United  States.  Now,  the  shipping 
board  could,  in  such  a  case,  cause  a  corporation  to  be  organized  as 
provided  in  this  bill,  transfer  the  necessary  vessels  to  it,  and  that 
corporation  could  operate  these  vessels  to  Chile  and  touch  at  inter- 


280      SHIPPIXG  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE, 

mediate  ports  with  advantage  to  the  business  and  commerce  of  the 
United  States  as  well  as  to  the  benefit  of  South  and  Central  America. 
Without  such  power  the  shipping  board  would  be  helpless  to  meet 
such  a  situation. 

Mr.  Loud.  And  this  Weeks  bill  was  an  effort  to  put  into  use  the 
siiips  of  the  United  States  which  were  then  lying  dormant  and 
which  are  now  lying  dormant? 

Secretary  McAdoo.  Those  ships  were  not  dormant;  those  are 
cruisers  which  he  wanted  to  use  and  they  are  in  service  all  the  time. 

Mr.  Loud.  The  Army  transports  and  naval  cruisers  which  could 
be  spared  were  dormant  as  far  as  commercial  work  was  concerned. 

Secretary  McAdoo.  He  specified  several  of  the  fast  cruisers  in  the 
original  resolution,  cruisers  which  were  actively  in  service  which  he 
proposed  to  put  into  commercial  use. 

Mr.  Loud.  But  they  were  dormant  so  far  as  commercial  purposes 
were  concerned? 

Secretary  McAdoo.  Oh,  yes. 

Mr.  Loud.  And  that  would  increase  the  tonnage  of  the  world  com- 
mercially, to  that  extent? 

Secretary  McAdoo.  Yes.  They  could  carry,  as  I  recall,  150  tons  of 
express  freight  each  and  probably  15  to  20  passengers  and  the  mail. 

Mr.  Loud.  Yes ;  and  something  like  500,000  tons  in  army  and  naval 
auxiliaries. 

Secretary  McAdoo.  I  do  not  think  there  is  anything  like  such  an 
amount  of  tonnage. 

Mr.  Loud.  There  is  300,000  in  the  Navy  alone,  and  I  think  24r 
ships,  army  transports,  besides  the  Panama  boats. 

Secretary  McAjdoo.  That  may  be,  but  it  is  not  all  available  for 
commercial  uses. 

Mr.  Loud.  Not  all,  but  a  portion  of  it  is. 

Secretary  McAdoo.  A  portion  of  it  could  be  used,  I  understand, 
but  not  a  very  great  portion.  However,  to  such  extent  as  it  is  avail- 
able and  can  be  utilized  it  ought  to  be  utilized. 

Mr.  Loud.  That  is  the  point  exactly. 

Mr.  Greene.  There  is  also  a  provision  in  this  bill  to  purchase 
vessels  as  naval  auxiliaries. 

Secretary  McAdoo.  Will  you  just  allow  me  to  elaborate  the  point 
I  was  making  when  interrupted,  and  then  I  shall  be  glad  to  answer 
any  questions.  Suppose  that  no  one  would  lease  or  buy  ships  for  the 
purpose  of  establishing  this  line  to  the  west  coast  of  Chile.  Then 
this  board  will  have  the  power  to  organize  a  corporation  and  to  sub- 
scribe to  the  stock  of  that  corporation  for  the  Government,  and  it 
can  offer  private  capital,  if  it  wants  to,  an  opportunity  to  participate 
in  that  stock  subscription.  Probably  private  capital  would  not  take 
it;  but  if  it  did  not  it  would  make  no  difference,  because  the  Gov- 
ernment itself  could  take  it  and  transfer  to  this  corporation  a  suffi- 
cient number  of  vessels  to  enable  that  corporation  to  operare  a  line 
between  the  ports  of  the  United  States  and  Valparaiso,  Chile.  They 
would  be  merchant  vessels  constructed  with  reference  to  naval  needs 
in  time  of  war  and  with  reference  to  the  particular  commercial 
needs  of  this  particular  line.  To  that  extent  the  Government  would 
then  have  provided  the  commerce  of  this  country  with  instrumentali- 
ties for  commerce  which  are  very  sorely  needed. 


bHIPPING  BOARD,  XAVAL  AUXILIARY,  AXD  MERCHANT  MARINE.      281 

As  I  said  before,  the  bill  does  not  make  it  mandatory  upon  the 
shipping  board  to  organize  such  a  corporation  and  to  operate  such 
ships  through  a  corporation.  The  board  will  have  the  power  to  do 
that  along  with  the  power  to  lease  or  sell  vessels.  I  assume  that 
the  board  in  all  cases  would  look  conditions  squarely  in  the  face  and 
deal  with  them  upon  their  merits  and  with  due  regard  to  what  was 
for  the  best  interests  of  the  country. 

Mr.  Greene.  If  those  vessels  are  used  as  naval  auxiliaries  and 
should  be  carrying  ammunition  and  all  such  material,  and  there 
should  be  trouble  between  the  nations,  would  not  the  use  of  those 
vessels  by  the  United  States  be  more  dangerous  than  if  private  indi- 
viduals used  those  vessels? 

Secretary  McAdoo.  No,  sir.    Why  should  it  be? 

Mr.  Greene.  Would  it  not  involve  the  United  States  in  interna- 
tional trouble? 

Secretary  McAdoo.  I  do  not  see  how  it  could  any  more  than  if 
the  vessels  were  owned  by  private  individuals.  If  the  Government 
was  a  stockholder  in  a  corporation  operating  those  vessels,  you  mean? 

Mr.  Greene.  Under  the  provisions  of  the  bill  for  the  use  of  those 
vessels,  if  they  should  be  used  as  naval  auxiliaries,  and  therefore  be 
United  States  vessels,  backed  by  the  power  of  the  United  States, 
would  there  not  be  some  international  difficulties  arise  with  foreign 
nations  if  some  foreign  nation  should  seize  one  of  those  vessels? 

Secretary  McAdoo.  They  would  not  be  used  as  naval  auxiliaries, 
except  in  time  of  war,  by  this  Government,  of  course;  so  that  you 
would  not  have  that  problem  to  confront  3'ou  in  time  of  peace.  If 
the  vessels  were  sold  to  an  individual 

Mr.  Greene.  Oh,  no;  not  sold;  but  used  to  ship  supplies  for  the 
Navy.  As  I  understood  Admiral  Benson  to  say  yesterday,  they  have 
vessels  now  to  transport  supplies  to  the  Philippine  Islands  and 
various  places.  And  if  they  transport  all  these  materials  that  are 
necessary  for  the  keeping  up  of  the  Navy  and  tranport,  for  instance, 
meats  and  flour  and  anything  that  is  of  use  to  keep  the  Navy  alive 
(because  the  Navy  could  not  survive  unless  it  had  something  to  sur- 
vive on;  the  men  could  not  live  without  it) — if  they  were  used  for 
that  purpose  and  were  bearing  the  flag  of  the  United  States  and  the 
vessels  should  be  seized  as  a  vessel  of  the  United  States,  would  there 
not  be  some  difficulty  to  arise  that  would  disturb  our  international 
relations  ? 

Secretary  McAdoo.  I  do  not  see  how  it  could.  And  then  operated 
by  whom? 

Mr.  Greene.  Operated  by  the  United  States. 

Secretary  McAdoo.  Directly? 

Mr.  Greene.  Yes;  under  this  bill.  Indirection  can  not  alter  the 
fact.  The  fact  that  you  do  it  indirectly  only  says  you  would  do  it 
directly  if  you  dared  to  or  not  if  you  "  dared  to"  but  if  you  wanted 
to.  But  you  do  it  indirectly  to  get  rid  of  trouble.  Noav,  would  you 
not  have  just  as  much  trouble  as  if  you  were  to  do  it  directly? 

Secretary  McAdoo.  Are  you  speaking  of  the  operation  of  these 
vessels  through  a  corporation  in  which  the  United  States  is  a  stock- 
holder ? 

Mr.  Greene.  Yes;  in  any  way  under  this  bill  the  Government  may 
come  into  it. 


282      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Secretary  McAdoo,  The  only  way  the  Government  could  have  any 
interest  here  that  could  be  affected,  as  I  see  it,  is  if  a  corporation 
is  organized  in  which  the  United  States  is  a  stockholder 

Mr.  Greene.  And  owner. 

Secretary  McAdoo.  And  owner  of  the  stock  of  the  corporation. 

Mr.  Greene.  Of  all  of  the  stock '^ 

Secretary  McAdoo.  Exactly  as  it  operates  the  Panama  Railroad 
&  Steamship  Co.    It  owns  all  the  stock  in  that  company. 

Mr.  Greene.  Well,  nobody  has  taken  the  Panama  Canal,  and  I 
hope  they  never  will. 

Secretary  McAdoo.  All  right;  I  want  to  illustrate  my  point.  If 
the  ship  is  operated  by  a  corporation  in  which  the  Government  is 
the  sole  or  the  majority  stockholder — that  is  your  question  as  I 
understand  it? 

Mr.  Greene.  Yes;  if  I  owned  a  vessel  and  I  got  into  trouble,  I 
would  have  to  look  out  for  myself;  but  how  about  the  United  States 
Government  ? 

Secretary  McAdoo.  You  could  not  look  out  for  yourself;  you 
would  have  to  ask  the  United  States  Government  to  look  out  for  you. 
That  is  just  the  point  I  want  to  bring  to  your  attention. 

Mr.  Greene.  Exactly.  What  I  did  I  might  be  punished  for; 
but  when  anybody  undertook  to  punish  the  United  States  I  want  to 
know  if  that  would  not  involve  them  in  trouble  ? 

The  Chairman.  Mr.  Greene,  I  would  suggest  that  you  allow  the 
Secretary  to  proceed.  I  think  we  can  clear  you  up  after  a  little 
while. 

Mr.  Greene.  I  think  you  have  votes  enough  to  clear  me  up  all 
right. 

Secretary  McAdoo.  With  your  permission  I  would  like  to  answer 
the  question  because  it  is  in  the  record  at  this  point,  and  then  I  will 
proceed  with  my  statement.  Let  us  assume,  gentlemen,  that  a  vessel 
of  the  Panama  Steamship  Co.  was  seized  by  Great  Britain  or  any 
one  of  the  belligerent  powers  and  taken  into  a  prize  court  for  any 
purpose  that  the  belligerent  thought  it  was  justified  in  seizing  the 
ship.  The  sovereignty  of  the  United  States  is  no  more  involved  in 
that  seizure,  because  the  United  States  owns  the  stock  of  the  Panama 
company,  than  if  that  ship  was  owned  by  any  man  sitting  at  this 
table  and  operating  it  under  the  American  flag;  because  the  affront 
is  not  to  the  property — if  it  is  an  affront  at  all — it  is  an  affront  to 
the  flag.  Once  you  lawfully  put  the  flag  of  the  United  States  upon 
a  vessel  the  ownership  of  the  vessel  is  immaterial  because  it  is  the 
flag  of  the  United  States  which  is  affronted  by  the  seizure,  whether 
the  vessel  carrying  that  flag  laAvfully  is  the  property  of  an  American 
citizen  or  corporation  in  which  individuals  are  stockholders  or  a 
corporation  in  which  the  Government  is  a  stockholder. 

Mr.  Greene.  It  is  good  doctrine,  if  you  will  only  stick  to  it. 

Secretary  McAdoo.  Your  question  implies  this,  Mr.  Greene,  that 
the  Government  of  the  United  States  would  make  a  greater  contest 
to  protect  a  piece  of  property  which  the  Government  of  the  United 
States  owns  than  it  would  to  protect  the  rights  of  citizens  of  the 
United  States  who  were  lawfully  using  the  flag. 

Mr.  Greene.  No;  not  as  to  whether  they  would,  but.  if  they  took 
a  Government-owned  vessel,  whether  or  not  it  would  not  raise  a 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      283 

question  that  would  be  more  important  than  simply  the  taking  of  a 
private  vessel? 

Secretary  McAdoo.  The  stockholder  is  not  the  corporate  entity  at 
all.  Here  is  a  corporation  which  is  a  distinct  entity.  The  mere  fact 
that  the  Government  of  the  United  States  owns  some  of  the  stock  in 
this  entity 

Mr.  Greene.  Owns  it  all. 

Secretary  McAdoo.  Owns  it  all — it  does  not  make  any  difference 
whether  it  owns  it  in  part  or  owns  all  of  it.  The  Government,  as  a 
stockholder,  is  not  the  owner,  but  the  corporate  entity  itself  is  the 
owner  of  the  property,  whoever  may  own  the  stock.  It  is  exactly  the 
same  as  if  you  owned  stock  in  a  railroad  company.  If  a  suit  for  dam- 
ages was  brought  against  the  railroad,  you  are  not  personally  in- 
volved; you  could  not  be  involved  as  a  stockholder  except  in  so  far 
as  losses  or  injuries  to  the  corporation  affect  the  value  of  your  stock. 

And  I  wish  to  call  your  attention  particularly  to  this  provision 
of  the  bill 

Mr.  (iREENE.  Is  not  there  a  difference  between  the  operating  of  a 
railroad — an  electric  road  or  a  railroad — and  operating  a  vessel  on 
the  high  seas? 

Secretary  McAdoo.  I  think  not,  sir,  except  so  far  as  the  admiralty 
laws  governing  ships  differ  from  the  laws  relating  to  railroads. 

Mr.  Greene,  i  am  not  a  lawyer,  and  I  am  asking  these  questions 
to  get  a  little  information,  if  you  have  it.  That  is  what  I  am  after; 
I  want  to  get  information.    I  wish  I  was  a  lawyer,  but  I  am  not. 

Secretary  McAdoo.  The  Panama  Railroad  Co.  operates  steamships 
as  well  as  the  railroad  on  the  isthmus,  but  the  ow-nership  of  stock 
by  the  Government  does  not  involve  it  directly  in  any  questions 
arising  out  of  the  operation  of  that  corporation.  The  Government 
does  not  have  to  answer  because  the  Government  is  not  directly 
involved  one  way  or  the  other — only  indirectly — and  its  sovereignty 
is  no  more  involved  in  questions  affecting  the  Panama  Steamship 
Co.  than  it  is  in  the  ship  which  any  man  sitting  at  this  table  might 
own  and  operate  lawfully  under  American  registr3\  because  it  is 
the  duty  of  the  Government  of  the  United  States  to  see  that  the  flag 
is  respected  and  that  the  rights  of  its  citizens,  whether  corporate  or 
individual,  are  duly  regarded  when  those  citizens  are  lawfully  exer- 
cising the  powers  and  rights  to  which  they  are  entitled. 

Mr.  KiNCHELOE.  And  would  not  that  be  the  same,  Mr.  Secretary, 
whether  they  were  owned  by  private  individuals  in  part  and  by  the 
Government  in  part  or  all  by  the  Government,  just  so  the  American 
flag  floats  over  it? 

Secretary  McAdoo.  Absolutely. 

Mr.  Curry.  Is  that  the  way  Great  Britain  looks  on  an  attack  on 
the  Suez  Canal,  in  which  she  is  a  majority  stockholder? 

Secretary  McAdoo.  That,  Mr.  Curry,  is  a  very  different  proposi- 
tion. The  Suez  Canal  is  fixed  property,  an  international  highway, 
affected  by  treaty  obligations  and  governed  by  totally  different 
laws  and  considerations. 

Mr.  Curry.  It  is  only  a  majority  stockholder. 

Secretary  McAdoo.  We  are  not  merely  a  majority  stockholder  in 
the  Panama  Canal.  We  own  it  outright,  and  a  different  rule  applies. 
The  users  of  the  canal  are  shipowners  who  operate  ships  on  the 


284      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

high  seas,  and  the  questions  we  are  considering  relate  to  the  ships 
themselves  and  not  to  the  canal.  The  States,  for  instance,  control 
the  highways,  and  questions  relating  to  them  are  quite  different 
from  those  arising  out  of  the  operation  by  private  owners  of  auto- 
mobiles or  vehicles  on  such  highways. 

Mr.  Curry.  I  think  this  is  very  important  as  to  the  attitude  of 
the  American  Government,  if  a  question  of  this  kind  should  arise. 
There  is  a  close  question  of  international  law  involved  there  and  as 
to  whether  there  would  be  friendly  relations  or  whether  it  would 
be  looked  upon  as  an  unfriendly  act  is  a  matter  that  ought  to  be 
looked  into  very  carefully.  If  a  belligerent  should  pick  up  one  of  my 
ships  and  take  it  into  a  prize  court,  the  United  States  Government 
under  international  law  should  protect  me  to  the  extent  of  its  ability, 
that  is  true. 

The  Chairman.  I  thought  we  had  agreed  unanimously  to  allow 
the  Secretary  to  complete  his  statement. 

Mr.  Curry.  The  Secretary  has  asked  to  have  this  done  now. 

Secretary  McAdoo.  I  just  asked  to  answer  that  question  since  it 
had  been  propounded  by  Mr.  Greene  and  put  into  the  record. 

The  Chairman.  I  did  not  understand  that. 

Mr.  Goodwin.  I  think  it  is  an  important  subject  and  should  be 
developed,  of  course. 

Mr.  Curry.  I  do  not  wish  to  interject  myself  her&,  Mr.  Chairman, 
but  the  Secretary  said  he  wanted  to  finish  this  proposition  up  now, 
But  if  he  would  rather  continue  I  will  defer  to  his  wishes. 

Secretary  McAdoo.  If  you  will  permit  me,  gentlemen,  to  continue 
this  discussion,  I  should  like  to  call  your  attention  to  the  fact  that 
this  bill  specifically  provides  that  "  all  vessels  " — this  is  section  6 — 

purcliased,  chartered,  or  leased  from  the  board,  as  herein  provided,  shall  be 
registered  or  enrolled  under  the  laws  of  the  United  States  as  vessels  of  the 
United  States  and  entitled  to  the  benefits  and  privileges  appertaining  to  vessels 
of  the  United  States,  and  shall,  when  and  while  employed  solely  as  merchant 
vessels,  be  in  all  respects  subject  to  all  laws,  regulations,  and  liabilities  gov- 
erning merchant  vessels,  whether  the  United  States  be  interested  therein,  as 
owner,  in  whole  or  in  part,  or  shall  have  or  hold  any  mortgage,  lien,  or  other 
interest  therein.     *     *     * 

No^v,  the  United  States  Government  has,  by  that  provision  specifi- 
cally put  foreign  nations  and  everybody  else  on  notice  that  it  has 
divested  itself  absolutely  of  any  rights  as  a  sovereign  in  these  vessels 
and  that  they  shall  be  treated  exactly  as  privately  owned  vessels, 
and  shall  be  subject  to  all  laws,  international  and  otherwise,  govern- 
ing merchant  vessels  of  this  character  operated  upon  the  high  seas. 
So  that  there  is  no  possibility  under  the  express  provisions  of  the  bill 
itself  for  any  question  to  arise,  any  international  question  of  the  kind 
you  have  described,  and  I  go  so  far  as  to  say — I  have  been  a  lawyer ; 
at  least  I  was  admitted  to  the  bar  and  have  tried  to  practice,  but 
don't  claim  to  be  a  very  good  one — ^I  do  not  think  there  can  be  the 
slightest  question  in  international  law  as  to  the  status  of  a  vessel  in 
which  the  United  States  or  anybody  else  is  a  stockholder,  whether 
that  provision  is  in  the  bill  or  not. 

Mr.  Greene.  Then,  the  provision  is  not  of  any  value? 

Secretary  McAdoo.  I  do  not  think  it  is  essential,  but  I  think  it 
is  a  very  wise  provision  to  meet  the  very  point  you  are  raising,  be- 
cause it  unquestionably  sets  tliat  question  at  rest. 

Mr.  Greene.  It  does  not  quite,  in  my  mind. 


SHIPPING  BOAKD,  NAVAL  AUXILIARY.  AND  MERCHANT  MARINE.      285 

Secretary  McAdoo.  I  feel  assured  in  ni}'  own  mind  that  no  such 
question  could  arise. 

I  should  like  to  refer,  for  a  moment,  to  the  importance  of  this 
measure  as  providing  essential  naval  auxiliaries.  Under  the  powers 
of  this  bill  the  board  will  have  authority  to  expend  $50,000,000  in 
the  construction  of  ships,  Afith  reference  to  their  availabilit}^  and  use- 
fulness as  naval  auxiliaries.  It  is  for  that  reason  that  the  Secretary 
of  the  Navy  is  put  on  this  board.  There  is  no  question  about  the 
fact  that  merchant  vessels  can  be  constructed  Avith  reference  to  naval 
uses  and  not  impair  their  usefulness  in  any  Avay  as  merchant  vessels, 
and  at  the  same  time  make  them  an  immensely  valuable  adjunct  as 
an  efficient  part  of  our  Navy.  One  of  the  troubles  with  our  Navy, 
as  I  understand  it,  is  that  we  have  not  developed  homogeneously  and 
correlatively  all  of  its  parts,  and  we  have  always  been  particularly 
negligent  of  the  necessity  for  naval  auxiliaries.  You  could  not  keep 
a  fleet  at  sea,  coaled,  provisioned,  and  ammunitioned  in  time  of  war, 
unless  3'ou  have  these  absolutely  essential  merchant  marine  naval 
auxiliaries.  It  is  true  you  can  improvise  out  of  your  merchant  fleet, 
if  3^ou  have  adequate  tonnage,  makeshift  naval  auxiliaries.  We  had 
that  experience  in  the  Spanish-American  AVar.  I  won't  read  a  list 
of  these  vessels  now.  but  I  should  like  to  put  into  the  record  a  list 
of  the  vessels  that  were  bought  by  the  Navy  in  1898,  costing  ap- 
proximately $18,000,000.  (Exhibit  No.  9.)  And,  in  addition  to 
that,  the  Navy  leased  certain  vessels  for  use  during  the  war  at  an 
additional  cost  of  $3,000,000.  (Exhibit  No.  10.)  And  of  the 
$18,000,000  invested  in  naval  auxiliary  vessels  a  large  part  of  them 
have  been  sold  for  about  20  per  cent  of  their  original  cost.  (Exhibit 
No.  9.)  I  think  it  is  perfectly  clear,  in  the  light  of  past  events,  that 
we  have  got  to  adopt  a  difl^erent  policy  for  the  future  with  respect 
to  the  creation  of  these  essential  naval  auxiliaries.  If  the  board  should 
provide  those  vessels  we  will  have  in  reserve  at  least  a  percentage  of 
what  the  Navy  would  require  in  time  of  the  country's  need;  and, 
while  providing  such  vessels,  Ave  will  be  able,  at  the  same  time,  as 
the  bill  contemplates,  to  put  them  in  use  for  the  furtherance  of  the 
commerce  of  the  country. 

It  is  true  that  with  $50,000,000  you  can  not  acquire  a  very  great 
fleet.  As  I  understand  it,  you  could  construct  about  500,000  or 
600.000  gross  tons  of  vessels,  or  about  40  per  cent  of  the  naval 
auxiliaries  required  by  the  Navy  as  it  now  exists.  There  is,  of  course, 
a  very  definite  limitation  upon  the  amount  of  merchant  tonnage  that 
this  bill  would  provide.  But  primarily  the  provision  of  that  number 
of  suitable  naval  auxiliaries  of  the  best  type  Avould  be  of  immense 
advantage  to  the  Navy.  It  would  very  largely  increase  its  efficiency. 
If  we  are  going  to  improve  our  Navy,  if  we  are  going  to  build  a 
great  Navy,  if  we  are  going  to  have  an  adequate  naval  force  to  pro- 
tect the  United  States,  then  it  is  absolutely  essential  that  these  naval 
auxiliaries  should  be  constructed.  My  judgment  is  that  they  ought 
to  be  constructed  even  if  they  are  kept  idle  in  our  ports — foolish  as 
keeping  them  idle  would  be — because  it  is  absolutely  senseless  to  con- 
struct a  great  Navy  Avithout  this  essential  auxiliary  arm.  AVithout 
it  the  Navy  can  not  take  care  of  itself  in  time  of  war. 

The  board  is  giA'en  poAver  to  make  investigations  into  our  naviga- 
tion and  shipping  laws,  and  to  make  recommendations  to  the  Con- 
gress from  time  to  time  as  to  what  may  be  done  to  improve  them  and 

32910—16 19 


286      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

further  encourage  our  merchant  marine.  You  gentlemen  ha\e  heard 
many  statements  here  about  our  navigation  laAvs.  The  average  man 
who  discusses  the  merchant  marine  question  says  glibly  as  an  in- 
fallible remedy  "  repeal  your  antiquated  navigation  laws."  People 
who  have  discussed  the  question  with  me  have  said  that  repeatedly, 
and  when  I  have  asked  them,  "  in  what  particular  Avould  you  have 
those  laws  repealed  or  altered,"  they  have  said,  "  I  don't  know." 
They  have  just  heard  that  sort  of  talk  and  think  there  must  be  some- 
thing Avrong  with  the  navigation  laws.  Now,  if  there  is  anything 
wrong  with  those  laws,  this  board  can  investigate  thoroughly  and 
ascertain  to  what  extent  modifications  or  changes  should  be  made; 
and,  to  that  extent,  it  will  exercise  and  perform  a  very  valuable 
function. 

Also,  the  provisions  for  the  regulation  of  steamship  companies,  as 
provided  in  section  9,  are,  to  my  mind,  of  paramount  importance. 
This  committee  is  more  familiar  with  that  subject  than  I  am,  because 
you  have  made  heretofore  a  very  exhaustive,  useful,  and  beneficial 
investigation  into  the  merchant-marine  conditions  throughout  the 
world.  I  think  it  is  recognized  on  every  hand,  especially  in  view  of 
the  things  that  have  occurred  since  the  JEuropean  war  broke  out  and 
the  actions  taken  by  other  nations,  that  it  is  imperative  that  this 
Government  should  give  to  some  board  the  power  to  protect  the  com- 
merce of  the  United  States  and  the  shipping  interests  of  the  United 
States.  I  think  that  not  the  least  useful  function  that  this  board  can 
exercise  is  the  power  to  prevent  or  restrain  foreign  steamship  cor- 
porations from  unfair  competition  with  ours.  When  Mr.  Douglas 
was  before  your  committee  the  other  day  he  made  the  statement  that 
notwithstanding  our  treaties  with  other  nations,  our  vessels  are  not 
given  the  same  treatment  in  many  quarters  as  are  given  to  British 
vessels.  Whether  that  statement  is  true  or  not  I  do  not  know.  It 
was  a  surprising  statement  to  me,  and  I  do  not  believe  it  to  be  true ; 
I  believe  Mr.  Douglas  is,  in  other  words,  honestly  mistaken  in  that 
statement,  because,  so  far  as  I  can  learn,  our  vessels  have  had  the 
same  treatment  in  every  respect  in  British  waters  that  British  ves- 
sels have  had  within  the  provisions  of  our  treaties  with  Great  Britain. 
But  whether  that  is  the  fact  or  not  with  respect  to  Great  Britain  or 
any  other  country,  to  have  a  board  here  empowered  to  act  for  this 
country  and  see  that  discriminations  are  not  practiced  against  our 
vessels  is  a  very  important  thing  to  accomplish. 

Again,  the  steamship  combinations  which  have  been  formed  in  times 
past  to  control  transportation  upon  the  high  seas,  combinations 
which  were  exposed  very  thoroughly  by  the  report  of  this  committee 
a  few  years  ago,  show  the  necessity  for  our  having  some  such  control 
or  power  over  foreign  steamship  companies  operating  in  our  waters 
as  will  compel  respect  of  our  laws  and  obedience  to  such  rules  and 
regulations  as  may  be  promulgated  by  law^ful  authority  in  this 
country,  covering  the  operations  of  foreign  steamships  in  our  waters. 
I  think  the  fact  that  these  steamship  corporations,  including  Ameri- 
can corporations,  had  formed  a  combination  and  did  partition  the 
commerce  of  the  world  among  themselves  prior  to  the  outbreak  of  the 
European  war,  fixed  rates  arbitrarily,  determined  the  service  to  be 
given,  did  as  they  pleased  without  accountability  to  anybody,  and 
put  into  operation  "  fighting  ships  "  to  destroy  competition  wherever 


SHirPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      287 

it  iippeaied,  was  not  only  a  most  serious  menace  to  private  enter- 
prise, but  actuall}^  prevented  the  investment  of  American  capital  in 
the  foreign  shipping  field.  B}^  the  power  to  license  these  foreign 
vessels,  we  can  compel  them  to  respect  the  laws  of  this  country.  It 
will  be  a  very  strong  instrumentality  through  which  we  may  prevent 
abuses  of  the  character  I  have  described  and  protect  the  legitimate 
interests  of  our  producers  and  shippers  and  shipowners. 

I  think  the  regulatory  power  provided  by  the  bill  over  domestic 
steamship  corporations  is  of  very  great  importance.  As  it  is  to-day 
we  have  no  regulatory  power  over  steamship  companies  of  any  kind. 
This  Ijill  undertakes  to  assert  through  this  shipping  board  a  reason- 
able measure  of  I'egulation  of  steamship  rates,  etc.,  in  order  that  the 
interests  of  the  shippers,  producers,  and  business  men  and  the  gen- 
eral interests  of  the  commerce  of  this  country  at  large  may  be  fully 
protected. 

There  is  another  provision  in  the  bill  which  I  regard  as  of  very 
great  importance  and  one  which  will  be  most  helpful  in  encouraging 
American  capital  to  engage  in  shipping  enterprises,  and  that  is  the 
provision  which  enables  the  railroads  of  the  country,  in  conjunction 
with  steamship  companies  operating  under  the  American  flag,  to 
make  special  rates  to  meet  competition  in  foreign  markets.  I  will 
illustrate  it  by  citing  the  case  of  a  merchant  at  Buenos  Aires.  For 
instance,  he  wants  to  bu}'  something  of  American  production  in 
Chicago.  He  also  asks  for  competitive  bids  in  Great  Britain  and 
Germany,  If  the  railroad  company  in  Chicago  is  asked  to  make, 
in  conjunction  with  the  steamship  line  under  the  American  flag 
operating  to  Buenos  Aires,  a  special  rate  that  would  enable  the 
American  merchant  or  manufacturer  to  meet  the  competition  of 
his  British  or  German  rival  in  Buenos  Aires,  it  can  not  be  done 
under  existing  law.  But  under  this  bill  the  railroad  company  and 
the  steamship  company  could  make  a  special  rate  on  that  export 
business  that  would  enable  our  merchants,  manufacturers,  and  pro- 
ducers to  compete  successfully  in  those  open  markets  of  the  world. 
I  read  the  other  da}'  in  the  papers  that  INIr.  Fairfax  Harrison,  presi- 
dent of  the  Southern  Railway  Co.,  had  called  attention  to  this  par- 
ticular feature  as  a  necessity  for  increasing  our  foreign  trade  in  a 
speech  delivered  at  New  Orleans  on  the  28th  of  January,  1916.  That 
was  before  this  bill  was  introduced  by  Judge  Alexander  and  before 
he  knew^  that  it  contained  any  such  provision  as  this.  I  should  like 
to  read  a  paragraph  from  that  speech  for  insertion  in  the  record. 
He  says: 

Cominf!:  back  again  to  the  question  of  railway  transportation  and  attempting 
to  formulate  some  of  the  things  wliich  the  American  railways  should  be  en- 
abled to  do  to  promote  foreign  trade,  I  turn  once  more  to  the  example  of 
Germany.  I  do  not  propose  Government  subsidies,  but  the  opportunity  to 
follow  in  private  endeavor  what  German  railways  have  done,  without  undue 
or  unnecessary  governmental  restriction.  The  German  railways  have  given 
most  effective  aid  in  the  development  of  that  country's  great  international 
traffic.  They  have  applied  special  rates  on  export  traffic  lower  than  on  domestic 
traffic,  and  again  special  rates  lower  on  export  traffic  to  German  ports  than 
on  that  passing  into  or  through  other  countries  by  rail.  In  their  rates  to 
German  ports  for  export  they  make  distinctions  between  traffic  destined  to 
different  countries.  That  is  to  say,  they  make  distinctions  in  their  charges  to 
meet  the  necessities  of  competition,  differing  in  degree  as  to  dfferent  terri- 
tories of  destination,  just  as  the  merchant  must  vary  his  profits  to  meet  the 
varying  competition  found  whenever  he  attempts  to  extend  his  trade  beyond 


288      SHIPPING  BOARD,  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

local  boundaries.  Our  railroads  in  the  United  States  must  do  these  things  if 
our  people  are  to  enter  broadly  into  competition  with  other  countries  for  a 
world-wide  trade.  And  they  are  ready  and  willing  to  do  so,  if  they  do  not 
thereby  endanger  the  entire  fabric  of  the  domestic  rates  on  which  they  must 
depend  for  bread  and  butter,  if  not  for  jam.  To  state  this  again,  practically 
and  not  theoretically,  the  railroads  of  the  United  States  must  be  allowed  to  do 
these  things  without  being  charged  with,  and  penalized  for,  discrimination 
against  domestic  traffic.  Such  a  proposal  requires  a  broad  vision  by  regulating 
authority,  but  it  has  well-rooted  precedents.  Even  the  Declaration  of  Inde- 
pendence does  not  claim  more  than  that  all  men  were  created  equal,  and  even 
Thomas  Jeffeuson  recognized  that  domestic  commerce  and  foreign  commerce 
were  two  separate  and  distinct  functions  governed  by  diiferent  laws,  even  when 
carried  on  by  the  same  individual. 

While  not  saying  that  in  every  particular,  in  every  sentence  Mr. 
Harrison  uttered  there,  I  am  in  accord  with  him,  I  do  say  that  in 
the  general  principle  I  am  in  thorough  accord.  I  believe  it  is  abso- 
lutely essential  to  the  promotion  of  our  foreign  commerce  that  our 
railways  and  our  American  steamship  lines  be  permitted  to  make 
special  rates  on  their  export  trade  which  will  enable  our  producers, 
merchants,  and  manufacturers  to  compete  successfully  with  their 
foreign  rivals  in  the  open  markets  of  the  world.  And  I  may  say, 
further,  that  this  sort  of  discrimination  in  favor  of  our  own  steam- 
ships does  not  contravene  any  treaty  obligations  of  this  Government. 
They  are  perfectly  legitimate  discriminations  which  we  may  extend 
to  our  ships  and  our  railroads,  discriminations  which  other  Govern- 
ments have  uniformly  practiced  in  favor  of  their  railroads  and  ships 
operating  under  their  own  flags  and  their  own  industrial  organi- 
zations. 

I  think  it  is  also  important,  as  provided  in  this  bill,  that  this  ship- 
ping board  shall  have  the  power,  in  conjunction  with  the  Interstate 
Commerce  Commission,  to  permit  shipments  over  railroads  to  catch 
specific  steamship  sailings.  These  things  will  greatly  encourage 
American  capital  to  go  into  steamship  enterprises,  because  to  that 
extent  it  will  put  them  on  a  favorably  competitive  basis  with  foreign 
steamships  which  have  similar  privileges  in  their  own  countries. 

There  are  provisions  in  the  bill  (section  11)  for  the  creation  of  a 
Naval  Eeserve  out  of  the  sailors  who  will  be  engaged  on  these  mer- 
chant vessels.  I  think  that  is  a  very  wise  provision.  At  a  very 
small  cost,  a  cost  which  the  department  estimates  will  be  less  than  the 
cost  of  maintaining  or  operating  a  single  battleship  a  year,  we  will  be 
able  to  provide  a  very  large  naval  auxiliary  personnel  which  will  be 
of  incalculable  benefit  to  the  country  in  time  of  war. 

I  do  not  know  whether  I  have  (and  I  think  I  have  not)  covered 
every  section  of  the  bill;  perhaps,  on  account  of  the  colloquies  we 
have  had;  but  that  may  be  developed  in  the  course  of  the  questions 
which  you  may  feel  disposed  to  ask. 

The  Chair:man.  Mr.  Secretary,  you  have  not  made  clear  just  how 
these  vessels  may  be  employed.  For  instance,  the  bill  provides  that 
the  board  may  cause  vessels  to  be  built  in  American  shipvards  or 
may  purchase  vessels  whether  built  in  American  shipyards  or  abroad. 
T  understand  the  bill  gives  the  board  that  poAver:  In  what  trade, 
do  you  understand  under  the  bill,  foreign-built  ships  purchased  by 
the  board  may  be  employed? 

►Secretary  McAdoo.  The  bill,  as  drawn,  permits  the  foreign-built 
ships  to  be  operated  only  in  the  foreign  commerce  of  the  United 
States.    As  drawn,  it  also  permits  ships  built  in  our  own  shipyards 


i 


SH1PPIN(5  BOARD^  NAVAL  AUXILIARV,  AND  MERCHANT  MARINE.      289 


to  be  employed  in  wlintever  trade  an  American  ship  is  entitled  to 
enpige,  coastwise  or  otherwise,  of  course. 

The  CuAiuArAN.  That  is,  it  may  be  leased  or  sold  to  a  person,  com- 
pany, or  corporation  to  be  used  in  the  coastwise  or  foreign  trade  if  it 
is  American  built? 

Secretary  McAnoo.  Yes. 

The  Chairman.  But  if  the  vessel  is  foreign  built  it  can  be  only 
utili/.cd  in  the  foreign  trade? 

Secretary  McAdoo.  That  is  correct  as  the  bill  is  now  drawn. 

The  Chairman.  And  the  bill,  as  drawn,  does  not  exclude  Porto 
I  Rico  and  the  Hawaiian  Isleands  from  the  coastwise  trade? 

Secretary  IMcAnoo.  No. 
>  The  Chairman.  Have  you  any  further  suggestion  with  reference 

to  these  foreign-built  ships,  as  to  how  the}'  may  be  utilized?  I  will 
say,  frankly,  that  under  existing  conditions  I  do  not  see  where  we 
can  buy  foreign-built  ships  nor  have  them  built  abroad,  because  my 
information  from  our  shipbuilders  is  to  the  effect  that  we  can  build 
ships  in  American  yards  now  as  cheap  or  cheaper  than  they  can 
[  be  built  abroad.     But  if  these  foreign-built  ships  were  admitted  to 

Ameiican  registry  for  the  foreign  trade,  they  might  trade  froui  New 
York  to  the  east  or  the  west  coast  of  South  America  or  to  the  P^ar 
East;  but  if  they  were  going  through  the  Panama  Canal,  for  in- 
stance, to  China,  Ja])an,  or  Australia  they  would  not  be  permitted  to 
carry  cargo  from  New  York  to  San  Francisco  or  Seattle  and  then 
proceed  on  their  journey  to  the  Far  East. 

^'ou  have  already  mentioned  tlie  condition  of  the  lumber  industry 
on  the  Pacific  coast,  and  the  canners  of  California  have  come  in  here 
with  a  complaint  that  they  need  additional  facilities  for  the  export 
of  their  connnodities.  Have  you  any  suggestions  to  make  along  that 
line  ? 

Secretary  McAnoo.  I  think  that  the  bill,  Mr.  Chairman,  is  faulty 
in  that  respect.  My  own  feeling  about  it  is  this:  One  of  the  objects 
of  this  bill  is  to  encourage  the  investment  of  American  capital  in 
steamship  lines,  in  the  deep-sea  lines.  The  American  capitalist,  the 
shipowner,  is  now  permitted  to  buy  a  foreign  ship,  no  matter  of  what 
age.  There  are  no  restrictions  upon  his  right  to  buy  ships;  he  can 
buy  them  in  any  market  of  the  Avorld  wherever  he  can  get  them 
cheapest  and  register  them  under  the  American  flag.  To  that  extent 
that  law  is  an  encouragement  to  private  capital  to  invest  in  ship- 
ping. We  have  got  this  discrimination,  however,  against  that 
American-owned  but  foreign-built  ship;  it  is  not  permitted  to  take 
on  and  discharge  cargo,  as  a  part  of  its  foreign  voyage,  at  ports  of 
the  Ignited  States  that  are  embraced  within  the  coastwise  area  or 
limitation.  For  instance,  let  us  say  that  an  American  owns  a  ship 
of  foreign  construction  which  he  has  registered  lawfully  under  the 
American  flag.  He  starts  on  a  voyage  from  New  York  to  New 
Zealand,  going  by  way  of  Chile  through  the  Panama  Canal.  If  he 
wants  to  ]Mck  up  a  cargo  after  leaving  New  York  at  New  Orleans 
and  another  one  at  Galveston,  and  then  go  on  to  a  foreign  country, 
and  to  di.scharge  a  part  of  his  cargo  at  New  Orleans  from  Ncav  York 
and  take  on  cargo  at  New  Orleans  for  Galveston  and  discharge  a 
part  of  his  cargo  at  Galveston  and  take  on  at  Galveston  other  cargo 
for  Chile  and  New  Zealand,  he  is  not  permitted  to  do  that.     And 


290      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

coming  buck,  for  instance,  from  Xew  Zealand  and  Chile,  if  he  wants 
to  stop  at  Galveston  and  discharge  a  part  of  his  cargo  and  then  to 
take  on  other  cargo  at  Galveston,  say  for  New  York  or  New  Orleans, 
and  then  to  proceed  on  his  voyage  to  New  York,  he  is  not  permitted 
to  do  that.  But  if  he  has  an  American-built  ship  he  can  do  that,  as 
1  understand  the  law. 

The  Chairman.  Under  this  bill  ? 

Secretary  McAdoo.  I  mean  under  existing  law.  I  think  we  can 
well  afford  to  encourage  American  capital  to  engage  in  deep-sea 
enterprise  by  permitting  American-owned  but  foreign-built  ships 
engaged  in  foreign  trade  to  touch  at  domestic  ports,  at  any  number 
of  domestic  ports,  and  to  take  on  and  discharge  cargo  as  an  incident 
to  its  foreign  commerce,  but  not  to  engage  exclusively  and  wholly 
in  the  coastwise  trade.  To  that  extent  I  think  this  bill,  if  amended, 
would  offer  a  ver}^  large  and  additional  inducement  to  American 
capital  to  engage  in  the  deep-sea  shipping  enterprises. 

You  can  take  another  case:  Suppose  an  American  vessel  of  for- 
eign construction  should  sail  from  Liverpool  with  a  cargo  for  New 
York,  and  then  suppose  it  had  an  order  to  carry  a  cargo  of  cotton 
or  grain  from  Galveston  to  Liverpool  on  the  return  voyage.  As  it 
stands  now  it  would  have  to  run  empty  from  New  York  to  Galves- 
ton, pick  up  its  cargo  there,  and  go  forward,  which,  of  course,  is  a 
great  economic  loss.  If  it  had  the  right  to  take  on  cargo  at  New 
York  for  Galveston,  discharge  that  cargo  at  Galveston,  and  then  to 
take  on  its  cargo  at  Galveston  for  Liverpool,  that  ship  would  be  more 
profitable  in  the  hands  of  an  American  capitalist  and  he  could  afford 
to  engage  in  that  business  when  otherwise  he  might  not  be  willing 
to  do  so.  It  might  mean  all  the  difference  in  our  foreign  trade  be- 
tween a  profit  and  a  loss. 

As  I  understand  the  laws  of  Great  Britain — -and  I  take  Great 
Britain  because  she  is  the  greatest  maritime  power— a  British  ship 
may  touch  at  every  domestic  port,  take  on  cargo  to  and  from  those 
different  ports,  and  then  sail  on  her  foreign  voyage.  To  that  extent 
she  has  an  advantage  over  an  American-owned  ship,  because  the 
American-owned  ship  can  not  touch  at  British  ports  as  a  part  of  her 
foreign  voyage;  but  if  the  American  ship,  although  foreign  built, 
could  touch  at  American  ports  and  take  on  and  discharge  cargo  as 
a  part  of  her  foreign  voyage,  then  she  would  have  reciprocal  or  com- 
pensating advantages,  so  far  as  our  trade  is  concerned,  with  her 
foreign  competitor. 

The  Chairman.  Our  colleague,  Mr.  Curry,  has  a  bill  pending 
before  the  committee  to  admit  foreign-built  ships  to  engage  in  the 
coastwise  as  well  as  in  the  foreign  trade,  providing  they  are  owned 
by  American  citizens  or  by  American  corporations,  in  which  a  ma- 
jority of  the  stock  is  owned  by  American  citizens,  which,  of  course, 
the  committee  will  have  a  chance  later  to  consider. 

Mr.  Greene,  in  his  questions  about  the  features  in  this  bill,  author- 
izing the  operation  of  these  ships  by  a  corporation  organized  under 
the  laAvs  of  the  United  States,  of  which  the  Government  owned  a 
majority  of  the  stock,  that  it  might  create  some  acute  international 
situation,  and  that  would  not  be  created  if  they  were  operated  by 
some  private  person,  firm,  or  corporation  said,  "Suppose  these  ships 
were  loaded  with  munitions  of  war  and  supplies  for  the  Navy." 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      291 

It  is  not  the  intent  that  these  vessels  shall  be  so  utilized  in  times  of 
peace,  is  it,  under  this  bill?  • 

Secretary  McAdoo.  Not  at  all. 

The  Chairman.  But  if  there  is  a  war  the  Navy  Department  takes 
them  over  under  orders  of  the  President,  and  then  they  become  a 
part  of  the  Navy,  and,  in  that  event,  would  have  the  same  status  as 
any  other  naval  vessel. 

Secretary  McAdoo.  Absolutely. 

The  Chairman.  But  in  time  of  peace  they  are  merchant  vessels 
;ind  tliat  condition  does  not  arise.  It  is  not  the  intent  that  these 
vessels  shall  be  used  to  carry  coal  for  the  Navy  and  meat  for  the 
Navy  and  munitions  for  the  Navy  in  times  of  peace ;  but  when  they 
are  being  operated  in  time  of  peace  under  the  provisions  of  this  bill, 
it  is  to  carry  our  commerce  aside  from  meeting  any  needs  of  the 
Navy? 

Secretary  ISIcAdoo.  Precisely,  except  in  so  far  as  the  Navy,  in  fime 
of  peace,  might  absolutely  require  the  use  of  these  vessels  perma- 
nently. 

The  Chairman.  Then  they  become  a  part  of  the  Naval  Establish- 
ment? 

Secretary  McAdoo.  Then  they  become  a  part  of  the  Naval  Estab- 
lishment, with  an  absolute  naval  status.  But  otherwise,  Mr.  Chair- 
man, section  6  of  the  bill,  as  I  said  before,  expressly  relegates  these 
vessels  to  the  status  of  ordinary  merchantmen. 

The  Chairman.  I  think  so,  if  it  is  possible  by  language  to  do  so. 
Now  it  has  been  said  that  $50,000,000  expended  to  buy  ships  would 
not  go  very  far;  it  would  not  provide  man}'^  ships.  I  think  it  is  esti- 
mated that  it  would  furnish  from  75  to  100  merchant  vessels. 

Secretary  IMcAdoo.  That  depends  on  the  size  and  tonnage. 

The  Chairinian.  On  the  size  and  the  cost,  of  course. 

Secretary  ^IcAdoo.  And  the  type. 

The  CHAiR:srAN.  But  if  we  had  50  vessels,  and  they  would  involve 
the  cost  of  a  million  dollars  each,  to  meet  present  emergencies  it  would 
be  a  great  asset  to  the  foreign  commerce  of  the  United  States,  would 
it  not  ? 

Secretary  McAdoo.  Unquestionably. 

The  Chairman.  In  that  connection,  a  gentleman  will  appear  later 
on  before  this  committee,  representing  the  American  Cast  Iron  Pipa 
Co.,  of  Birmingham,  Ala.,  to  show  just  what  it  would  mean  if  w« 
had  ships  under  the  American  flag  to  meet  conditions  in  our  foreign 
trade.  I  will  call  attention  to  that  later  on,  however.  If  we  had 
a  large,  flourishing,  American  mei-chant  marine,  in  the  event  of  war. 
of  course,  such  vessels  as  might  be  needed  would  become  a  part  oi 
the  Navy  and  would  be  commandeered  by  the  Government  for  use 
as  naval  auxiliaries;  is  that  true? 

Secretary  McAdoo.  Exactly. 

The  Chairman.  Now  we  do  not  have  those  vessels  under  the 
American  flag,  they  are  not  available,  and  the  purpose  of  this  bill  f" 
to  meet  the  conditions  of  our  foreign  trade,  and  while  we  are  doi/x^ 
that  we  are  necessarily  building  up  a  naval  auxiliary  for  use  in  time 
of  war? 

Secretary  McAdoo.  Precisely. 


292      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE, 

The  Chairman.  It  would  not  be  economically  sound  for  the  Navy 
to  provide  all  of  those  vessels  and  have  them  lying  useless  at  the 
docks  in  time  of  peace,  would  it  ? 

Secretary  McAdoo.  It  would  be,  I  think,  an  unjustifiable  waste 
except  to  the  extent  that  w^e  had  better  have  them  that  way  than 
not  to  have  naval  auxiliaries  at  all. 

The  Chairman.  But  it  is  not  necessary  to  do  that  ? 

Secretary  McAdoo.  Not  at  all.  No  other  nation  does  it.  They 
use  such  vessels  profitably"  in  commerce  in  time  of  peace  where  they 
have  a  naval  auxiliary. 

The  Chairman.  Referring  to  the  features  of  this  bill,  which  give 
to  this  board  regulatory  powers  over  our  commerce — domestic  and 
foreign — and  over  foreign  shipping  as  well  as  our  own,  under  the 
powers  vested  in  this  board  to  require  all  vessels  entering  our  ports, 
whether  foreign  or  domestic,  to  operate  under  licenses  issued  by  the 
Government,  deferred  rebates  could  be  effectively  prevented;  could 
they  not  ? 

Secretary  McAdoo.  I  think  so,  undoubtedly. 

The  Chairiman.  And  the  investigation  made  by  this  committee  of 
the  so-called  "  Shipping  Trust "  revealed  that  that  was  the  most  ef- 
fective weapon  used  by  the  ships  in  the  different  combinations  to 
shut  out  competition,  and  under  the  power  vested  in  this  board  the 
use  of  fighting  ships  to  prevent  competition  could  be  prevented,  could 
it  not? 

Secretary  McAdoo.  I  think  so. 

The  Chairman.  And  also  foreign  vessels  entering  our  ports  could 
be  compelled  to  grant  as  favorable  rates  to  American  shippers  in  the 
foreign  trade  as  to  shippers  from  their  own  countr}^? 

Secretary  McAdoo.  I  think  we  could  exercise  probably  as  much 
compulsion  as  that,  because  the  board,  having  the  power  to  grant  a 
license  and  to  rescind  a  license  once  granted,  may,  of  course,  impose 
certain  reasonable  terms.    You  could  correct  a  lot  of  abuses. 

The  Chairman.  We  could  correct  another  condition  existing  right 
now  in  Seattle;  the  city  of  Seattle,  the  county  and  municipality, 
have  spent  several  millions  of  dollars  in  the  erection  of  splendid  ter- 
minals or  docks.  You,  perhaps,  saw  them  when  you  were  there  last 
summer.  I  doubt  if  there  are  as  fine  terminals  anywhere  in  the 
United  States  to-day.  And  yet  the  shipping  combine  will  not  use  those 
terminals,  and  they  are  appealing  to  this  committee  and  to  Congress  to 
correct  that  condition.  If  this  board  were  created  and  vested  with 
the  powers  given  in  this  bill  that  condition  could  be  corrected,  could 
it  not? 

Secretary  McAdoo.  I  think  that  fair  treatment  for  our  shippers 
and  producers  could  certainly  be  secured  if  the  board  thus  created 
were  given  the  powers  contemplated  by  the  bill. 

The  Chairman.  A  gentleman  will  appear  before  this  committee 
to-day  who  w^ants  to  submit  a  bid  in  South  America  for  cast-iron 
pipe  in  competition  with  manufacturers  in  England.  The  British 
manufacturers  have  the  coercive  influence  of  the  British  Board  of 
Trade  and  are  getting  a  much  lower  rate  than  the  present  rate.  The 
Lamport  &  Holt  Line,  which  is  a  British  corporation  engaged  in 
trade  from  this  country  to  South  America,  will  not  quote  this  com- 
pany a  rate  at  all,  so  that  it  practically  means  we  will  be  shut  out 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.       293 

from  competition  in  that  trade.  Such  a  condition  as  that  could  be 
corrected,  could  it  not? 

Secretary  McAdoo.  I  think  so. 

The  Chairman.  That  gentleman  will  appear  before  our  commit- 
tee, and  I  think  tliat  presents  one  of  the  most  intensively  aggravating 
situations  which  have  been  called  to  my  attention. 

Secretary  McAdoo.  That  is  very  pertinent  illustration  of  the  diffi- 
culties under  which  our  shippers  are  trjdng  to  do  business  in  foreign 
countries,  where  we  have  to  ship  and  have  been  shipping  under  a 
foreign  flag.  The  British  ship  favors  the  British  producer;  the 
German  ship  favors  the  German  producer;  and,  as  the  American 
producer  has  to  depend  on  British  or  German  ships  to  carry  his 
product,  they  discriminate  against  the  American  producer,  and  he 
"  gets  it  in  tlie  neck,"  metaphorically  speaking.  We  have  no  control 
whatever  over  them.  They  charge  any  rate  the}^  please  and  do  as 
they  please.  But  with  the  establishment  of  such  a  board  we  can  deal 
with  such  conditions  effectively. 

Mr.  IIardy.  I  want  to  ask  just  one  or  two  questions.  I  will  try  to 
make  them  brief.  I  undei'stand  vou  to  say,  Mr.  Secretary,  that  the 
statements  made  by  Mr.  Douglas  the  other  day  to  the  effect  that  our 
vessels  were  not  given  the  same  treatment  in  foreign  ports  as  others 
were  given,  so  far  as  you  know,  is  without  foundation? 

Secretary  McAdoo.  I  said  that,  so  far  as  I  know,  it  is  incorrect. 

Mr.  Hardy.  Yes.  However,  there  is  a  practice,  I  understand,  fol- 
lowed in  general 

Secretary  McAdoo.  Pardon  me  a  moment.  He  spoke,  as  I  recall, 
particularly  with  reference  to  port  dues  and  charges  of  that  char- 
acter. That  is  what  I  mean.  In  other  respects  I,  of  course,  do  not 
undertake  to  say. 

Mr.  Hardy.  There  is  a  practice,  as  I  understand  it,  in  Germany  of 
quoting  discriminatory  railway  rates  on  goods  imported  in  German 
vessels  under  the  rates  chai-ged  on  goods  imported  in  other  vessels- 
Is  that  your  understanding? 

Secretary  McAdoo.  I  understand  that  is  true,  but  I  do  not  know. 

Mr.  Hardy.  I  understand  you  to  say  that  if  that  discrimination, 
which  is  an  indirect  discrimination,  is  practiced  that  that  would  be 
one  of  the  things  this  shipping  board  would  investigate  and  make 
recommendations  to  our  Government,  or  propose  rules  under  their 
authority,  to  counterbalance  it  ? 

Secretary  McAdoo.  Exactly. 

Mr.  Hardy.  It  seems  to  me,  and  I  would  like  to  know  whether  you 
agree  with  me,  that  those  methods  of  indirect  discrimination  ought 
somehow,  by  treaty  or  otherwise,  be  prevented. 

Secretary  McAdoo.  I  agree  with  you.  I  think  that  this  board,  hav- 
ing the  power  of  license,  and  so  forth,  can  exercise  a  very  potential 
influence  upon  those  questions;  because  if  they  discriminate  against 
our  vessels  we  could,  of  course,  retaliate. 

Mr.  Hardy.  I  was  just  going  to  suggest  that  question. 

■Secretary  McAdoo.  Eeialiation  in  such  circumstances  is  very  fre- 
quently productive  of  the  right  results. 

Mr.  Hardy.  On  the  other  hand,  if  our  only  recourse  is  to  retaliate 
it  certainly  would  be  justifiable  by  making  the  railroads  give  prefer- 
ential rates  on  goods  exported  in  our  ships,  would  it  not? 


294      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Secretary  McAdoo.  Yes;  as  far  as  we  could  do  so.  I  think  that  one 
of  the  great  things  we  accomplish  by  this  bill  is  the  organization  of 
the  powers  of  our  own  people  with  respect  to  this  subject  and  the 
putting  of  those  organized  powers  in  the  hands  of  a  shipping  board 
which  can  find  out  what  the  particular  abuses  are  and  apply  all  the 
remedies  within  the  law ;  and  if  the  remedies  under  this  bill  proA'e  to 
be  inadequate,  they  can  make  recommendations  to  Congress  for  addi- 
tional legislation. 

Mr.  Hardy.  In  other  words,  they  can  give  us  the  facts? 

Secretary  McAdoo.  Yes;  and,  in  the  meantime,  exercise  all  of  those 
powers  which  I  think  are  beneficial. 

Mr.  Hardy.  I  understand,  Mr.  Secretary,  and  you  put  it  strongly 
and  clearly,  that  you  are  in  favor  of  the  very  attitude  I  have  assumed 
from  time  to  time  before  this  committee,  that  in  your  opinion  those 
ships  that  are  owned  by  the  Government  under  this  bill  ought  to  be 
allowed  at  least  en  voyage  on  any  foreign-going  trip  to  touch  at  and 
carry  from  and  to  any  of  our  coastwise  ports  passengers  and  freight? 

Secretary  McAdoo.  I  think  that  they  have  that  power  anyway  so 
long  as  they  are  built  in  American  shipyards. 

Mr.  Hardy.  I  mean  regardless  of  whether  they  are  built  here  or 
not.  I  believe  that  these  vessels  which  are  built  and  acquired  by  the 
Government  under  our  flag,  and  owned  by  the  Government,  ought 
to  be  allowed  to  touch  at  ports  intermediate  along  the  coast  and  to 
take  on  and  discharge  cargo  at  those  points. 

Secretary  McAdoo.  As  an  incident  to  their  foreign  commerce,  yes. 
But  I  think  there  is  another  advantage,  Mr.  Hardy;  it  would  greatly 
stimulate  the  investment  of  American  capital  in  deep-sea  ships  if  in 
addition  to  saying  to  the  American  capitalist  that  he  can  buy  his 
ship  wherever  he  pleases  and  put  it  under  our  flag,  you  will  also 
say  that  he  can  buy  that  ship  wherever  he  pleases  and  to  touch  at 
our  domestic  ports  as  a  part  of  his  foreign  voyage  and  to  take  on  and 
discharge  cargo  at  intermediate  ports,  as  an  incident  to  and  in  con- 
nection with  the  operation  of  the  ship  in  the  foreign  commerce  of 
the  United  States.  I  think  it  would  perhaps  be  unwise  to  give  a 
foreign-constructed  ship  the  same  access  to  the  coastwise  trade  that 
we  give  to  our  vessels  built  in  American  shipyards.  The  reason  for 
that  distinction,  in  my  opinion,  is  this,  that  it  is  of  importance  to  the 
country,  as  an  essential  part  of  naval  preparedness,  to  encourage, 
as  far  as  we  reasonably  may,  the  upbuilding  of  our  shipyards. 

My  own  judgment  is — I  am  not  a  shipbuilder  or  a  ship  operator, 
and  I  confess  I  know  very  little  about  the  problem  and  I  certainly 
know  nothing  about  it  practically — but  as  a  result  of  my  studies  I 
am  convinced  that  it  would  tend  very  much  more  to  the  building 
up  of  American  shipyards  to  have  these  vessels  of  foreign  construc- 
tion given  the  privilege  of  participating  in  our  coastwise  trade  as 
an  incident  to  their  foreign  voyages,  than  if  they  are  not  so  priv- 
ileged; because  the  more  vessels  our  people  own  and  operate  under 
the  American  flag  the  more  it  will  stimulate  shipbuilding  in  this 
country  and,  certainly,  ship  repairing  in  this  country.  I  believe 
that  once  we  give  the  stimulus  of  the  world's  market  to  both  our  ship- 
owners and  our  shipbuilders,  we  will  be  able  to  do  in  the  ship- 
building field  exactly  what  we  have  done  in  many  other  fields  of 
American  endeavor,  to  build  cheaper  than  any  other  nation  on  earth 
can  build.     We  are  making    steel   and    other  structural    material 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AxSTD  MERCHANT  MARINE.      295 

cheaper  than  any  other  nation  in  the  world.  That  is  one  of  the  most 
essential  elements  in  the  construction  of  cheap  ships.  I  believe  we 
can  do  in  the  shipbuilding  business  exactly  what  we  have  done  in 
the  automobile  business.  In  the  automobile  business  we  are  em- 
ploying to-day  the  highest  priced  labor  and  are  selling  automobiles 
in  competition  with  other  countries  all  over  the  world.  Nobody  can 
touch,  in  cost  of  production,  the  Ford  car,  and  yet  Ford  pays  the 
highest  wages  to  his  employees  that  are  paid  any  place  in  the  world. 
And  the  same  thing  is  true  of  American  locomotives.  We  ship  them 
all  over  the  world,  and  in  competition  with  the  world.  We  do  the 
same  with  steel  rails  and  structural  steel.  The  only  reason  we  have 
not.  in  my  judgment,  developed  our  shipyard  facilities  and  resources 
before  is  because  we  have  ,i)ursued  a  narrow  policy  of  practically 
restricting  the  production  of  those  shipyards  to  our  coastwise  trade. 
Once  we  enter  uj^on  world  trade  and  get  a  groat  merchant  marine, 
both  foreign  and  American  built,  the  American  shipyards  will  profit 
by  that  broader  and  wiser  policy  very  much  more  than  they  will  by 
the  narrow  policy  of  being  confined  to  the  construction  of  sliips  used 
only  in  our  coastwise  trade. 

Mr.  Hardy.  I  agree  perfectlv  with  you,  Mr.  Secretary,  except  I 
go  a  little  further.  I  believe  if  these  ships  were  understood  to  be 
entitled  to  enter  into  our  foreign  or  coastwise  trade,  without  refer- 
ence to  where  they  were  built,  and  without  any  distinctions  between 
them,  that  every  ship  that  we  have  built  under  this  bill  in  the  com- 
petitive markets  of  the  world,  or  built  in  the  United  States  shipyards, 
in  starting  on  that  course  the  United  States  shipyards  would  build 
ships  for  us  and  for  other  nations  as  cheaply  as  any  other  country  in 
the  world  could  do.  And  therefore,  while  the  suggestion  you  make 
is  eminently  desirable.  I  think  you  could  go  further  without  hurting 
any  of  the  interests  of  this  country. 

Secretary  McAnoo.  I  think  this.  Mr.  Hardy:  I  think  that  we  could 
afford  to  continue  the  advantage  to  our  shipyards  they  now  have  with 
respect  to  the  coastwise  trade,  for  the  time  being,  modified  only  to  the 
extent  I  have  indicated.  And,  certainly,  we  can  take  the  next  step 
later  if  this  produces  a  beneficial  effect. 

Mr.  Hardy.  I  am  more  than  willing  to  go  carefully. 

Secretary  McAnoo.  I  think  the  great  thing  to-day  is  to  get  Ameri- 
can capital  more  largely  interested  in  the  shipping  field.  The  more 
American  capital  we  can  succeed  in  getting  invested  in  ships,  and  in 
the  operation  of  ships,  the  greater  benefit  it  is  going  to  be  to  the 
American  shipyards  and  the  more  the  American  shipyards  are  going 
to  be  able  to  compete,  whether  the  American  shipyards  build  the 
original  ships  or  not. 

Mr.  Hardy.  I  do  hope  our  committee  will  see  the  wisdom  of  going 
as  far  as  the  Secretary  suggests,  at  least. 

Secretary  McAdoo.  Of  course,  I  am  only  submitting  this  for  the 
consideration  of  the  committee.  This  is  not  something  in  which  I 
am  trying  to  force  my  view  upon  you.  I  am  only  expressing  them 
for  what  they  may  be  worth. 

Mr.  Greene.  The  Spanish  war  vessels  that  were  bought  at  the  time 
of  the  Spanish-American  War  w^e  bought  without  much  care  as  to 
what  use  could  be  made  of  them,  only  we  had  to  have  something,  did 
we  not,  and  we  paid  any  price? 


296      SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MEECHANT  MAEINE. 

Secretary  McAdoo.  Precisely.  We  were  not  prepared  in  any  way 
and  had  to  submit  to  any  extortion,  while  getting  makeshift  craft 
as  well. 

Mr.  Greene,  No  ;  we  were  not  prepared  in  any  way,  and  that  was 
supposed  to  be  a  great  calamity,  and  yet  proved  to  be  otherwise. 
But  we  had  not  anything  at  all,  and  we  bought  vessels  at  enormous 
prices  and  sold  them  at  very  low  prices  and  got  rid  of  them  because 
they  absolutely  should  not  have  been  purchased  except  of  necessity. 
In  this  case,  in  your  chance  to  purchase,  you  probably  would  have 
to  pay  very  exorbitant  prices  and  you  testified  that  you  thought  you 
would  have  to  pay  pretty  exorbitant  prices,  did  you  not,  if  you  can 
buy,  and  jou  do  not  know  that  you  can  buy  any  ? 

Secretary  McAdoo.  Mr.  Greene,  my  view  of  that  is  this:  This 
board  will  have  the  power  to  purchase  ships.  I  should  think  that  a 
board  of  this  character  would  be  intelligent  enough  not  to  buy  a 
ship  unless  it  can  buy  it,  whatever  the  price  might  be,  with  advan- 
tage to  the  country  and  to  the  commerce  of  the  country  to  be  utilized 
for  the  time  being  to  meet  an  emergency.  Now,  if  the  compensating 
advantages  were  adequate  it  would  be  justified  in  paying  a  high 
price  for  the  ship,  and  if  they  were  not  I  think  the  board  certainly 
would  not  do  it.  It  is  most  important,  however,  that  some  organ- 
ized poAver  should  exist  here  to  deal  with  all  these  problems  as  they 
come  along.  No  one  can  tell  how  much  longer  this  European  war 
is  going  to  last.  Certainly  conditions  in  the  shipping  field  are  be- 
coming more  acute  every  day.  We  are  absolutely  and  utterly  un- 
prepared to  deal  with  any  of  the  problems  that  have  arisen  since 
this  Avar  so  far  as  the  American  merchant  marine  is  concerned,  and 
we  have  taken  no  steps  since. 

Mr.  Greene.  In  many  of  the  subsidy  bills  introduced  in  Congress 
since  I  have  been  a  Member  here  there  have  been  a  number  of  pro- 
visions made  for  merchant  vessels  as  naval  auxiliaries,  to  be  con- 
structed^ under  the  direction  of  the  naval  authorities,  and  this  propo- 
sition put  into  this  bill  is  simply  enlarging  on  that  idea  that  has  here- 
tofore been  proposed  in  various  subsidy  bills. 

Secretary  McAdoo.  I  am  not  so  familiar  with  the  bills  to  which 
you  refer.  Of  course,  here  is  a  concrete  proposal  for  the  Government 
of  the  United  States  to  spend  $50,000,000  in  creating  naval  auxiliaries. 

Mr.  Greene.  But  they  would  not  spend  the  $50,000,000  for  naval 
auxiliaries,  but  the  vessels  would  go  into  trade  and  everything  else. 

Secretary  McAdoo.  I  am  simply  explaining  that  here  is  a  concrete 
proposal,  so  far  as  this  bill  goes,  to  expend  that  much  money  to  do 
something  toward  the  creation  of  a  merchant  marine  that  will  also 
be  adaptable  to  naval  auxiliary  uses  in  time  of  need,  and  to  that  ex- 
tent we  will  provide  a  small  percentage  of  what  the  Navy  might  re- 
quire in  an  emergency.    We  certainly  can  be  sure  of  that  much, 

Mr.  Greene.  In  our  subsidy  bills  we  had  a  very  limited  sum,  very 
much  less  than  proposed  in  this  bill,  and  very  much  less  than  the  ex- 
pansion of  it  will  mean  in  the  future,  and  yet  those  bills  were  consid- 
ered outrageously  extravagant  and  wild,  to  spend  money  for  the 
purpose  of  building  up  a  merchant  marine. 

The  Chairman.  They  would  have  provided  for  about  15  or  16 
ships,  with  an  expenditure  of  from  three  to  five  millions  a  year. 

Mr.  Greene.  I  understand;  but  it  was  to  aid  something  else.  It 
was  not  to  build  ships  entirely,  but  it  was  to  aid  the  people  in  the 


SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      297 

trade  and  to  enable  them  to  overcome  the  disadvantages  in  the 
American  foreign  shipping  as  Ave  find  now  disadvantages;  and  this 
is  an  attempt  to  put  the  Government  in  because  of  the  fact  that  the 
Government  will  have  money  enough  to  do  this  which  an  individual 
might  not  do,  to  compete  with  the  foreign  nations. 

Secretary  McAdoo.  My  view  of  that  is  this,  Mr.  Greene :  We  have 
hugged  the  hoary-headed  delusion  or  dogma  for  many  years  that  we 
can  not  construct  and  operate  a  ship  under  the  American  flag  profit- 
ably. This  is  like  a  great  many  other  dogmas  which  get  the  sanctity 
of  hoariness  and  in  time  come  to  be  commonly  accepted.  I  think 
that  one  of  the  greatest  things  this  shipping  board  can  do,  if  au- 
thorized and  given  the  means  to  build  a  fleet,  will  be  to  demonstrate 
by  the  actual  construction  of  vessels  that  we  can  produce  a  type  of 
ship — and  I  am  confident  that  we  can  do  so — which  can  be  built  in  an 
American  shipyard  cheaper  than  anywhere  in  the  world  and  can  be 
operated  with  high-priced  American  labor  cheaper  than  anywhere 
in  the  world.  That  is  due  to  various  causes,  not  only  because  we  have 
American  genius  and  skill  to  do  it  but  because  we  produce  the  struc- 
tural material  that  goes  into  the  ship  cheaper  than  anybody  else  can 
do  it.  I  believe  the  Government  can  demonstrate  by  developing  a 
standard  t^'pe  of  cargo  vessel  that  we  can  accomplish  just  that  result. 

Now,  that  assumption  is  based  upon  another  great  advantage  that 
this  country  has  in  the  form  of  the  fuel-oil  supply.  We  have  more 
than  50  per  cent  of  the  crude  oil  of  the  world,  and  I  think  that  the 
types  of  the  future,  the  types  that  are  going  to  give  us  dominion  over 
the  seas,  are  just  the  types  which  American  genius  and  enterprise 
and  material  can  construct  and  operate  with  the  cheap  fuel  oil  so 
lavishly  bestowed  upon  us  by  nature. 

Let  me  illustrate  the  necessity  for  governmental  demonstration  of 
such  things  at  times.  I  was  very  much  interested  in  a  conversation 
I  had  a  few  days  ago  with  Mr.  Vrooman,  Assistant  Secretary  of 
Agriculture.  He  told  me  a  number  of  extraordinary  facts  about  the 
value  of  governmental  agency  in  demonstrating  the  usefulness  of 
certain  things  to  the  people  of  this  country.  Some  years  ago  the 
Department  of  Agriculture  undertook  to  demonstrate  that  the  cow 
tick  could  be  eradicated  without  injury  to  the  animal.  That  is  a, 
very  serious  injury  to  the  farmers  of  the  country — the  cow  tick. 
These  could  be  destroyed  by  the  very  simple  process  of  immersing 
the  cow  in  a  vat  containing  a  chemical  fluid.  The  farmers  had  the 
notion  that  their  cows  would  be  poisoned,  or  that  the  flow  of  the  milk 
from  the  cow  would  cease,  if  subjected  to  this  process.  In  some  cases 
where  vats  were  established  by  the  Department  of  Agriculture  they 
were  blown  up  by  dynamite,  and  in  other  places  employees,  who  at- 
tempted to  demonstrate  the  process,  were  mobbed;  but  that  finally, 
after  some  time,  they  succeeded  in  convincing  the  farmers  by  actual 
demonstrations  that  the  cow  tick  could  be  eradicated  without  injury 
to  the  animal,  and  it  has  resulted  in  enormous  benefit  to  the  farmers 
of  the  country. 

The  same  thing  is  true  of  hog  cholera.  He  said  that  the  mortality 
in  hog  cholera  Avas  something  like  29  per  cent  in  three  typical 
counties,  which  he  mentioned  to  me.  When  the  hog  cholera  serum 
was  developed  the  Government  tried  to  get  the  farmers  to  use  it, 
but  they  would  not  do  it,  and  finally  the  Government  had  to  make 
actual  demonstrations  itself.     In  the  three  counties  in  question  by 


298      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

the  use  of  the  serum  they  reduced  the  mortality  from  29  per  cent  to 
1.7  per  cent.  The  growth  of  the  stock  has  enormously  increased  in 
those  counties,  all  of  which,  of  course,  is  a  great  contribution  to  the 
wealth  of  the  countr3\ 

Now,  if  the  Government  had  not  exercised  its  agency  of  demonstra- 
tion in  these  cases  we  might  still  be  just  as  backward.  I  think  we 
have  got  to  demonstrate  the  same  thing  in  the  shipping  field,  the 
same  as  the  demonstrations  we  are  making  in  the  Bureau  of  Stand- 
ards in  many  scientific  directions  and  in  the  Department  of  Agri- 
culture which  have  proven  so  beneficial  to  the  country. 

And  so  I  think  by  the  construction  of  these  naval  auxiliaries  that 
Ave  must  have  for  the  American  Nav3\  at  least  for  effective  prepared- 
ness, we  will  make  demonstrations  to  American  capital  that  will 
result  in  inducing  very  much  larger  investments  in  shipping  enter- 
prises than  we  have  had  before. 

(Thereupon,  at  12.45  o'clock  p.  m.,  the  committee  took  a  recess 
until  2  o'clock  p.  m.) 

AFTER  RECESS. 

The  committee  reconvened  pursuant  to  the  taking  of  the  recess. 
The  Chairman.  You  may  proceed,  Mr.  Secretary. 

STATEMENT  OF  HON.  WILLIAM  G.  McADOO— Continued. 

Mr.  Greene.  You  referred  to  the  hoary -headed  proposition  of  the 
people  who  advocate  subsidy.  I  want  to  say  to  j'ou  that  in  the  first 
session  of  the  Congress  that  I  was  here  we  passed  a  subsidy  bill  in 
the  House  of  Eepresentatives,  the  first  time  it  had  ever  been  passed. 
It  failed  in  the  Senate,  near  the  close  of  the  session.  Since  then 
we  have  come  within  one  vote  of  passing  it  again  in  the  House,  after 
it  had  passed  the  Senate. 

Now,  under  those  propositions  of  subsidy,  I  want  to  make  plain 
to  you  it  was  not  proposed  to  build  the  vessels  but  to  render  aid  to 
men  who  were  in  the  trade  and  who  understood  it  to  open  up  mail' 
lines.  That  is  what  we  subsidized;  we  subsidized  the  mail  lines. 
The  act  of  1891  is  still  in  existence.  We  have  never  been  able  to  ex- 
tend that ;  we  have  tried  several  times  to  extend  it  and  could  not  do  it. 
If  we  could  have  extended  this  mail  act  of  1891, 1  think  the  proposi- 
tion would  have  been  hoary  headed.  I  can  see,  for  instance,  why  you 
regard  it  as  hoary  headed,  because  probably  you  have  not  given  much 
attention  to  that  line,  because  you  start  in  in  the  first  place  not  be- 
lieving in  it,  and  consequently  you  would  not  pay  much  attention  to  it. 

Now,  I  am  trying  to  get  at  the  meat  in  this  situation,  although 
I  do  not  believe  in  it,  I  am  trying  to  get  at  the  meat  of  it. 

Secretary  McAdoo.  Let  me  correct^you  just  there.  I  did  not  refer 
to  subsidies  as  being  hoary  headed,  although  I  think  perhaps  it  would 
not  have  been  an  incorrect  charge. 

Mr.  Greene.  I  thought  that  was  your  statement. 

Secretary  McAdoo.  I  referred  to  the  hoary  dogma  that  American 
ships  could  not  be  operated  profitably  under  our  laws;  that  is  what 
I  was  driving  at.    I  think  it  is  merely  a  dogma  and  a  fear. 

Mr.  Greene.  I  will  agree  with  you  in  this  point:  That  if  our 
yards  could  have  had  the  advantage  of  building  vessels  to  a  large 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      299 

extent,  they  could  have  perfected  them  and  standardized  them  and 
therefore  they  could  build  them  a  great  deal  cheaper.  But  one  great 
difficulty  with  that  is  that  vhile  we  have  the  talent  to  do  it,  while 
we  only  build  a  vessel  at  a  time  we  do  not  enlarge;  but  when  we  do 
enlarge,  why  we  will  accomplish  something. 

Speaking  of  Mr.  Douglas:  Mr.  Douglas  was  formerly  a  member 
of  this  committee  and  served  here  with  a  great  deal  of  abilit}'^;  and 
he  has  alwaj^s,  so  far  as  I  know,  been  actively  engaged  in  the  shipping 
business.  As  I  understood  you,  you  did  not  know  whether  he  was 
correct  in  his  statement,  but  I  should  assume  that  a  man  of  his  stand- 
ing in  the  business  world  would  be  pretty  near  correct  on  anything 
he  stated  in  regard  to  the  merchant  marine,  because  he  has  had  inti- 
mate knowledge  of  it  both  here  and  abroad,  having  made  it  his  busi- 
ness and  gotten  his  living  out  of  shipping. 

Secretary  McAdoo.  I  referred  to  his  one  statement  only,  where  I 
thought  he  might  be  incorrect ;  but  as  to  that,  I  said  I  did  not  know 
whether  he  was  or  not. 

The  Chairman.  He  is  an  exporter,  but  I  do  not  think  he  has  had 
any  experience  in  operating  ship  lines,  Mr.  Greene. 

Mr.  Greene.  Oh,  no ;  not  in  operating  ship  lines. 

Secretary  McAdoo.  Let  me  correct  3^ou  again  only  to  the  extent 
of  making  clear  what  I  said  about  Mr.  Douglas.  He  made  a  state- 
ment, as  I  understood  him,  that  there  was  a  discrimination  in  the 
matter  of  port  charges  and  in  the  treatment  of  American  vessels 
when  they  entered  British  ports.    At  least,  he  said  he  thought  so. 

Mr.  Greene.  I  have  heard  so,  myself. 

Secretary  McAdoo.  I  do  not  think  he  made  it  as  an  absolute  state- 
ment of  fact;  but  he  said  there  was  a  violation  of  our  treaties  if 
that  was  being  done.  I  said  if  that  was  so,  and  I  thought  perhaps 
he  was  incorrect  about  it,  then  the  powers  this  board  could  exercise 
would  enable  them  to  correct  such  practices. 

Mr.  Greene.  You  could  do  that  without  a  shipping  board,  if 
there  was  a  violation  of  a  treaty. 

Secretary  McAdoo.  Certainh^;  but  what  I  mean  is  that  whether 
treaties  are  violated  or  not,  if  there  were  unjust  discriminations,  as 
a  matter  of  fact,  against  our  shipping  in  other  ports,  wherever  they 
may  be,  then  I  think  the  powers  this  board  would  have  would  enable 
them,  through  the  processes  of  retaliation  and  otherwise,  to  compel 
fair  treatment.    We  could  retaliate  against  their  vessels,  if  necessary, 

Mr.  Greene.  I  notice  you  quoted  from  a  speech  of  the  president 
of  the  Southern  Railway  and  you  thought  his  propositions  were  very 
good  in  regard  to  extending  our  foreign  trade  and  that  running 
foreign  vessels  in  connection  with  the  railroads  you  thought  would 
help  to  build  up  a  foreign  trade.  It  would  almost  be  absolutely 
necessary  to  run  them  in  connection  with  the  railroads,  would  it  not, 
to  build  up  a  foreign  trade? 

Secretary  McAdoo.  I  think  it  would  be  very  helpful.  I  think  this 
board  ought  to  have  the  power,  as  the  bill  gives  it,  to  meet  these 
problems  and  deal  with  them  effectively  as  they  are  presented.  The 
extent  to  which  the  board  may  exercise  these  powers  will  be  deter- 
mined by  the  conditions  and  issues  in  the  cases  presented  to  them. 
My  argument,  Mr.  Greene,  is  in  favor  of  giving  a  body  of  this  char- 
acter adequate  power  to  investigate  and  deal  with  these  conditions 
as  they  arise. 


300      SHIPPING  BOARD^  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE. 

Mr.  Greene.  Might  it  not  also  be  an  advantage  to  do  the  same  for 
the  domestic  trade?  The  domestic  trade  is  certainly  more  valuable 
and  more  extensive  than  any  foreign  trade  has  been  or  ever  can  be. 

Secretary  McAuoo.  We  do  regulate  rates  now  for  the  domestic 
trade. 

Mr.  Greene.  I  know — but  not  to  hamper  the  domestic  trade  and  to 
allow  vessels  and  railroads  to  be  interested,  T  mean — whether  or  not 
that  was  an  unwise  proposition  to  separate  the  steamships  from  the 
railroads. 

Secretary  McAdoo.  In  what  respect  ? 

Mr.  Greene.  I  mean  to  say  in  the  Panama  Canal  act,  lines  like  the 
Fall  Kiver  Line  steamers  that  have  been  running  from  my  State  ever 
since  1847  and  with  a  great  deal  of  success,  which  are  owned'  by 
some  stockholders  Avho  also  own  stock  in  the  New  York,  New  Haven 
t<c  Hartford  Eailroad.  I  think  there  is  a  proposition  coming  up — I 
think  the  hearing  is  fixed  for  the  20th  day  of  February — of  allowing 
the  through  delivery  of  merchandise  on  those  steamers,  rather  than 
to  separate  them,  as  provided  in  the  Panama  Canal  act — allowing  the 
Interstate  Commerce  Commission  to  do  that.  What  would  be  your 
view  of  that  ? 

Secretary  McAdoo.  Of  course,  the  question  of  a  violation  of  the 
antitrust  laws  is  the  point  of  your  question.  That  is  a  question  of 
policy  upon  which 

Mr.  Greene.  I  do  not  think  that  question  is  involved  in  this  prop- 
osition. The  question  is  as  to  whether  it  would  be  wise  to  have  the 
Fall  Kiver  Line  steamers,  which  have  been  running  since  1847,  in 
connection  with  the  railroads,  and  which  were  built  for  the  purpose 
of  making  business  for  the  railroad— that  is  what  they  were  built 
for  in  1847,  the  railroad  having  been  started  in  1845,  to  my  knowl- 
edge; I  saw  it  myself,  although  when  I  first  came  here  there  was 
DO  railroad  between  Ohio  and  New  York,  when  I  came  in  there  in 
1844,  and  I  came  by  stage.  The  railroad  was  built  in  1845  and 
opened  the  steamship  line  which  was  the  outgrowth  of  the  building 
of  that  railroad,  they  having  built  the  steamship  line  for  making 
through  traffic  from  Boston,  and  it  has  been  continued  ever  since 
with  great  success,  but  which,  under  the  unwisdom  of  the  Panama 
Canal  act,  was  driven  out  of  business. 

Secretary  McAdoo.  I  am  not  sufficiently  familiar  with  the  specific 
controversy  to  be  able  to  express  an  opinion  on  it.  I  have  not  had 
occasion  to  look  into  it.  But  I  think  you  will  recall  this,  Mr. 
Greene,  that  the  Panama  Canal  act  was  in  large  part  enacted  as  a 
result  of  petitions  and  the  insistance  of  chambers  of  commerce  all 
along  the  Pacific  coast  to  separate  competitive  steamship  lines  from 
competitive  railroad  lines. 

Mr.  Greene.  This  is  not  a  competitive  railroad  line ;  the  New  York, 
New  Haven  &  Hartford  is  not  a  competitive  railroad  line. 

Secretary  McAdoo.  I  understand.  But  that  is  a  question  I  have 
Dot  had  occasion  to  examine  particularly,  I  mean  the  New  Haven's 
position,  so  I  do  not  express  an  opinion  on  it. 

Mr.  Greene.  I  think  it  would  be  a  very  serious  calamity  to  my  own 
State  and,  in  fact,  to  the  whole  railroad  and  steamship  interests  to 
have  that  go  in. 

Mr.  Byrnes.  Mr.  Greene,  pardon  me  a  moment;  did  you  say  you 
saw  that  railroad  started  in  1844? 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      301 

Mr.  Greene.  In  1845. 

Mr.  Byrnes.  You  saw  it  then? 

Mr.  Greene.  I  did,  sir.  I  saw  James  K.  Polk  in  1847  and  I  have 
never  seen  but  one  other  Democratic  President,  and  that  is  Woodrow 
Wilson. 

Secretary  McAdoo.  He  makes  up  for  a  great  deal,  does  he  not? 

Mv.  Greene.  He  has  got  to  fill  up  all  that  vacancy  from  1817  up 
to  this  time,  because  I  never  knew  there  was  a  Democratic  President, 
by  actual  knowledge,  except  James  K.  Polk  and  Woodrow  AVilson. 

Xow,  I  want  to  ask  you  this  question,  as  to  whether  this  provision 
that  you  had  about  this  proposition  that  was  so  attractive  in  the 
speech  of  the  president  of  the  Southern  Railway — whether  that 
would  be  antagonistic  to  the  Panama  Canal  act? 

Secretary  McAdoo.  I  think  not.  I  should  not  think  so,  because  if 
that  was  ever  done  at  all  it  would  be  clone  under  the  regulation  of  the 
Interstate  Commerce  Commission  and  the  shipping  board,  acting 
jointly. 

Mr.  Greene.  Would  not  this  provision  that  the  president  of  the 
Southern  Railway  suggested  be  a  sort  of  a  limited  subsidy ;  that  is, 
it  would  act  as  a  subsidy — act  as  an  advantage? 

Secretary  McAdoo.  To  whom? 

Mr.  Greene.  Given  to  foreign  shipping. 

Secretary  ^McAdoo.  It  would  not  help  foreign  shipping;  it  would 
simply  enable  our  merchants,  manufacturers,  farmers,  and  producers 
to  compete  in  the  open  markets  of  the  world  by  getting  equal  freight 
rates  with  their  competitors — or  perhaps  better  freight  rates  than 
their  competitors — when  they  can  not  compete  at  all  noAv.  It  is  an 
economic  question  for  you  gentlemen  to  consider,  whether  or  not  we 
ought  to  adopt  the  policy  of  putting  our  merchants,  farmers,  pro- 
ducers, and  manufacturers  in  a  position  to  compete  in  the  open 
markets  of  the  world  through  transportation  facilities  equal,  at  least, 
to  those  of  their  foreign  rivals.  And,  by  the  way,  Mr.  Greene,  Mr. 
Harrison  did  not  suggest  this  provision  in  the  bill. 

Mr.  Greene.  Oh,  no. 

Secretary  McAdoo.  He  hapjiened  to  make  this  speech  of  which  I 
knew  nothing  until  it  was  published  in  the  papers;  and  just  because 
it  was  the  view  of  a  man  who  has  ideas  about  such  matters,  I  pre- 
sented it  to  the  committee  for  what  it  is  worth. 

The  CiiAiRjiAN.  That  provision  was  in  the  bill  long  before  he 
made  the  speech? 

Secretary  McAdoo.  Oh,  yes. 

Mr.  Greene.  I  notice  the  chairman  suggested  that  he  had  had 
some  communications  from  Seattle  about  wanting  to  regulate  their 
terminals,  and  so  on.  Would  you  make  this  bill  cover  every  complaint 
that  everybody  made  and  get  up  a  bill  that  will  take  up  all  of  the 
complaints  of  everybody  in  regard  to  shipping  throughout  the 
country  ? 

Secretary  McAdoo.  I  think  this  board  ought  to  have  the  power, 
of  course,  to  investigate  complaints. 

Mr.  Greene.  Oh,  no;  I  mean  the  bill — preparing  the  bill  and 
making  a  specific  attempt  to  cover  those  complaints  bv  the  bill 
itself? 

32910—16 20 


302      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Secretary  McAdoo.  I  think  the  bill  itself,  as  drawn,  gives  this 
shipping  board  power  to  investigate  complaints  of  that  character 
now. 

Mr.  Greene.  But  these  people  who,  for  instance,  are  dissatisfied 
with  conditions  and  write  to  the  chairman;  what  do  yon  think  of 
having  this  bill  amended  to  cover  those  specific  complaints — or  would 
you  leave  that  to  the  shipping  board? 

Secretary  McAdoo.  I  think  the  bill  gives  the  shipping  board  suf- 
ficient power  to  consider  complaints  of  that  character;  if  it  does  not, 
it  should  be  amended  so  as  to  give  it  that  power.  There  ought  to  be 
a  forum  to  which  the  people  of  the  countr}^,  farmers,  shippers,  and 
merchants,  may  resort  for  the  purpose  of  having  important  matters 
affecting  shipping  and  foreign  commerce  investigated  and  deter- 
mined. 

The  Chairman.  If  j^ou  will  pardon  the  suggestion,  Mr.  Greene, 
this  bill  gives  the  shipping  board  the  same  power  in  reference  to 
water-borne  commerce  that  is  now  exercised  by  the  Interstate  Com- 
merce Commission  in  reference  to  our  railroad  commerce. 

Mr.  Greene.  I  like  the  idea  of  the  Federal  Keserve  Board,  too. 
The  banks  thought  at  first  they  would  not  come  in.  but  they  had  to  or 
else  go  out  of  business.  Now,  we  do  not  want,  to  put  shippers  in  this 
position  who  have  been  struggling  to  build  up  a  shipping  trade  and 
who  have  done  so — we  do  not  want  to  put  them  out  of  business. 

Secretary  McAdoo.  Oh,  no;  the  bill  Avill  not  do  that.  I  think  it 
will  do  just  the  reverse. 

Mr.  Greene.  I  am  glad  you  think  so. 

The  Chairman.  The  shippers  are  in  favor  of  that  section  of  the 
bill,  and  the  Chamber  of  Commerce  of  the  United  States  gives  that 
its  unqualified  approval. 

Mr.  Greene.  I  do  not  happen  to  be  a  member  of  that  body, 
although  I  was  a  delegate  at  its  last  session  and  listened  to  every- 
thing I  could.  I  know  my  friend  Hardy  has  always  been  a  very 
strong  advocate  of  having  foreign-built  ships  used  in  the  coastwise 
trade  of  the  United  States,  and  I  think  you  have  suggested  that. 
Did  3^011  know  at  the  time  that  that  question  of  granting  American 
registry  to  those  foreign-built  ships  was  being  considered  there  was 
a  proposition  brought  up  in  the  conference  on  that  bill  whereby  there 
was  an  attempt  to  allow  those  foreign-built  ships  to  enter  our  coast- 
wise trade? 

Secretary  McAdoo.  I  did  not  suggest  it;  no,  sir. 

Mr.  Greene.  You  did  not  ? 

Secretary  McAdoo.  No,  sir. 

The  Chairman.  I  want  to  say  this,  if  that  conference  report  had 
been  adopted  by  Congress  it  would  have  been  worth  more  to  our 
American  merchant  marine  than  any  legislation  since  the  foundation 
of  the  Government;  but  the  shipping  trust  did  their  best  to  defeat 
it,  because  it  was  against  their  own  interests. 

Mr.  Greene.  I  am  not  concerned  in  the  shipping  trust  in  an}?^  way 
on  earth,  and  I  did  all  I  could  to  defeat  it.  And  I  am  not  interested 
and  have  never  owned  a  ship  or  stock  in  a  vessel  in  my  life  and  am 
not  in  any  wa}^  concerned  in  the  shipping  trust;  but  at  the  conference 
I  did  all  in  my  power  to  defeat  it. 

The  Chairman.  Yes;  you  were  a  member  of  that  conference  com- 
mittee and  so  was  I  and,  if  j^ou  recall,  I  was  the  one  that  suggested 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.   303 

what  was  done;  because  the  bill,  as  it  passed  the  Senate,  provided 
that  these  foreign-built  ships  might  be  used  in  the  inter-coastal  trade. 
We  agreed  that  that  would  be  unconstitutional,  and  to  avoid  that  con- 
dition, in  the  conference  committee  we  agreed  that  foreign-built 
ships,  if  they  applied  for  American  registr}^,  that  is,  were  owned  by 
American  citizens,  and  if  application  was  made  for  American  reg- 
istry within  two  years  after  the  passage  of  the  act,  might  be  ad- 
mitted and  utilized  in  the  domestic  as  well  as  the  foreign  trade. 

Mr.  Greek E.  I  got  my  information  as  to  the  disaster  in  that 
proposition  from  a  very  prominent  Democrat,  then  a  Member  of  the 
House  and  now  holding  a  very  h'gh  appointment  under  President 
Wilson,  Avho  met  me  that  very  day  and  gave  me  the  greatest  basis 
that  I  could  possibly  have  for  making  opposition  to  that  act. 

The  Chairman.  I  will  say  this,  that  it  had  no  foundation  in  fact; 
I  do  not  care  who  he  was. 

Mr.  Greene.  I  know  the  proposition  went  through  the  committee, 
but  it  failed  in  the  Senate  by  a  vote  of  2  to  1. 

The  Chairman.  Yes;  and  it  had  the  support  of  Senator  Borah,  of 
Idaho,  who  was  a  member  of  the  conference  committee. 

(After  discussion.) 

Proceed,  Mr.  Secretary. 

Mr.  Greene.  I  am  not  quite  through  with  my  questions  yet.  In 
the  construction  of  those  vessels  under  subsidy  we  intended  to  con- 
jtruct  approximately  1,000,000  tons  with  that  subsidy  of  $5,000,000 
a  year;  w^e  proposed  to  build  up  at  least  1,000,000  tons  of  shipping, 
and  that  that  would  give  the  foundation.  We  did  not  propose  to 
build  $5,000,000  worth  of  vessels  with  that  subsidy;  we  proposed  to 
take  men  who  were  skilled  in  the  shipping  industry  and  who  were 
interested  in  the  shipping  industry,  possibly  owned  ships  in  the  ship- 
ping industry,  and  this  subsidy  was  to  aid  them  to  overcome  the 
advantages  which  foreign  shipping  and  foreign  shipowners  obtained 
from  their  Governments,  and  to  enable  them  to  capture  not, only  our 
mail  facilities,  but  everything  else.  It  was  with  the  purpose  of  try- 
ing to  overcome  that.  Now,  it  seems  to  me  that  was  a  very  much  dif- 
ferent proposition  than  to  imagine  we  could  build  15  or  16  vessels. 
We  expected  to  get  at  least  1.000,000  tons  out  of  it  and  probably 
would  have  done  it  by  that  assistance. 

Secretary  McAdoo.  I  have  no  means  of  knowing  whether  that 
would  have  happened  or  not,  because  I  am  not  familiar  with  the  bill 
you  speak  of. 

Mr.  Greene.  We  do  not  know  that  this  is  going  to  happen,  but  you 
have  a  very  clear  idea  of  what  you  think. 

Secretary  McAdoo.  I  know  this,  Mr.  Greene,  that  if  3^011  try  sub- 
sidy there  is  no  assurance  that  you  will  get  specific  results.  You 
may  hope  to  get  them,  but  as  far  as  I  am  concerned  I  think  it  is 
very  much  better  for  the  American  people  to  use  the  amount  of 
money  that  would  be  given  to  private  shipowners  as  subsidies  in  the 
construction  of  needed  naA'al  auxiliaries — vessels  which  w^ould  be 
owned  by  the  American  people  and  used  for  their  protection  in  case 
of  war  and  for  the  building  up  of  their  commerce  in  time  of  peace. 
A  subsidy  is  simply  a  grant  of  bonuses  from  the  Treasury;  it  is  a 
premium  on  inefficiency.  P)Ut  with  $50,000,000  given  to  the  shipping 
board  it  can  actually  build  vessels  for  specific  needs.  We  know  that 
the  exercise  of  thait  power  will  produce  certain  results;  we  know 


304      SHIPPING  BOARD,  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

that  the  board  can  and  will  build  ships  with  that  mone}^  which  will 
constitute  suitable  and  needed  naval  auxiliaries  and  be  available  for 
the  foreign  trade  of  the  United  States.  This  plan  assures  a  very 
definite  and  concrete  result  as  against  a  merely  speculative  result 
if  we  offer  subsidies. 

Mr.  Greene.  You  would  not  anticipate  this  will  be  limited  to 
$50,000,000,  would  you  ?    _ 

Secretary  McAdoo.  It  is  certainly  limited  to  $50,000,000  so  far 
as  the  authoritji^  of  this  board  to  construct  vessels  is  concerned.  As 
I  have  already  explained,  I  think  that  this  board  can  demonstrate 
that  a  type  of  vessel  can  be  built  wdiich  wdll  be  so  economical  in 
operation— and  I  am  speaking  particularly  with  reference  to  cargo 
units,  which  are  the  most  important  things  for  our  commerce — that 
American  capital  will  be  encouraged  to  engage  more  largely  in 
shipping  enterprises,  with  advantage  to  itself  and  to  the  commerce 
of  the  country.  Aside  from  the  fleet  of  vessels  the  $50,000,000  will 
provide  the  stimulus  to  shipping  enterprises  should  be  great. 

Mr.  Greene.  There  is  one  other  question  I  Avculd  like  to  ask.  AAliy 
are  these  vessels  that  you  might  lease  or  buy  privileged  to  engage  in 
the  Porto  Eican  trade?  It  is  now  in  the  coastwise  trade,  and  why 
should  that  be  allowed? 

Secretary  McAdoo.  Vessels  built,  as  the  bill  provides,  in  our  own 
shipyards? 

Mr.  Greene.  No  ;  not  United  States  vessels ;  that  is,  foreign-built 
vessels.  Does  not  this  bill  provide  that  in  the  Porto  Rican  trade  you 
can  use  these  vessels  you  happen  to  buy,  from  whatever  source  you 
happen  to  buy  them  ? 

Secretary  McAdoo.  Yes;  that  is  true.  The  reason  for  that  is 
that  the  service  to  our  outlying  possessions  is  very  poor  and  in- 
adequate. Governor  Yaeger,  of  Porto  Rico,  called  on  me  not  long 
ago  and  explained -the  imperative  need  of  increased  shipping  facili- 
ties for  Porto  Eico.  I  think  that  vessels  of  this  character  operating, 
for  instance,  to  South  America  ought  certainly  to  be  permitted  to 
touch  at  Porto  Eico  on  tiie  way  down  and  back.  I  think  it  will  be 
of  immense  value  to  this  country  to  build  up  its  commercial  interests 
with  Porto  Eico  and  to  strengthen  our  influence  and  hold  upon  that 
island,  which  is  one  of  our  very  important  possessions.  I  do  not  see 
any  reason  why  these  vessels  should  not  be  permitted  to  touch  at  the 
ports  of  our  outlying  possessions,  and  I  can  see  advantage  in  every 
way  if  that  is  done. 

Mr.  Greene.  Of  course,  that  would  affect  the  coastwise  trade,  and 
that  will  be  rather  hoary-headed,  having  lasted  since  1879.  It  is 
quite  a  long  time  that  that  has  been  established  Avithout  attack. 

Secretary  McAdoo.  The  more  we  can  develop  and  build  up  Porto 
Eico — and  that  rests  primarily  upon  transportation  now — the  more 
the  coastwise  trade  will  benefit  as  a  result  of  it.  The  industries  of 
Porto  Eico  and  her  productive  capacity  have  been  very  much  limited, 
Gov.  Yeager  tells  me,  by  lack  of  ocean  transportation. 

Mr.  Greene.  That  is  all. 

Secretary  McAdoo.  I  think  I  sent  you,  Mr.  Chairman,  a  resolution 
from  the  Chamber  of  Commerce  of  San  Juan,  P.  E.,  on  this  very 
subject  of  shipping  facilities. 

The  Chairman.  Yes ;  I  put  it  in  the  record. 


Sllll'PING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      305 

Mr.  Saunders.  Mr.  Secretary,  how  are  the  expenses  of  the  com- 
mission that  is  created  here  to  be  paid?  Are  they  to  be  paid  from 
the  profits  of  operating  these  ships  or  out  of  the  Treasury? 

Secretary  jNIcAdoo.  My  idea  is  that  the  commission's  expenses 
ought,  like^ other  Government  boards,  to  be  paid  from  the  Treasury. 

Mr.  Saunders.  I  could  not  find  that  very  clearly  from  the  bill; 
it  rather  appeared  to  me  that  would  follow,  but  it  does  not  appear 
from  the  bill. 

Secretary  McAdoo.  I  think  the  bill  ought  to  be  amended  so  as  to 
provide  it,  if  there  is  any  doubt  about  it. 

Mr.  Saunders.  That  expense  would  approximate,  I  suppose,  some- 
thing like  $75,000  or  $100,000  a  year;  that  would  be  borne  by  the 
general  trade? 

Secretary  McAdoo.  I  think  it  ought  to  be  borne  by  the  Government, 
like  any  other  Government  board  or  commission. 

Mr.  Saunders.  This  corporation  that  is  to  be  created,  with  the 
machinery  that  goes  along  with  that,  and  with  the  salaries.  Those 
expenses  would  be  paid  how? 

Secretary  McAdoo.  Of  the  corporation? 

Mr.  Saunders.  Yes;  paid  from  the  operation  of  the  ships  that 
they  would  run? 

Secretary  McAdoo.  Yes;  from  the  operations  of  the  ships. 
Mr.  Saunders.  Or  from  the  general  trade? 

Secretary  McAdoo.  They  would  be  paid,  of  course,  from  the  op- 
erations of  the  ships. 

Mr.  Saunders.  Let  me  see  if  I  understand  how  this  shipping  would 
be  utilized.  When  the  Government  issues  these  bonds,  there  would 
be  fifty  millions  of  them  covering  whatever  rate  of  interest  is  pre- 
scribed, which  of  course  the  Government  will  have  to  meet,  and  it 
will  have  $50,000,000  worth  of  miscellaneous  ships.  Now,  looking 
at  those  ships  the  same  as  you  would  if  you  were  a  private  capitalist 
owning  them,  how  much  in  the  way  of  lease  would  you  have  to  derive 
from  those  ships  in  order  to  protect  your  capital  or  your  investment? 
Secretary  McAdoo.  If  you  leased  them  all,  if  you  leased  the  en- 
tire number  of  ships,  assuming  that  the  bonds  bore  3  per  cent  inter- 
est, you  would  have  to  charge  3  per  cent  to  cover  the  interest  on  the 
bonds,  and  it  is  then  a  question  of  how  much  the  board  will  ask  for 
depreciation. 

Mr.  Saunders.  I  am  having  that  in  mind. 

Secretary  McAdoo.  The  usual  allowance  I  think  in  the  merchant 
marine  is  5  per  cent  for  depreciation.  Am  I  right  about  that,  Capt. 
Bertholf? 

Capt.  Bertholf.  Four  or  five  per  cent. 

Secretary  McAdoo.  The  different  steamship  companies  determine 
that. 

Mr.  Saunders.  How  much  would  you  carry  against  the  loss  of  the 
ship  or  ships?     Five  per  cent  would  not  cover  that? 

Secretary  McAdoo.  No.  I  think  that  insurance  would,  of  course, 
be  required  by  the  board.  The  ships  would  have  to  be  insured  at 
whatever  that  cost  would  be. 

Mr.  Saunders.  I  just  want  to  know,  having  reference  expressly 
to  the  business  world,  some  reasonably  approximate  sum  that  would 
cover  all  of  that. 


306      SHIPPING  BOAKD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Secretary  McAdoo.  I  think  that  4  or  5  per  cent  for  depreciation 
would  be  sufficient.  But  I  am  not  really  familiar  with  marine  in- 
surance rates,  as  to  how  much,  in  normal  times,  would  be  sufficient. 
1  would  not  think  it  would  be  a  large  amount;  perhaps  1  per  cent. 

Mr,  Greene.  Oh,  more  than  that. 

The  Chairman.  How  much? 

Secretary  Mcxicoo.  About  1  per  cent,  I  think, 

Mr.  Greene,  It  would  run  nearer  10  per  cent  instead  of  1. 

Secretary  McAdoo.  Ten  per  cent  for  marine  insurance? 

Mr.  Greene.  Yes.    I  have  been  in  the  insurance  business  since  1878. 

Secretary  McAdoo.  Marine  insurance? 

Mr.  Greene.  Yes. 

Secretary  McAdoo.  I  think  you  are  mistaken,  Mr,  Greene. 

Mr.  Hardy.  I  have  investigated  that,  and  I  think  it  would  be  5 
per  cent. 

Secretary  McAdoo,  I  may  be  wrong  about  that. 

Mr.  Greene,  Say  8  per  cent,  then, 

Mr.  Saunders.  Five  per  cent  for  depreciation  and  3  per  cent  to 
cover  interest  on  bonds;  that  would  be  16  per  cent  on  the  $50,000,000, 
as  a  business  proposition,  that  you  would  have  to  lease  those  ships 
for. 

Secretary  McAdoo,  Not  at  all,  Mr.  Saunders.  The  insurance,  of 
course,  would  have  to  be  borne  by  the  shipowner  or  the  ship  opera- 
tor. No  matter  whether  he  leased  or  bought  the  ship,  he  would  have 
to  pay  it.  The  depreciation  cost,  however,  is  set  aside  anyway.  Now, 
if  the  Government  was  only  trying  to  get  out  even  on  a  lease,  it  could 
do  that  by  having  an  amount  of  rental  that  would  be  equivalent  to 

3  per  cent  on  those  bonds,  on  the  cost  of  the  ship — the  bonds  issued 
against  the  ship. 

Mr.  Saunders.  That  is  the  question  I  propounded.  Would  the 
Government,  having  in  mind  $50,000,000  worth  of  ships  and  that 
$50,000,000  worth  of  bonds — what  rental  on  that  investment  would 
it  have  to  charge  in  order  to  make  itself  secure  to  provide  against 
loss  and  to  provide  against  depreciation  and  to  create  a  fund  for  the 
return  of  those  ships  in  time? 

Secretary  McAdoo.  I  think  if  the  bonds  bore  3  per  cent  the  basis 
of  the  lease  ought  to  be  at  least  3  per  cent  for  the  Government  to 
break  even.     Then  there  should  be  a  provision  in  the  lease  for,  say, 

4  or  5  per  cent  for  depreciation,  whatever  this  board  may  think  suf- 
ficient; and  then,  of  course,  the  lessees  of  the  vessel  would  be  re- 
quired to  keep  the  vessel  insured  at  whatever  rate  that  might  be, 

Mr,  Saunders,  That  would  have  to  be  included  as  part  of  the 
arrangement  with  the  Government? 

Secretary  McAdoo.  That  would  have  to  be  included  as  a  part  of 
the  arrangement  with  the  Government ;  yes. 

Mr.  Saunders,  And  by  the  time  he  has  done  that,  would  not  this 
lessee  be  leasing  those  Government  ships  at  practically  the  same  cost 
that  it  would  be  to  lease  any  other  ships? 

Secretary  McAdoo,  That  is  possible, 

Mr,  Saunders,  Wouldn't  it  be? 

Secretary  McAdoo,  Not  necessarily.  I  think  that  he  would  prob- 
ably have  to  pay  more  to  private  constructors  of  vessels,  because 
they  in  turn  might  have  to  pay  a  higher  rate  of  interest.     The  Gov- 


SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      307 

ernment's  credit  would  enable  him  probably  to  get  an  advantage 
there. 

Mr.  Saunders.  The  difference  would  only  be  with  respect  to  the 
interest  on  the  main  capital? 

Secretary  McAdoo.  Mainly  so. 

Mr.  Saunders.  Practically,  then,  there  would  not  be  much  differ- 
ence between  the  average  man  who  wanted  to  go  into  the  shipping 
business  and  Avanted  to  lease  a  ship  for  tramp  purposes  in  leasing 
that  ship  from  this  other  owner  of  the  ship,  or  leasing  from  the 
Government;  there  would  be  no  great  difference?  I  have  in  mind, 
of  course,  the  difference  in  the  interest  on  the  $50,000,000. 

Secretary  McAdoo.  The  advantage  to  the  Government  is  this, 
primariW  it  creates  needed  vessels  for  naval  reserve  purposes. 

Mr.  Saunders.  I  had  that  in  mind. 

Secretary  McAdoo.  It  is  a  very  important  point  and  I  w-ould  like 
to  reimpress  it  so  that  it  can  be  kept  in  mind,  that  we  do  create,  by 
this  means  a  percentage  of  etlicient  naval  auxiliaries  which  are  indis- 
pensable for  the  Xavy.  And  we  also,  by  this  means,  create  a  part  of 
the  naval-reserve  personnel,  which  is  very  essential  to  the  Navy. 
Now,  that  being  accomplished  as  the  primary  purpose,  then  incident- 
ally we  can  use  these  ships  in  commerce  with  the  advantage  to  the 
business  of  the  country. 

Mr.  Saunders.  I  do  not  lose  sight  at  all  of  those  factors;  but  I  was 
just  looking  at  it  now  on  the  commercial  side  and  endeavoring  to 
find  out,  on  the  commercial  side  of  this  operation,  what  the  Govern- 
ment, as  a  business  man,  so  to  speak,  would  have  to  charge  in  the  way 
of  leases  for  its  shijis.  And  I  believe  except  for  this  difference  be- 
tween the  interest  carried  on  the  $50,000,000  it  is  about  agreed  that 
the  factors  would  be  about  the  same  and  the  charges  would  not  be 
essentially  different. 

Secretary  McAdoo.  I  think  the  difference  would  be  chiefly  in  the 
interest  rate  on  the  original  cost  of  investment,  whatever  that  may  be. 

Mr.  Saunders.  And  having  that  in  mind,  what  would  be  the  in- 
ducement to  a  man  who  simply  wishes  to  go  into  a  maritime  enter- 
prise to  rent  his  ships  froui  the  Government?  Of  course,  the  im- 
pression has  been  created  that  capital  is  just  contumaciously  refusing 
to  go  into  the  deep-seas  trade.  I  take  it  that  capital  is  just  as  willing 
to  make  money  in  the  deep-seas  trade  as  in  any  other  business,  and 
capital  will  only  take  hold  of  a  Government  ship  with  a  view  to 
operating  it  as  a  tramp  or  as  part  of  an  established  line  and  with 
the  idea  that  it  will  be  remunerative  as  a  going  business;  and  now, 
so  far  as  we  have  gone,  what  is  there  that  would  induce  a  man  seeking 
to  operate  a  tramp  ship  on  the  high  seas  to  lease  from  the  Govern- 
ment as  against  leasing  from  another  owner? 

Secretary  McAdoo.  The  chance  is  that  he  would  be  able  to  get  his 
ship  a  little  cheaper  on  account  of  the  difference  in  the  interest  rate, 
and  get  the  best  type  of  vessel  and  get  it  quickly. 

Mr.  Saunders.  Is  that  all  you  can  figure  out  that  will  operate  'as 
an  inducement? 

Secretary  JNIcAdoo.  I  think  chiefly  that,  so  far  as  actual  results  go. 

Mr.  Saunders.  Do  you  think  that  would  be  sufficient  to  overcome 
what  are  supposed  to  be  handicaps  against  American  capital  taking 
up  this  business? 


308       SHIPPING  BOARD,  JST AVAL  AUXILIAEY,  AND  MERCHANT  MARINE. 

Secretary  McAdoo.  No;  I  do  not. 

Mr.  Saunders.  What  would  be  enough,  then,  to  make  capital  take 
•up  this  business?  If  that  difference  in  the  interest  rate  is  not  suffi- 
cient to  overcome  the  handicap,  what  else  is  there  on  the  business 
side  that  would  overcome  that  handicap? 

Secretary  McAdoo.  I  do  not  believe  that  there  is  any  handicap. 
As  I  have  said  before,  Mr.  Saunders,  I  think  that  capital  has  not  gone 
into  American  shipping  because  it  has  been  able  to  employ  itself  in 
other  directions  more  profitably  than  in  the  shipping  field;  and  its 
attention  has  not  been  directed  so  much  to  shipping  enterprises  for 
that  reason.  We  have  had  a  rapidly  developing  country  and  there 
have  been  greater  and  more  attractive  opportunities  for  capital  in 
other  directions.  But  I  think  the  time  is  coming,  if  it  is  not  here  now, 
when  the  expansion  of  the  foreign  trade,  the  need  and  the  importance 
of  our  foreign  commerce,  is  going  to  be  so  imperative  that  interest  is 
going  to  be  stimulated  in  shipping  enterprises.  By  building  these 
ships  as  naval  auxiliaries  the  Government  can  contribute  several 
hundred  thousand  tons  for  commercial  purposes  by  leasing  or  selling 
these  ships  or  operating  them  through  a  corporation,  as  I  have  de- 
scribed; and  to  that  extent  this  naval  auxiliary  will  be  a  decided  help 
to  our  commerce.  At  the  same  time  this  board  can,  I  believe,  demon- 
strate conclusively  to  capital  a  fact  which  I  think  has  deterred  Ameri- 
can capital  from  engaging  in  the  shipping  business  heretofore,  viz : 
That  a  type  of  vessel  can  be  produced  in  this  country  which  can  be 
operated  at  a  profit  wath  American  labor.  With  that  demonstration, 
and  especiall}^  with  the  other  provisions  in  this  bill — the  other  favor- 
able factors  in  the  bill — I  think  it  will  tend  to  encourage  the  invest- 
ment of  private  capital  in  American  merchant  vessels. 

Mr.  Saunders.  I  believe  you  used  the  figure  that  just  as  the  Gov- 
ernment had  to  show  the  farmers  how  to  dip  their  ox  so  as  to  kill  the 
tick,  that  the  Government  now  would  have  to  show  the  ship  people 
how  to  operate  on  the  high  seas  so  as  to  make  a  profit  in  that  venture. 
Don't  you  think  the  difference  in  that  is  that  in  the  other  instance  the 
Government  knew  a  great  deal  more  about  the  scientific  way  to  deal 
with  ticks  than  the  farmers  did;  and  that  in  this  particular  instance 
the  shipping  world  and  the  capital  of  the  United  States  know  fully 
as  much  about  the  opportunities  of  profit  in  the  operation  of  mer- 
chant ships  as  the  United  States  Government  does? 

Secretary  McAdoo.  I  am  not  sure  of  that,  Mr.  Saunders.  I  have 
an  idea  that  private  capital  thus  far  has  not  been  willing  to  embark 
upon  certain  experiments  which  I  think  the  Government  could  make 
very  successfully.    And  I  think  that  through  that  means 

Mr.  Saunders.  In  order  to  do  that,  though,  it  would  have  to  op- 
erate those  ships  as  a  Government  proposition  ?  I  understood  you,  in 
the  early  portion  of  your  testimony,  to  say  you  did  not  think  the 
Government  w^ould  have  to  operate  those  ships  as  a  Government 
proposition. 

Secretary  McAdoo.  I  do  not  think  it  is  necessary  for  the  Govern- 
ment to  operate  them.  I  think  it  can  lease  or  sell  them  and  demon- 
strate by  that  means.    It  comes  back  very  largely  to  the  type  of  vessel. 

Mr.  Saunders.  You  also  w^ere  asked  if  you  did  not  think  that  the 
question  of  trouble  w^ould  be  presented  if  the  Government  did  so 
operate  these  ships  through  the  shipping  board,  owming  all  of  the 
stock — I  mean  through  a  corporation  owning  all  the  stock  in  it — 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.       309 

should  these  ships  be  taken  up  in  time  of  war  by  a  foreign  country 
and  taken  into  a  prize  court,  and  you  said  you  did  not  think  any 
difficulty  would  lie  along  that  line.  Now,  precisely  that  question  was 
put  by  me  to  Admiral  Benson  on  yesterday  and  he  stated  a  very 
delicate  question  indeed  would  be  presented. 

Secretary  McAdoo.  The  admiral  ma}-  think  so,  but  I  think  inter- 
national law  will  sustain  the  position  I  take. 

Mr.  Saunders.  I  propounded  that  question  to  him,  and  he  said 
a  very  delicate  question  would  be  presented,  because  I  pushed  that 
question  upon  him.  I  said,  "  Suppose,  noAv,  the  operation  of  these 
ships  by  this  corporation  and  the  Government  owning  the  stock  in 
the  ships,  would  not  that  question  you  speak  of  come  strongly  to  the 
fore  ?  "  and  he  said  it  would. 

Secretary  McAdoo.  Did  not  Admiral  Benson  say  that  that  might 
be  so  unless  the  Government  divested  itself  of  any  attribute  of 
sovereignty  in  respect  to  the  ships? 

Mr.  Saunders.  I  do  not  remember  Admiral  Benson  making  any 
such  distinction  as  that,  because  the  very  moment  he  spoke  of  the 
possibility  of  a  delicate  situation  being  presented  I  put  it  up  to  him 
in  this  way :  I  said.  "  Take  the  case  in  which  the  Government  owns 
all  of  the  stock  of  the  corporation  operating  these  vessels,  would 
not  that  question  you  speak  of  come  strongly  to  the  fore?  "  And  his 
answer  was  in  the  affirmative.  But,  of  course,  that  is  a  matter  of 
difference  of  opinion. 

Secretary  McAdoo.  The  section  of  the  bill  that  I  read  a  short  time 
ago  clearly  divests  the  Government  of  any  peculiar  sovereignty  over 
these  ships  and  specifically  provides  they  shall  be  treated  like  any 
other  merchant  vessels  under  our  flag.  I  have  great  respect  for  Ad- 
miral Benson  as  a  naval  officer  and  for  his  opinion  on  naval  questions, 
but  I  do  not  know  whether  he  is  familiar  with  the  international  law 
of  this  subject.  It  is  a  question  of  international  law  that  can  be 
easily  settled  by  an  examination  of  the  authorities. 

Mr.  Saunders.  As  a  lawyer,  in  that  connection  I  say  I  think  Ad- 
miral Benson  looked  at  it  as  a  practical  proposition.  Now,  I  thor- 
oughly agree  when  you  create  this  fiction  here,  that  the  entity  is  not 
the  Government,  technically  speaking.  On  the  other  hand,  substan- 
tially it  is,  when  the  Government  creates  this  corporation  and  owns 
all  the  stock  in  it,  controls  it,  and  directs  it — that  ship  is,  for  sub- 
stantial purposes,  a  Government  ship.  And  I  think  the  admiral  had 
in  mind  that  when  such  a  ship  as  that  was  taken  the  United  States 
without  drawing  those  nice  distinctions  you  speak  of  arising  out  of 
fictions  of  law — creations  of  law — would  just  have  in  mind :  Here  is 
some  belligerent  who  has  grabbed  one  of  our  ships,  and  there  would 
be  one  of  those  excitements  and  flames  that  arise  out  of  a  situation 
of  that  sort. 

In  the  operation  of  those  ships  by  this  corporation  it  is  contem- 
plated, is  it  not,  that  they  shall  be  operated  to  those  points  where  the 
opportunities  for  profit  are  not  so  encouraging  as  to  induce  private 
capital  to  go  in? 

Secretary  McAdoo.  I  think  that  is  a  question  for  the  shipping 
board  to  decide. 

Mr.  Saunders.  Yes,  but  that  was  one  of  the  illustrations  used,  that 
we  would  establish,  for  instance,  between  here  and  South  America, 
steamship  lines  with  a  view  to  building  up  trade. 


310      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Secretary  McAdoo.  I  am  expressing  only  my  own  ideas.  Of 
course,  the  board  would  have  to  determine  those  questions  in  the  light 
of  facts  and  would  certainly  investigate  each  case  and  settle  it  on  its 
merits.  My  point  is  that  the  board  should  have  this  power  in  order 
to  protect  the  public  interest  in  two  ways:  First,  as  against  those 
who  would,  unless  the  board  had  this  power,  be  able  to  impose  or  fix 
their  own  terms  for  the  lease  or  purchase  of  these  vessels,  since  the 
Government  could  not  use  them  in  anj?^  other  way;  and,  second,  be- 
cause it  is  vital  to  the  general  interests  of  the  country  as  well  as  to 
the  commerce  of  the  country  that  lines  shall  be  established  to  some 
parts  of  the  world  where  private  capital  will  not  enter  but  where  the 
board  could  enter  if  necessary. 

Mr.  Saunders.  Was  not  that  really  one  of  the  prime  motives  of 
this  bill,  to  enable  lines  to  be  established  between  points  in  this 
country  and  other  countries,  notably  South  America,  where  they 
would  have  to  be  run  at  a  loss  for  a  while? 

Secretary  McAdoo.  Not  necessarily. 

Mr.  Saunders.  That  was  pointed  out  by  President  "Wilson  in  his 
message.  That  is  precisely  what  he  suggested,  that  they  would  be 
able  to  build  up  trade  between  points  where  we  have  no  present  hope 
of  gain;  but  after  they  have  run  for  a  while  and  developed  that  a 
profitable  traffic  could  be  maintained,  that  the  Government  should 
then  withdraw. 

Secretary  McAdoo.  The  President  suggested  some  such  idea  in  his 
message. 

Mr.  Saunders-  That  is  precisely  what  he  did  suggest. 

Secretary  IiIcAdoo.  I  think  he  did  suggest  that.  I  don't  recall  his 
exact  language. 

Mr.  Saunders.  As  one  of  the  main  things  in  view. 

Secretary  McAdoo.  He  said  that  could  be  done.  I  do  not  think 
he  stressed  that  as  the  only  reason  for  the  passage  of  the  bill. 

Mr.  Saunders.  Here  is  what  the  President  said  in  that  connection : 

The  Government  must  open  wide  the  doors  of  trade,  must  open  them  hefore 
it  is  altofrether  profitahle  for  them  to  open  them,  or  altogether  reasonable  to 
ask  private  capital  to  open  them  as  a  venture;  it  should  take  action  to  make 
certain  that  transportation  at  reasonable  rates  should  be  provided,  and  when 
the  carriage  has  become  sufficiently  profitable  to  attract  private  capital  to  engage 
in  it  the  agencies  of  the  Government  ought  to  withdraw. 

Now,  that  is  the  thought  I  had  in  mind  in  the  question  I  asked 
and  here  is  what  I  was  coming  to  in  that  connection:  That  that  idea 
being  in  the  President's  mind — and,  as  I  have  always  understood  in 
connection  with  this  bill,  one  of  the  chief  purposes  of  it  was  to  estab- 
lish just  such  trade  opportunities  as  have  been  suggested  in  the 
message — that  that  operation  would  necessarily  have  to  be  done  by 
the  Government. 

Secretary  McAdoo.  Certainly  the  bill  contemplates  such  a  possi- 
bility, Mr.*^  Saunders.  But  it  does  not  necessarily  follow  that  it 
would  have  to  occur ;  the  power  is  there. 

Mr.  Saunders.  I  think  we  have  always  very  thoroughly  understood 
that  the  difficulty  in  our  establishing  lines  between  this  country  and 
South  America  was  that  the  prospect  of  profit  would  not  induce 
private  capital  to  do  it  and  that  that  field  there  was  so  great  that 
it  ought  to  be  done,  and  that  therefore  the  Government  should  come 
in  and  do  it.    I  think  that  has  always  been  understood. 


SHIPPING  BOAED,  NAVAL  AUXILIARY^  AND  MEECHANT  MAEINE.      311 

Secretary  McAdoo.  I  think  that  is  a  persuasive  reason;  bilt  if  I 
were  a  member  of  the  board  I  should  certainly  investigate  very 
carefully. 

Mr.  Saunders.  Having  in  mind  that  those  lines  are  to  be  estab- 
lished if  Ave  want  to  build  up  a  trade  to  South  America,  I  ask  if  it 
is  not  inevitable,  in  connection  with  that  enterprise,  that  it  would 
have  to  be  done  exclusiveh"  by  the  Government  ? 

Secretary  IMcAdoo.  I  say  that  might  follow;  I  do  not  think  it 
inevitably  follows. 

Mr.  Saunders.  Let  us  see.  I  do  not  say  "inevitably";  possibly 
I  might  modify  that  to  such  an  extent  as  to  say  in  all  necessary 
likelihood  or  some  sort  of  equivalent  phrase  that  might  not  be  quite 
so  strong  as  "  inevitable,"  although  I  think  it  is  pretty  near  inevit- 
able. Would  it  not  work  out  in  this  way,  that  any  contemplated 
operation  of  such  a  line  as  that,  in  which,  in  the  beginning,  the 
chances  for  return  are  not  encouraging  and  in  which  the  idea  is  held 
out  that  when  the  returns  begin  that  the  Government  is  to  withdraw, 
v»?henever  that  may  arise — do  j^ou  think  it  is  likely  that  private 
capital  would  invest  in  a  ship  or  a  line  of  ships  that  would  embark 
upon  an  enterprise  of  that  sort? 

Secretary  McAdoo.  You  mean  in  competition  with  the  Govern- 
ment line  ? 

Mr.  Saunders.  No,  to  invest  in  those  particular  shipsj  because 
those  ships  would  be  operated  under  this  corporation  that  we 
spoke  of? 

Secretary  McAdoo.  I  do  not  know  that  I  catch  that  point  exactly. 

Mr.  Saunders.  I  will  restate  it,  then. 

Secretary  McAdoo.  Please  do. 

Mr.  Saunders.  For  the  purpose  of  operating  such  a  line  as  that, 
we  will  say  the  Government  forms  a  corporation  under  the  laws  of 
the  District  of  Columbia  and  it  takes  51  per  cent  of  the  stock.  The 
rest  of  it  is  open  to  the  public  to  subscribe.  Now,  with  such  a  dis- 
couraging outlook  for  profit  as  we  have  indicated  from  a  line  of  that 
sort,  do  3'ou  think  private  capital  would  be  in  any  haste  to  take  the 
remaining  49  per  cent  of  the  stock? 

Secretary  McAdoo.  I  do  not  think  so. 

Mr.  Saunders.  So  it  does  come  back,  then,  to  what  I  said,  that  such 
an  enterprise  as  that — it  would  be  inevitable — the  Government  would 
have  to  operate  exclusively  ? 

Secretary  McAdoo.  If  it  entered  upon  such  a  line  as  that,  yes. 
But  the  broad  assumption  in  your  question  that  a  line  must  be  op- 
erated at  a  loss,  I  do  not  concede  that.  I  do  not  think  it  would 
have  to. 

Mr.  Saunders.  I  just  gathered  that  from  the  attitude  of  the  Avhole 
mercantile  shipping  world  and  in  the  course  of  the  shipping  debates 
which  I  have  heard  before,  that  in  respect  to  South  America  there 
was  no  opportunity  for  a  profit  for  a  single  ship  or  line  that  would 
induce  private  capital  to  take  it  up. 

Secretarj^  McAdoo.  I  do  not  think,  Mr.  Saunders,  that  that  suppo- 
sition is  correct.  I  believe  that  ships  can  be  operated  profitably  to 
South  America  if  you  get  ships  of  an  efficient  type,  and  you  will  run 
them,  of  course,  in  connection  with 

Mr.  Saunders.  We  will  come  back,  then,  to  the  other  requirement. 
If  there  is  opportunity  for  reasonable  profit  there  to  private  capital, 


312      SHIPPING  BOARD,  jSTAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

there  is  certainly  abundant  capital  in  this  country — far  more  than  is 
contemplated  in  this  bill — and  why  is  it  that  private  capital  won't 
take  up  that  enterprise,  in  the  same  hopeful  spirit  you  have,  and 
operate  it  and  get  these  returns  for  itself? 

Secretary  McAdoo.  I  do  not  know.  For  private  capital  there  are 
many  opportunities  where  it  can  be  profitably  employed  that  it  does 
not  apparently  want  to  seize. 

Mr.  Saunders.  I  thought  if  there  was  any  one  thing  that  capital 
was  illert  about  it  was  to  take  hold  of  opportunities  that  offered  re- 
turns; and  I  know  at  times  it  takes  pretty  big  chances  on  getting 
returns. 

Secretary  McAdoo.  But  you  can  not  always  convince  private  capi- 
tal there  is  an  opportunity.  Private  capital  is  not  infallible,  by  any 
means;  it  does  not  always  see  the  chance;  it  is  not  always  enter- 
prising. 

Mr.  Saunders.  I  assume  that  to  be  true. 

Secretary  McAdoo.  But  I  would  say  this,  that  this  board  is  given 
the  power  simply  to  operate  some  lines  through  the  medium  of  a  cor- 
poration if  after  investigation  of  the  whole  field  it  seems  to  be  best  for 
the  commerce  and  for  the  interests  of  our  country.  Now,  it  may  be  that 
a  line  established  in  that  manner — that  is,  a  line  in  which  the  Gov- 
ernment took  the  controlling  interest  in  the  stock — could  be  operated 
between  ports  in  the  United  States  and  the  west  coast  of  South 
America  profitably  from  the  beginning.  I  believe  myself  that  it  can 
be.  I  think  my  opinion  on  that  question  is  probably  worth  very 
little,  but  from  what  I  have  learned  of  conditions  in  South  America 
through  the  Pan  American  Financial  Congress  and  the  fa^ts  pre- 
sented to  me  by  many  eminent  South  American  financiers  anu  states- 
men who  were  at  that  conference,  I  am  confident  such  lines  can  be 
operated  profitably,  provided  the  ships  are  of  a  modern  and  efficient 
type. 

Suppose  it  was  demonstrated,  aft^r  a  short  time,  that  such  a  line 
was  profitable;  then  if  the  Congress  decided  that  it  w^as  better  that 
that  line  should  be  turned  over  to  private  capital  to  operate,  to  sell 
those  ships  or  to  sell  the  stock  in  this  corporation,  it  could  be  done. 
But  very  frequently  the  actual  demonstration  is  necessary  before  you 
can  get  private  capital  to  make  these  ventures. 

Let  us  look  at  the  conditions  in  the  Pacific  to-day.  Here  the 
Pacific  Mail  has  withdrawn  its  vessels.  What  its  reasons  were  or 
what  motives  actuated  it  are  immaterial  to  me — I  am  concerned 
only  in  the  effects  of  its  action.  The  important  fact  is  that  the  com- 
merce between  the  United  States  and  the  Orient  is  suffering  for  lack 
of  transportation  under  the  American  flag.  Now,  suppose  this 
shipping  board  was  in  existence  to-day  and  had  the  vessels  and  could 
put  some  of  them  in  the  oriental  trade,  touching  at  San  Francisco 
and  Seattle,  for  the  purpose  of  relieving  that  situation,  undoubtedly 
those  vessels  could  be  operated  at  a  profit,  and  it  would  greatly  ad- 
vantage the  country  if  that  were  done. 

The  board  will  possess  a  power  which  it  may  exercise  in  aid  of  our 
commerce  in  such  circumstances  as  it  may  feel  justified  in  doing. 

Mr.  Saunders.  Let  me  suggest  that  I  do  not  profess  to  have  ex- 
pert knowledge  in  respect  to  South  American  trade — I  only  have  that 
acquaintance  with  it  that  every  reasonably  well-read  man  has — but  I 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.       313 

take  it  that  all  up  and  down,  at  our  main  ports  on  the  Atlantic  coast, 
shrewd,  long-headed,  far-seeing  men  looking  around  for  opportuni- 
ties, if  those  opportunities  were  lying  loose,  so  to  speak,  would 
be  pretty  prompt  to  avail  themselves  of  them.  It  would  not  be  any 
case  of  being  like  the  man  from  Missouri;  they  would  not  have  to  be 
shown  by  the  Government. 

Secretary  McAdoo.  Mr.  Saunders,  do  you  know  how  many  long- 
headed, hard-fisted,  far-sighted  men  refused  to  touch  the  telephone 
when  it  was  first  presented;  and  many  other  things? 

Mr.  Saunders.  Oh,  yes;  but  that  was  an  entirely  different  sort  of 
thing.  So  far  as  that  is  concerned,  it  was  a  thing  without  any  ex- 
perience along  that  line.  I  also  know  the  attitude  of  that  same  char- 
acter of  men  toward  the  railroads  and  steam  engines  when  they 
were  first  brought  forward,  and  all  that.  But  here  is  a  thing  that 
has  been  going  on  for  years  and  years  and  centuries;  and,  as  I  have 
said,  we  have  in  our  great  ports  men  whose  business  it  is  in  long  years 
of  active  and  intelligent  participation  in  business  to  be  acquainted 
with  all  those  things. 

Secretary  McAdoo.  Permit  me  to  give  you  a  case  in  point. 

Mr.  Saunders.  You  Avere  speaking  of  the  telephone.  I  can  give 
the  same  interesting  experiences  in  connection  with  the  Burroughs 
adder  and  bond  and  stock  brokerage  companies;  but  those  are 
gambling  ventures. 

Secretary  McAdoo.  Let  me  give  you  one  that  is  not  a  gambling 
proposition.  The  Pacific  Mail  withdrew  its  ships  from  the  Pacific 
Ocean — I  say  for  reasons  that  are  immaterial  so  far  as  the  purpose 
of  my  argument  is  concerned — at  a  time  when  the  rates  of  freight 
were  unusually  high  and  remunerative,  and  the  amount  of  freight 
offered  was  greater  than  it  could  take.  The  rates  of  freight  were 
from  three  to  four  times  as  much  as  the  normal  rates;  the  normal  rate 
for  weight  or  measurement  freight  in  the  Pacific  was  $5  a  ton. 
When  the  Pacific  Mail  withdrew  its  ships,  I  know  of  one  order  of 
80,000  tons  of  x\merican  freight  for  shipment  to  the  Orient  that  was 
in  the  market  and  the  manufacturers  were  offering  to  pay  $15  a  ton 
to  have  it  transported.  I  am  told  that  ISIr.  Robert  Dollar  took  40,000 
tons  of  that  freight  at  $15  a  ton  and  that  the  remaining  40,000  tons 
were  not  taken  for  some  time  thereafter.  I  understand — although 
I  have  not  been  able  yet  to  verify  this  part  of  my  statement — that 
$20  and  possibly  $25  a  ton  is  being  offered  to-day  for  transportation 
of  weight  or  measurement  freight  in  the  Pacific.  Private  capital  is 
not  taking  advantage  of  its  opportunity  and  the  Government  of  the 
United  States,  in  the  meantime,  has  its  hands  so  tied  that  the  Army 
transports  that  are  leaving  San  Francisco  once  a  month  for  the 
Orient  can  not  take  a  pound  of  private  freight  at  any  price,  although 
these  transports  may  be  empty.  Now,  if  private  capital  was  alert 
to  its  opportunities,  I  think  it  would  certainly  enter  that  field.  It  is 
alert  to  this  extent,  that  it  is  buying  ships  to-day  at  fabulous  prices — 
if  it  had  been  long  headed,  it  would  have  bought  them  cheap  long 
ago — and  running  those  ships  chiefly  in  the  Atlantic  where  rates  are 
higher  than  they  are  in  the  Pacific,  although  they  are  high  enough 
in  the  Pacific  to  tempt  an^^body. 

Mr.  Saunders.  That  may  have  been  the  reason;  these  people  may 
have  sold  out  in  the  Pacific  so  as  to  move  into  the  Atlantic,  and  it 


314      SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MEECHANT  MARINE. 

may  be  that  those  fellows  were  long-headed  after  all.  But  I  would 
say  this,  that  if  they  were  deliberately  giving  up  gold  nuggets  on 
the  Pacific,  it  would  be  a  very  remarkable  sort  of  performance  they 
were  carrying  on.  Of  course,  I  do  not  know  why  those  people  did 
that  at  that  particular  time. 

Secretary  McAdoo.  The  point  that  I  would  like  to  impress  in  that 
connection  is  this,  that  the  commerce  of  this  country  and  the  inter- 
ests of  this  country,  and  particularly  the  interests  of  the  Pacific 
coast  were  seriously  affected  by  the  withdrawal  of  those  ships  from 
the  Pacific;  and  the  United  States,  the  greatest  and  the  richest 
nation  on  earth,  stands  here  impotent  to  protect  its  own  interests 
because  it  has  not  created  any  agency  which  could  prevent  such  a 
wrong  as  that  to  the  interests  of  the  country  or  else  take  steps  to 
supplant  and  restore  the  necessary  agencies  that  have  been  with- 
drawn. 

Mr.  Saunders.  Of  course,  you  are  discussing  a  phase  of  the  mat- 
ter not  comprehended  in  my  question. 

Secretary  McAdoo.  Yes. 

Mr.  Saunders.  As  I  understand,  all  over  the  world  to-day  there 
are  wonderful  opportunities  for  any  man  who  is  fortunate  enough 
to  own  a  waiting  ship ;  but  in  this  bill  we  have  in  mind  a  return  to 
normal  times  and  operations  under  normal  conditions.  Now,  I 
notice  in  the  bill  it  is  provided  that  the  shipping  board  can  sell  these 
ships.  What  inducement  would  there  be  to  a  man  to  buy  a  ship  from 
the  shipping  board  ? 

Secretary  Mcx4.doo.  The  inducement  will  be  to  buy  a  type  of  ship 
which  will  be  so  much  better  than  anything  that  has  ever  been  turned 
out  that  he  will  be  quite  glad  to  have  it. 

Mr.  Saunders.  Does  this  bill  contemplate,  then,  future  construc- 
tion with  respect  to  a  particular  line  of  work? 

Secretary  McAdoo.  I  think  it  ought  to. 

Mr.  Saunders.  Then,  if  you  are  going  to  get  ships  of  those  types, 
that  refers  to  their  construction  under  this  bill. 

Secretary  McAdoo.  I  have  reference  to  a  standard  type  of  cargo 
carrier  or  freighter  which  is  the  thing  most  demanded  in  the  in- 
terest of  our  commerce;  that  type  of  ship  which  I  think  can  be  de- 
veloped in  the  light  of  modern  scientific  discoveries  will  be  so  much 
superior  to  anything  that  is  now  afloat  that  it  will  be  very  much  in 
demand. 

Mr.  Saunders.  Conceding  that  the  Government  would  have  ships 
of  that  type  constructed  and  then  sold  them,  the  same  yards  that 
constructed  those  ships  for  the  shipping  board  for  the  purpose  of 
sale,  could  construct  ships  for  any  other  intended  purchasers? 

Secretary  McAdoo.  Undoubtedly ;  and  I  hope  they  would. 

Mr.  Saunders.  What  I  am  trying  to  get  at,  then,  is  why  should 
a  purchaser  purchase  one  of  those  ships  from  the  board  when  he 
would  be  at  a  very  distinct  disadvantage  in  doing  so? 

Secretary  McAdoo.  Under  what  disadvantage? 

Mr.  Saunders.  I  know  of  one  certainly  very  positive  disadvantage. 
It  is  provided  that  these  ships  can  be  taken  over  in  time  of  war  at  a 
price  which  would  have  reference  to  the  price  in  normal  times.  Xow, 
the  average  man,  if  you  undertook  to  commandeer  his  ship  in  war 
times  would  not  be  subject  to  unj  such  limitation  as  that;  and  that 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      315 

cei'tainh^  inits  a  purchaser  from  the  shipping  board  at  a  very  distinct 
disadvantage,  having  in  mind  the  possibility  that  he  can  and  would 
buy  a  ship  from  a  different  owner. 

Secretary  McAdoo.  It  is  my  opinion  that  the  hard-headed  capital- 
ist you  refer  to  might  say  that  that  is  a  remote  chance. 

Mr.  Saunders.  I  am  talking  about  the  probability  in  time  of  war. 

Secretary  McAdoo.  He  would  probably  calculate  his  risks,  and 
it  is  probable  that  that  may  affect  the  price  which  the  Government 
would  get  for  the  ship.  But  even  if  the  Government  sold  the  ship 
at  a  smaller  price  than  it  would  otherwise  get,  it  would  be  com- 
pensated in  this  way,  it  would  have  a  type  of  vessel  built  purposely 
for  naval  requirements,  of  which  it  could  repossess  itself  at  a  reason- 
able price  in  time  of  need. 

Mr.  Sauxders.  That  is  the  Government's  end  of  it. 

Secretary  McAdoo.  I  say  the  price  the  Government  Avould  accept 
for  that  ship,  if  it  has  to  sell  it  at  less  than  cost  to  such  purchaser, 
would  be  a  small  price  to  pay  for  such  a  guaranty. 

Mr.  Saunders.  That  is  the  Government's  end  of  it;  but  I  am  talk- 
ing about  the  individual  who  would  put  himself  at  this  disadvantage, 
as  compared  with  some  other  purchaser,  and  bu3'S  from  the  Govern- 
ment; there  is  a  relative  advantage  to  the  Government,  but  none  to 
the  individual  purchaser. 

Secretary  McAdoo.  You  do  not  understand  me.  I  point  out  the 
advantage  to  the  individual  purchaser,  and  I  say  he  might  pay  a  less 
price  for  the  ship  because  he  gives  the  Government  that  claim  upon 
the  vessel. 

Mr.  Saunders.  Let  us  see  how  that  would  work  out.  The  Govern- 
ment, in  contracting  for  their  ships,  with  the  shipyard,  would  of 
course  have  to  buy  from  that  yard  with  respect  to  the  market  for 
those  ships,  and  the  yard  would  sell  to  the  Government  just  as  it 
would  to  any  other  purchaser;  so  that  it  would  get  no  advantage 
with  respect  to  its  purchases  in  that  particular  over  any  other  pur- 
chaser in  that  yard.  But  then  the  individual,  who  intends  to  operate 
that  ship  in  the  mercantile  world,  as  you  suggest,  might  get  that  ship 
from  the  Government  at  less  than  the  Government  paid  for  it. 

Secretary  McAdoo.  That  might  happen. 

;Mr.  Saunders.  That  would  be  certainly  indirectly  aiding  the  in- 
dividual. I  do  not  see  very  much  difference  between  that  and  letting 
the  fellow  own  the  ship  and  gi^e  him  one  or  two  hundred  thousand 
dollars,  or  whatever  it  is,  in  cost  price  or  by  subsidy. 

Secretary  McAdoo.  I  think  there  is  a  very  essential  difference. 

Mr.  Saunders.  In  substance,  I  do  not  see  the  difference. 

Secretary  McAdoo.  It  is  this :  The  Government  builds  a  vessel  and 
builds  it  with  reference  to  naval  uses  and  naval  needs. 

Mr.  Saunders.  Yes. 

Secretary  McAdoo.  If  it  sells  that  vessel,  it  sells  it  with  the  re- 
tention of  a  certain  interest;  that  is,  the  right  to  repossess  itself  of 
the  vessel. 

Mr.  Saunders.  Yes;  that  is  true. 

Secretary  McAdoo.  Suppose  it  sells  it  for  10  per  cent  less  than 
cost;  the  Government  would  be  paying  the  individual  that  much  for 
the  privilege  of  taking  it  at  any  time  at  its  market  value;  and  at 
the  same  time  the  Government  would  be  assured  of  a  proper  type  of 


316      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

naval  auxiliaries ;  and  it  Avoiild  not  be  paying  any  of  the  expenses  of 
keeping  it  or  maintaining  it  in  the  meantime. 

Mr.  Saunders.  All  of  that  is  true  beyond  the  shadow  of  a  doubt. 
But  as  I  gather  from  the  different  reports  of  Mr.  Chamberlain  and 
others  who  deal  w^th  the  subject,  that  is  exactl}'^  the  way  the  foreign 
Governments,  in  the  matter  of  subsidy,  approach  their  shipowners; 
instead  of  the  Government  undertaking  to  have  the  ship  built  as  it 
wants  it  it  says  to  those  shipowners,  "  If  you  will  have  a  ship  of  such- 
and-such  a  type  constructed  along  the  lines  that  I  lay  down  and 
then  operate  it,  why  we  will  give  you  so  much  in  contemplation  of  the 
fact  that  we  may  take  it  over  when  we  want  it,"  a  ship  that  has  been 
constructed  with  reference  to  her  possible  needs.  So  that  the  Gov- 
ernment gets  exactly  the  same  practical  results  in  that  way  as  it 
would  by  having  the  ship  constructed  according  to  its  notion  and 
paying  the  market  price  for  it,  and  then  selling  it  to  some  fellow  at 
less  than  it  cost  the  Government,  having  in  mind  that  it  can  take  it 
back  when  it  wants  it.    The  results  are  precisely  the  same. 

Secretary  McAdoo.  I  do  not  think  they  are.  If  the  Government 
builds  the  ship  according  to  specifications  to  meet  certain  specific 
purposes,  it  is  more  apt  to  get  what  it  requires  in  specific  tj-pes  than 
if  it  simply  subsidized  private  owners  who  build  ships  according  to 
their  own  designs  and  liking  and  over  which  the  Government  has 
only  an  incidental  direction.  And  there  is  another  point — and  I 
think  I  am  correct  in  this  statement — that  those  countries  which 
have  given  subsidies  to  shipowners. have  confined  their  subsidy  almost 
wholly  to  the  fast  type  of  passenger  and  cargo  ships  or  express  ships. 
They  have  not  subsidized  the  ordinary  cargo  unit;  and  they  have  not 
yet  produced  the  type  of  cargo  unit  which  is  anything  like  as  effi- 
cient as  can  be  now  constructed.  And  the  Government,  in  protecting 
its  own  needs  and  strengthening  its  ^avy  and  carrying  out  effectively 
the  policy  of  preparedness,  can  not  only  do  that  thing,  but  it  can  also 
incidentally  demonstrate  the  value  of  this  new  type,  as  I  said  before. 

Mr.  Saunders.  All  of  that,  of  course,  is  prospective. 

Secretary  McAdoo.  Yes;  all  of  that  is  prospective. 

Mr.  Saunders.  These  other  Governments  have  subsidies  that  in 
the  main  accomplish  the  same  results  in  that  they  enable  a  permanent 
development. 

Secretary  McAdoo.  Of  course,  on  the  question  of  subsidy 

Mr.  Saunders.  I  am  not  going  to  get  into  a  discussion  between 
you  and  me  along  that  line;  I  just  wanted  to  bring  out  the  essential 
facts  in  order,  as  I  have  said,  to  get  the  facts  in  the  record,  having 
in  mind  the  results  to  be  obtained  and  the  way  they  were  obtained, 
to  see  if  the  things  did  not  come  to  the  same  end;  because  things 
being  equal  to  the  same  thing — I  believe  in  mathematics — equal  each 
other. 

The  Chairman.  Either  one  would  be  desirable  to  doing  nothing. 

Mr.  Saunders.  I  do  not  see  that  has  any  relation  to  the  question 
I  was  propounding  to  Mr.  McAdoo,  however.  But  I  will  agree  to 
that.  This  particular  proposition,  then,  from  what  has  been  said, 
the  insistence  that  is  made  upon  the  value  of  these  particular  ships 
for  naval  auxiliary  purposes,  contemplates  chiefly  the  naval  develop- 
ment side  of  it  and  the  military  side.  Else  this  bill,  standing  by 
itself,  this  fifty  millions 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      317 

Secretary  McAdoo.  No;  it  contemplates  both. 

Mr.  Saunders.  Oh,  I  know  it  contemplates  both,  but  I  mean- 


Secretary  McAdoo.  You  can  add  the  naval  auxiliary  features  with- 
out any  sacrifice  whatever  of  the  commercial  value  of  the  vessel ;  that 
is,  by  the  intelligent  construction  of  the  vessel  in  the  beginning,  so 
that  provision  will  be  made  for  its  probable  use  for  naval  auxiliary 
purposes. 

Mr.  Saunders.  I  was  just  having  in  mind  the  very  slight  effect 
upon  the  commercial  world  that  that  additional  $50,000,000  of  ships 
would  produce;  that  really  the  naval  auxiliary  feature  of  it  is  more 
to  be  considered  in  this  connection — I  mean  in  the  consideration  of 
this  bill — than  any  future  considerable  effect  upon  the  merchant 
marine  of  the  world. 

Secretary  McAdoo.  I  agree  with  you  so  far  as  the  actual  number 
of  vessels  to  be  constructed  is  concerned,  but  not  as  to  the  effect  of  the 
bill  generally. 

Mr.  Saunders.  This  bill,  I  believe  it  is  contemplated,  according 
to  the  figures  given  us  here  yesterday,  and  I  suppose  you  have  sub- 
stantialh^  given  the  same,  would  give  us  something  like  600,000  tons; 
would  it  ? , 

Secretary  McAdoo.  I  do.  not  know.    It  depends  on  types. 

Mr.  Saunders.  Wouldn't  it  give  us  about  sixty  10,o60-ton  ships? 

Secretary  McAdoo.  That  would  be  about  $80  a  gross  ton.  I  do  not 
know  whether  the  shipping  board  would  have  to  pa}^  that  or  not.  Let 
us  assume 

Mr.  Saunders.  Say  500,000  tons,  then. 

Secretary  McAdoo.  Let  us  assume  that  it  provided  600,000  tons  of 
vessels. 

Mr.  Sai'nders.  Let  us  sa}^  500,000.  I  am  not  undertaking  to  be 
precise  about  that,  because  I  understand  you  can  not  give  the  exact 
figure.  Speaking  solely  of  the  auxiliaries,  that  amount  of  auxiliary 
increase  is  only  needed  in  connection  with  the  very  enormous  ex- 
pansion of  the  naval  side  of  this  country  in  the  future,  is  it  not;  it 
has  no  reference  to  our  present  Navy? 

Secretary  McAdoo.  That  is  what  you  need  now. 

Mr.  Saunders.  I  understood  from  Admiral  Benson  on  yesterday, 
because  I  asked  him  on  that  point,  and  he  said  they  were  about 
600,000  tons  short ;  and  I  asked  him  whether  that  was  with  reference 
to  present  conditions  or  the  plan  that  they  were  working  out  for 
what  they  conceived  to  be  the  ideal  Navy  for  this  country,  and  I  cer- 
tainly understood  him  to  say  it  was  in  connection  with  the  plan  which 
was  being  worked  out.  If  I  am  mistaken  in  that,  of  course,  the  record 
will  show,  but  that  is  what  I  had  in  mind  to  ask  him. 

Secretary  McAdoo.  Capt.  Bertholf,  who  is  here,  tells  me  Admiral 
Benson's  statement  was  that  Ave  have  enough  for  present  needs  of 
our  Navy  in  peace  times  but  not  in  war  times. 

Mr.  Saunders.  That  is  what  I  am  saying. 

Secretary  McAdoo.  In  peace  times.  But  the  point  is  this:  If  you 
are  going  to  have  naval  preparedness  on  any  such  scale  as  is  being 
discussed,  that  implies  that  the  Navy  shall  be  an  effective  fighting 
instrument  all  along  the  line. 

Mr.  Saunders.  Oh,  yes;  I  am  not  troubled  about  the  amount  of 
tonnage  needed  for  auxiliary  purposes. 

32910—16 21 


318      SHIPPIXG  BOAED^  XAVAL  AUXILIARY^  AND  MERCHANT  MARINE. 

Secretary  McAdoo.  I  am  coming  to  that  in  just  a  moment. 

The  C[uestion  of  constructing  naval  auxiliaries  now  is  with  a  view 
to  making  up  the  deficiency  in  our  present  merchant-marine  fleet  for 
naval  auxiliaries  in  case  we  had  to  go  to  Avar  to-morrow  with  the 
Navy  as  it  is.  For  instance,  as  I  understand  it,  the  Navy  needs  to- 
day, on  the  present  basis,  if  a  war  should  break  out,  1,178,000  gross 
tons  of  naval  auxiliaries,  disregarding  what  they  call  the  mosquito 
fleet.  The  mosquito  fleet  could  undoubtedly  be  drawn  from  the 
present  registry  of  American  vessels.  Of  the  1,178,000  gross  tons 
of  naval  auxiliaries  we  would  need  to  supplement  the  fleet  in  case  of 
war,  we.  have  only  about  600,000  tons  available.  That  would  leave 
us  about  600,000  tons  short  now.  And  if  we  were  to  build  this 
600,000  tons  we  would  have  what  no  navy  on  earth  has  to-day — a 
fair  percentage  of  our  required  naval  auxiliaries  in  case  of  war  that 
are  more  efficient  and  better  naval  auxilaries  than  possessed  by  any 
other  nation  on  the  face  of  the  earth.  To  that  extent  it  would 
strengthen  our  Navy  more  than  any  other  navy  on  earth;  and  upon 
the  character  of  your  naval  auxiliar}'  ma}^  depend  success  in  battle. 
The  speed  of  the  naval  auxiliary  fleet  is  an  immense  factor  in  the 
mobility  and  efficiency  of  the  fleet:  the  time  it  takes  to  load  and 
unload  from  the  auxiliary  to  the  battleship  may  be  a  factor  of  the 
very  gravest  importance  in  the  hour  of  extremity.  If  b}'  this  means 
we  provide  a  fair  percentage  of  the  naval  auxiliaries  required,  we 
have  a  better  equipped  and  better  prepared  Xavy  than  any  other  navy 
in  that  respect,  and  therefore  we  advantage  by  it. 

Mr.  Saunders.  I  just  did  not  understand  the  admiral  in  that 
way,  because  if  that  had  been  my  understanding  of  his  answer 
to  my  question  there  would  have  been  no  need  for  me  to  press  the 
question  I  had  in  mind  as  part  of  their  scheme.  But  the  question 
brought  out,  as  to  naval  auxiliaries,  the  statement  from  the  admiral 
that  they  are  in  contemplation  with  respect  to  great  overseas  ex- 
peditions and  not  with  respect  to  defensive  purposes  along  our 
coasts. 

Secretary  McAdoo.  You  are  mistaken,  I  think,  in  that. 

Mr.  Saunders.  I  asked  him  yesterday  about  that,  and  he  stated 
it  had  reference  to  great  operations  in  the  Atlantic  and  in  the  Orient. 

Secretary  McAdoo.  I  am  not  a  naval  expert,  but,  speaking  from 
what  I  have  been  told  by  naval  experts,  if  the  fleet  remains  close  to 
our  own  shores  for  defensive  purposes  only  you  would  require  fewer 
naval  auxiliaries. 

Mr.  Saunders.  That  is  all  I  am  saying. 

Secretary  McAdoo.  But  suppose  you  had  to  go  1,500  miles  to 
meet  an  enemy  and  to  keep  him  off  our  coasts  and  perhaps  have  a 
great  naval  battle  there,  so  as  not  to  endanger  our  coast  at  all; 
then  our  fleet  could  not  go  to  sea  without  adequate  naval  auxiliaries. 
It  might  be  necessary  to  take  the  largest  fleet  across  the  ocean. 

Mr.  Saunders.  I  know  they  figure  on  that  and  the  strength  of  the 
marine  units  for  defense ;  I  think  it  is  an  amplification  of  what  Gen. 
Washington  calls  a  "  superposture  auxiliary  defense.''  I  believe  that 
is  the  way  he  put  it.  You  spoke  of  the  Spanish  War  and  of  some 
purchases  made  at  that  time,  and  then  those  ships  were  sold  for  20 
per  cent  of  their  value? 

Secretary  McAdoo.  Twenty  per  cent  of  their  cost,  I  said. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  M\RINE.      319 

Mr.  Saunders.  I  mean  20  per  cent  of  their  cost.  All  that  that 
comes  to  is  just  that  those  people  who  were  purchasing  those  ships 
used  pretty  bad  judgment.  If  this  board  were  created  here,  and  they 
did  not  do  any  better  and  did  not  use  any  better  judgment  than  those 
people  did  in  the  Spanish-American  War,  we  might  again  have  to  sell 
at  20  per  cent  of  the  cost. 

Secretary  McAdoo.  The  difference  is  this.  i\Ir.  Saunders :  If  you 
built  those  vessels  we  would  liave  at  least  -10  to  50  per  cent — say  40 
per  cent — of  the  total  amount  of  naval  auxiliaries  required  that  we 
can  immediately  put  our  hands  on  and  which  are  effective  ships  for 
the  purpose.  We  have  at  least  assured  our  safety  to  that  extent  and 
can  take  the  chance  of  impressing  out  of  the  merchant  marine  the 
remaining  GO  per  cent;  and  to  the  extent  of  the  40  per  cent  we  are 
that  much  better  off  than  if  we  relied  wholly  upon  the  merchant 
marine  for  all  of  those  auxiliaries.  We  have  not  enough  vessels  in 
the  merchant  marine,  anyway,  to  supply  all  that  we  need. 

Mr.  Saunders.  I  think  you  said,  and  I  think  on  that  we  are  all 
agreed,  that  the  ships  in  the  market  to-day  are  pretty  high.  If  this 
bill  becomes  law  and  whatever  is  left  of  the  $50,000,000  investment  is 
put  into  the  purchase  of  ships  at  the  present  figure,  you  would  get 
much  less  than  60  ships,  would  you  not.  at  the  present  figure? 

Secretary  McAdoo.  You  speak  of  the  number  of  ships;  that  de- 
pends, of  course,  on  the  type  and  size. 

Mr.  Sauxders.  It  was  given  us  yesterday.  Either  I  or  some  mem- 
ber of  the  conmiittee  asked  Admiral  Benson  about  what  this 
$50,000,000  would  buy.  and  he  went  ahead  and  spoke  of  certain  ton- 
nage, and,  if  my  recollection  is  correct,  he  said  about  60. 

Secretary  ^SIcAdoo.  I  do  not  think  it  would  be  necessary  for  this 
board — I  think,  if  the  board  exercised  judgment,  it  would  not  place 
orders  for  all  of  those  ships  instantly. 

Mr.  Saunders.  Then,  so  far  as  the  present  emergency  is  concerned, 
this  would  not  help  very  much,  if  they  used  judgment  in  placing 
orders  for  the  purchase  of  the  ships? 

Secretary  McAdoo.  It  is  going  to  take,  of  course,  some  time  to 
build  those  vessels,  Mr.  Saunders. 

Mr.  Saunders.  That  is  all  I  want  to  develop  in  that  connection. 

Secretaiy  McAdoo.  That  gets  back  to  what  I  said  in  the  beginning, 
viz:  that  lay  the  failure  to  act  in  September,  1914,  just  after  the 
European  war  broke  out,  when  we  could  have  su]:)plied  ourselves 
with  a  large  number  of  merchant  vessels  at  bargain  prices  which 
would  have  been  suitable  in  large  part  for  naval  auxiliaries  and  were 
imperatively  needed  for  our  commerce,  we  lost  our  opportunity  to 
meet  the  emergency  and  are  suffering  from  that  to-day. 

Mr.  Saunders.  I  agree  with  you;  if  we  had  passed  a  bill  to  buy  a 
whole  lot  of  ships  for  investment  at  that  time  we  would  have  been 
forehanded  people.  But  that  was  not  proposed — to  go  in  the  market 
and  buy  ships  because  of  the  reason  that  ships  were  down  and  were 
being  offered  at  bargain  prices. 

Secretary  McAdoo.  It  was  argued  very  strongly.  Let  me  just  con- 
tinue that  point  a  moment.  I  say  we  lost  the  opportunity  to  deal 
with  the  emergency  and  it  has  had  a  deplorable  effect  upon  the 
country;  the  disaster  to  our  commerce  has  been  greater  than  any 
man  in  this  room  imagines,  and  I  think  it  can  be  shown  by  any  sort 


320      SHIPPING  BOAED^  XAVAL  AUXILIARY^  AND  MERCHANT  MARINE. 

of  an  investigation  of  the  shipping  situation  in  the  country  to-day 
and  by  the  men  engaged  in  this  sort  of  commerce.  Now,  here  is  the 
situation :  We  are  confronted  with  unknown  seas,  uncharted  seas  for 
the  future  while  this  great  war  is  going  on.  Are  you  going  to  sit 
still,  without  making  any  effort  to  meet  these  conditions  and  protect 
our  interests?  AVe  must  make  a  beginning,  because  we  can  not  build 
the  structure  until  we  lay  the  foundation.  All  we  can  hope  to  do,  if 
we  pass  this  legislation  now,  is  to  organize  the  powers  of  the  United 
States,  to  mobolize  them  for  this  phase  of  preparedness,  with  a  view 
to  meeting  conditions  as  they  develop,  as  fast  as  it  is  possible  for  ns 
to  meet  them  in  the  circumstances. 

Mr.  Saunders.  I  just  want  to  bring  out  that  idea,  that  this  is  not 
an  emergency  proposition  and  does  not  meet  any  present  emergency. 

Secretary  McAdoo.  It  might  enable  us  to  meet  a  future  emergency, 
and  many  of  them. 

Mr.  Saunders.  That  is  all  I  w-ant  to  develop,  that  fact,  and  to  get 
it  in  the  record. 

With  respect  to  the  purchase  of  ships,  as  I  said,  if  any  proposition 
had  been  put  up  to  Congress  at  any  time,  at  the  time  you  speak  of, 
that  here  is  a  great  opportunity  for  Congress  to  take  fifty  million  or 
one  hundred  million  and  go  out  and,  just  as  an  investment  proposi- 
tion, buy  an  immense  number  of  ships  at  a  great  advantage,  I  cer- 
tainly never  heard  of  it,  but  I  do  not  think  there  would  have  been  any 
opposition  in  Congress  to  such  a  proposition  as  that.  But  as  the  bill 
Avent  along  the  price  of  the  ships  continued  rising  all  of  the  time,  and 
if  we  had  passed  this  bill  during  the  last  session  of  Congress  or  at  the 
time  you  speak  of,  when  everything  was  all  to  pieces  and  nobody  knew 
what  was  going  to  happen  and  a  fellow  with  mone}'  had  a  chance 
to  pick  up  bargains  and  all  that  sort  of  thing — if  we  had  passed 
this  bill  at  the  last  session  of  Congress  that  only  called  for  forty 
millions,  or  ten  millions  out  of  the  Treasury  and  thirty  millions  of 
bonds,  by  the  time  you  got  into  operation  it  would  certainly  have 
been  some  time  in  March  or  April  and  ships  were  away  up  yonder 
then,  and  I  imagine  they  were  about  as  high  then  as  they  are  now. 

Secretary  McAdoo.  Mr.  Saunders,  let  me  say  that  I  argued  that 
l^roposition  with  many  gentlemen  who  discussed  it  with  me  until 
I  Avas  blue  in  the  face,  and,  while  I  do  not  say  every  man  in  Con- 
gress knew  about  the  conditions,  at  the  same  time  it  was  discussed 
very  thoroughly  on  the  floor  of  Congress.  We  could  have  bought 
splendid  merchant  vessels  at  from  $40  to  $60  per  gross  ton  while 
these  discussions  were  going  on  in  Congress.  They  are  worth  $100 
to  $200  per  gross  ton  to-day. 

Mr.  Saunders.  I  am  speaking  of  a  concrete  proposition  put  up  to 
us.  Now,  here  is  a  chance  to  buy  a  lot  of  bargain  ships  if  you  will 
just  appropriate  the  money  to  buy  them  and  do  not  bother  about 
what  3'ou  are  going  to  do  with  them;  just  appropriate  the  money  to 
buy  now — I  say  that  kind  of  a  concrete  proposition  was  never  dis- 
cussed at  the  time  you  speak  of.  In  the  course  of  consideration  of 
the  bill  it  was  suggested  there  were  ships  we  could  purchase,  and  I 
heard  of  that  line  you  speak  of  and  then  it  was  denied  through  the 
papers  that  there  were  any  ships  for  sale  and  all  of  that  sort  of 
thing.  But  now  in  March  and  April  of  last  year,  have  you  any 
figures  to  show  the  relative  price  of  ships  as  of  that  date  as  against 
the  prices  now  ? 


SHIPPING  BOARD,  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      321 

Secretary  McAdoo.  March  of  1915? 

Mr.  Saunders.  Yes. 

Secretary  McAnoo.  Yes;  I  think  I  can  supply  those,  and,  with 
Aour  permission,  I  will  put  in  the  record  whatever  I  can  find  on 
that.    [Exhibit  No.  11.] 

Mr.  Saunders.  Yes;  and  could  you  show  the  type  of  ship  you 
might  choose — say  the  ordinary  freighter.  You  can  get  the  figures 
on  an  ordinary  freighter,  sa3%  of  10,000  tons,  and  give  them  to  us 
as  of  March  or  Apiil,  1915,  and  then  what  the  same  freighter  would 
cost  at  the  present  time. 

Secretary  McAdoo.  Yes;  I  will  put  that  in  the  record. 

Mr.  Saunders.  I  believe  that  is  all.  Mr.  Secretary. 

Secretary  McAdoo.  Let  me  say  this  in  that  connection.  When  this 
war  broke  out  various  emergency  measures  were  imperatively  re- 
quired immediately  to  protect  the  interests  of  this  country.  Among 
them  were  these :  An  amendment  to  the  national-bank  act  which 
made  it  possible  for  national  banks  to  get  emergency  currency,  even 
though  such  national  banks  did  not  have,  as  required  ])V  law  at  that 
time,  40  per  cent  of  their  capital  in  circulation  in  national-bank  notes 
secured  by  Government  bonds.  Many  of  the  banks  were  ineligible 
to  the  benefits  of  the  emergency  provisions  of  the  Aldrich-Vreeland 
Act,  as  amended  by  the  Federal  reserve  act,  because  they  did  not  have 
sufficient  outstanding  circulation  to  enable  them  to  take  advantage 
of  its  provisions. 

And  now  I  want  to  call  your  attention  to  certain  lather  remark- 
able things  that  happened  at  that  time;  and  in  saying  this  I  am 
casting  reflections  on  no  one.  I  am  only  telling  you  how  a  thin^ 
can  go  when  everybody  is  for  it  and  no  selfish  interest  is  affected,  and 
how  difficult  it  is  to  make  progress  when  somebody  whose  selfish 
interest  is  affected  gets  in  the  way  of  the  real  needs  of  the  people  of 
the  country.  In  24  hours  Congress  passed  the  amendment  which 
removed  all  restrictions  and  gave  every  national  bank  in  the  country 
an  opportunity  to  get  emergency  currency,  whether  they  had  out- 
standing circulation  secured  by  Government  bonds  or  not.  Now, 
that  was  a  wise  provision,  an  essential  thing  to  do,  and  it  was  done. 

Mr.  Saunders.  That  was  so  plainly  right  and  so  plainly  an 
emergency  proposition,  and  presented  as  such  that  there  was  not  a 
dissenting  voice. 

Secretary  McAdoo.  No  doubt.  Now  let  us  assume  that  some  of  the 
big  banks  had  come  down  here  and  opposed  that  measure  for  their 
benefit  and  not  for  the  benefit  of  the  people;  do  you  think  it  would 
have  gone  through  in  24  hours? 

Mr.  Saunders.  Of  course,  it  did  not  affect  the  bankers. 

Secretary  McAdoo.  It  affected  them  favorably. 

Mr.  Saunders.  Everybody'  at  once  saw  the  advantage  of  that  and 
it  was  presented  as  an  emergency  proposition. 

Secretar}'  McAdoo.  All  right;  I  will  call  your  attention  to  an- 
other thing.  Here  was  war-risk  insurance.  War-risk  insurance  did 
not  affect  any  insurance  company's  interests  adversely,  because  the 
insurance  companies  had  very  little  money  invested  in  war-risk  in- 
surance, but  it  did  help  the  shipowners  of  the  country.  And  before 
that  bill  passed  every  one  of  them  got  behind  it  and  the  result  was 


322      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

that  there  was  no  opposition  to  the  bill  and  it  immediately  went 
through. 

Mr.  Saunders.  I  think  you  entirely  misapprehend  the  situation. 
I  never  heard  any  shipowners — and  I  know  all  about  those  things  you 
speak  of — coming  down  here  and  getting  behind  this  bill. 

Secretary  McAdoo.  I  do  not  misunderstand  you  and  I  hope  no  one 
will  misunderstand  me.  I  am  only  trying  to  make  clear  how  two 
propositions  of  inherent  value  can  be  put  forward  quickly  when 
everybody  comes  forward  to  aid  and  no  selfish  interest  is  antag- 
onized. It  is  merely  cooperation.  The  same  thing  happened  with 
respect  to  the  ship  registry  bill, 

Mr.  Saunders.  Yes;  I  know  all  about  that. 

Secretary  McAdoo.  Exactly.  But  when  it  was  proposed  to  have 
the  Government  buy  a  lot  of  vessels,  then,  of  course,  we  had  a  terrible 
struggle,  because  every  large  and  selfish  interest  which  is  affected 
by  it  opposed  it  and  has  put  everv  possible  impediment  in  the  wav 
of  it. 

Mr.  Saunders.  You  have  stated  two  emergency  propositions,  and 
I  agree  with  you  fully  on  them,  but 

Secretary  McAdoo.  The  point  I  am  trying  to  make  clear  is  this: 
Here  was  an  emergency  just  as  great  with  respect  to  our  commerce 
as  the  financial  emergency  of  which  I  spoke;  a  far  greater  emer- 
gency with  respect  to  our  commerce  than  war-risk  insurance;  a  far 
greater  emergency  with  respect  to  our  commerce  than  the  ship  reg- 
istry bill ;  and  everybody  got  behind  those  three  measures,  recognized 
the  emergency  and  dealt  with  it.  But  j^ou  could  not  make  it  clear 
to  a  large  element  in  this  country — and  I  am  not  speaking  of  Con- 
gress; I  am  speaking  of  the  shipowners — that  the  commerce  of  this 
country  also  demanded,  in  addition  to  those  measures,  and  the  true 
interests  of  the  American  people  demanded,  that  these  ships  should 
be  bought  when  we  had  the  opportunity  to  get  them.  The  result  is 
we  have  had  a  controverted  point  ever  since,  and  no  ships,  and  that 
is  the  reason  why  it  has  been  difficult,  Mr.  Saunders,  to  make  Con- 
gress and  many  other  people  see  that  a  great  emergency  in  respect 
of  ships  to  carry  on  commerce  needed  to  be  dealt  with  just  as 
quickly  and  effectively  as  the  other  emergencies  relating  to  national- 
bank  circulation,  war-risk  insurance,  and  registry  of  ships  were 
quickly  and  effectively  handled. 

Mr.  Saunders.  You  have  put  in  the  record  your  view  in  respect 
to  that  and  citing  those  situations  as  analogies.  But  "  facts  are  facts," 
and  they  never  could  be  anything  like  analogous  to  this  situation. 
Those  things  were  always  clearly  emergency  propositions,  presented 
as  emeregency  propositions,  designed  to  operate  and  which  were 
justified  as  emergency  propositions;  but  there  never  was,  to  my 
knowledge,  a  single  flat-footed  proposition  such  as  I  have  indicated 
presented  to  us  that  here  is  a  chance  now  for  us  to  go  out  and  buy 
a  whole  lot  of  ships  as  an  emergency  proposition  without  any  refer- 
ence to  changing  the  policy  of  the  Government  as  to  Government 
operation  and  Government  ownership,  or  anything  of  that  sort,  but 
here  is  your  chance,  at  bargain  prices,  to  get  a  whole  lot  of  ships  at  a 
profit.  If  that  proposition  had  been  presented,  I  do  not  believe  there 
would  have  been  a  dissenting  voice  in  the  House  of  Representatives; 
I  never  heard  anybody  objecting  to  an  emergency  proposition. 


SHIPPING  BOARD^  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE.       323 

Mr.  Goodwin.  I  would  like  to  ask  the  Secretary  if  he  ever  knew 
of  any  President  of  the  United  States  or  any  Cabinet  officer  suggest- 
ing to  Congress  that  "  Now  is  your  opportunity  to  buy  a  bargain  ". 
Does  not  the  President  of  the  United  States  and  do  not  all  Cabinet 
officers  stress  and  emphasize  great  economic  measures  of  importance 
to  the  American  people?  To  make  the  illustration  still  stronger, 
would  the  President  of  the  United  States  or  the  Secretary  of  the 
Treasury  or  any  other  Cabinet  officer  attempt  to  suggest  "  Now  is  a 
good  time  to  buy  United  States  Steel,"  or  Bethlehem  Steel,  or  to  buy 
cotton  futures,  or  to  buy  grain  ? 

]Mr.  Greene.  Or  to  buy  a  bale  of  cotton. 

Mr.  Goodwin.  Yes ;  for  the  reason  you  can  make  some  money,  and 
you  can  make  a  profit  thereby.  Aren't  all  of  these  propositions  pre- 
sented to  Congress  not  from  the  standpoint  of  speculation  but  more 
from  the  economic  standpoint,  to  further  the  interests  of  the  whole 
people? 

Secretary  McAdoo.  Absolutely.  The  question  was  not  whether 
you  could  buy  ships  at  bargain  prices;  it  was  a  vital  economic  ques- 
tion and  still  is. 

Mr.  Saunders.  I  do  not  think  the  Secretaiy  misunderstood  the  way 
I  put  it,  and  I  do  not  imagine  any  other  gentleman  in  the  room 
misunderstood  the  way  I  put  it.  I  put  it  in  a  homely  way,  because 
that  is  really  the  heart  of  this  whole  matter.  I  did  not  say  the 
President  should  come  down  liere  and  address  Congress  and  say  here 
is  a  chance  to  buy  a  whole  lot  of  ships  and  this  is  the  time  to  jump 
right  in  and  do  it.  I  put  it  in  a  homely  way;  and  I  say  it  never 
was  suggested  to  us,  "  Now  by  reason  of  the  conditions  of  the  world, 
here  is  an  emergency  and  here  is  our  opportunity  to  buy  a  merchant 
fleet  at  a  very  great  advantage  by  reason  of  those  disastrous  con- 
ditions." I  will  put  it  that  way,  if  my  friend  from  Arkansas  prefers: 
but  I  do  not  think  it  advances  matters  any. 

The  Chairman.  Judge.  T  would  not  like  you  to  bind  me  by  your 
statement. 

Mr.  Saunders.  In  what  way? 

The  Chairman.  That  there  was  not  an  opportunity  to  buy  ships 
at  reasonable  prices  to  meet  this  emergency,  because  I  think  there 
was;  and  I  think  the  Secretary  of  the  Treasury  had  made  it  plain 
in  his  statement  before  this  committee. 

Mr.  Burke.  As  I  understood,  they  were  putting  up  the  bill  for  that 
purpose  on  the  floor  of  the  House.  They  said  we  wanted  to  pass  the 
bill  in  1914  for  the  purpose  of  buying  those  interned  ships;  they 
charged  us  with  that  on  the  floor  of  the  House. 

Mr.  Saunders.  The  Secretary  is  not  referring  to  interned  ships. 
Now,  do  not  let  us  interpolate  into  this  matter  outside  considerations 
like  that. 

The  Chairman.  As  I  understand  the  Secretary,  he  says  the  emer- 
gency is  just  as  great  as  it  was  then  for  the  Government  to  go  into  the 
insurance  business,  and  the  Government  went  into  the  insurance  busi- 
ness at  the  instance  of  the  very  people  who  afterwards  antagonized 
the  bill  to  provide  for  the  purchase  of  ships.  Now,  the  emergency  is 
just  as  great  and  as  difficult  to  meet,  and  yet  the  bill  is  antagonized  by 
the  same  interests  in  this  country.  In  the  other  instance  they  did  not 
antagonize  us  because  we  do  not  have  any  war-risk  insurance  com- 
panies in  this  country. 


324      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Secretary  McAdoo.  Yes.  Please  do  not  misunderstand  me  or  think 
that  I  am  reflecting  on  anybody;  I  am  just  telling  you  why  those  im- 
pediments ^Yere  put  in  the  way  of  one  great  emergency  measure  be- 
cause it  conflicted  with  private  shipping  interests. 

Mr.  Saundeijs.  I  am  not  reflecting  on  anybody;  I  am  just  talking 
about  those  conditions.  You  spoke  of  the  opportunity  to  purchase 
existing  at  that  time,  and  I  say  nobody  put  it  up  to  us,  as  far  as  I 
have  any  recollection,  as  a  distinct  emergency  proposition.  I  am 
through. 

The  Chairman.  I  do  not  suppose  we  would  have  bought  ships  just 
because  they  could  have  been  gotten  at  bargain-counter  prices,  just 
because  they  were  cheap,  without  any  use  for  them;  but  it  was  a 
matter  of  common  information,  then,  that  foreign  ships  could  be 
bought  at  not  to  exceed  $35  a  ton,  to  meet  this  emergency. 

Secretary  McAdoo.  Let  me  say  that  the  sole  purpose  of  the  bill 
presented  in  September,  1914,  was  to  enable  the  Government  to  meet 
a  very  grave  crisis  in  a  very  great  emergency  regardless  of  the  price 
of  the  vessels  at  that  time.  No  special  emphasis,  as  Judge  Saunders 
says,  was  laid  upon  the  fact  that  you  could  buy  vessels  cheap. 
Whether  they  could  be  bought  as  a  great  speculation,  or  not,  was  not 
material,  because  the  paramount  object  was  to  protect  the  vital 
interests  and  commerce  of  this  countiy,  and  that  was  the  inspiration 
and  purpose  of  the  bill. 

I  think,  Mr.  Chairman,  that  you  will  find  in  the  testimony  I  gave 
before  this  committee  in  September,  1914,  or  about  that  date — I  have 
forgotten  the  exact  date  of  the  hearing — that  I  referred  to  the  emer- 
gency confronting  the  country  and  said  that  it  must  be  dealt  with  "  in 
double-fisted  fashion,"  and  it  did  require  just  that  sort  of  treatment. 
It  was  an  emergency  that  needed  to  be  met,  whether  vessels  could  be 
bought  at  very  low  prices  or  not.  As  a  matter  of  fact,  the  reason  the 
prices  of  vessels  then  look  so  reasonable  now  is  because  prices  have 
since  gone  so  high.  I  do  not  think  anybody  realized  at  that  time 
that  the  price  of  vessels  was  particularly  low;  the  thing  that  was 
stressed  was  the  emergency  and  the  necessity  for  dealing  with  it 
immediately. 

Mr.  Saunders.  I  will  just  say  this  in  respect  to  myself,  that  if  a 
proposition  was  put  up  at  that  time  as  you  put  it  up  to  me  to-day. 
that  here  is  an  opportunity  for  the  Government  in  the  interest  of 
commerce  to  buy  a  large  merchant  marine  at  very  desirable  figures 
and  turn  it  over  to  American  shipowners,  to  sell  to  them  to  be 
utilized  for  American  commerce^  that  proposition  would  certainly 
have  had  an  ardent  supporter  in  me. 

Mr.  Byrnes.  In  response  to  a  question  of  Judge  Saunders,  as  to 
the  inducements  offered  to  a  man  who  leased  from  the  Government 
or  purchased  from  the  Government,  instead  of  from  an  individual 
owner,  you  stated  that  the  only  advantage  you  could  think  of  was 
the  reduced  interest  rate  the  Government  could  secure  by  reason  of 
its  superior  credit.  Do  you  not  think  there  would  also  be  this  advan- 
tage, that  the  individual  owner,  in  fixing  the  amount  of  his  rental 
or  of  his  selling  price,  would  take  into  consideration  the  profit  that 
he  would  demand,  and  that  that  profit  would  be  certainly  greater 
than  any  profit  that  might  be  demanded  by  the  Government  in  either 
leasing  or  selling? 


SHIPPING  BOARD,  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE.      325 

Secretary  McAdoo.  Yes;  that  is  an  element,  of  course.  I  was 
speaking  only  of  the  operator  who  took  the  ship  and  kept  it  and  did 
not  transfer  it.  Of  course  he  would  have  a  chance,  if  he  leased  a 
ship  from  the  Government,  to  recharter  and  to  capitalize  the  differ- 
ence in  the  rate  of  interest, 

Mr.  Byrnes.  I  do  not  think  you  quite  caught  my  point.  What 
Judge  Saunders  was  asking  you  was  what  inducement  would  be 
offered  an  individual,  in  the  first  instance,  to  make  a  lease  from  this 
proposed  shipping  board  of  a  vessel  instead  of  going  to  an  individual. 
He  was  discussing  it  from  the  standpoint  of  the  prospective  pur- 
chaser and  of  Avhat  inducement  he  would  have  to  go  to  your  ship- 
ping board  instead  of  going  to  an  individual,  and  in  enumerating  he 
went  on  talking  of  depreciation  and  insurance.  You  then  said 
that  the  advantage  the  shipping  board  would  have  to  offer  to  him 
would  be  the  reduced  rate  of  interest  the  Government  could  secure 
on  the  capital  invested.  But  do  you  not  also  think,  in  addition  to 
that  inducement,  that  the  Government  would  have  this  advantage, 
that  it  probably  would  not  demand  of  that  prospective  purchaser  or 
lessee  a  profit  as  great  as  that  which  would  be  demanded  by  the 
individual  ? 

Secretary  McAdoo.  Yes ;  that  is  undoubtedly  an  element. 

Mr.  Btrnes.  And  also,  from  the  standpoint  of  the  individual, 
he  asked  you  this:  If  it  would  not  be  a  disadvantage  for  an  individual 
to  lease  from  the  shipping  board,  for  this  reason :  That  under  this 
section  of  the  act — section  4: — in  case  of  war  the  vessel  could  be  taken 
over  by  the  Government  and  the  individual  would  be  paid  only  the 
fair  actual  value  in  normal  times;  whereas  another  owner,  who  did 
not  lease  or  purchase  from  the  shipping  board,  would  likely  receive 
a  high  price.  Do  you  think  that  the  shipping  board,  having  at  heart 
the  perfection  of  this  system,  would  be  lilvcly  to  pay  any  rival  at 
the  fair  market  value  and  to  pay  a  man  who  had  leased  or  purchased 
from  the  shipping  board  a  sum  less  than  that  which  it  paid  to  other 
owners  of  vessels  in  this  country? 

Secretary  McAdoo.  No;  of  course  not. 

Mr.  Byrnes.  Would  it  not  be  bound  to,  Mr.  Secretary  ? 

Secretary  McAdoo.  Not  by  design.  1  do  not  think  they  would 
wantonly  do  it  or  just  because  they  wanted  to;  but  they  might  pay 
less  for  the  simple  reason  that  they  have  a  right  to  establish  the  value 
of  that  vessel,  because  they  sold  it,  and  that  was  a  part  of  the  con- 
sideration of  the  sale,  whereas  with  the  ordinary  vessel  they  would 
not  have  any  such  right. 

Mr.  Byrnes.  And,  Mr.  Secretary,  that  is  what  I  am  coming  to. 
The  shipping  board  would  have  the  right  to  fix  that  value? 

Secretary  McAdoo.  Yes. 

Mr.  Byrnes.  Now,  I  am  asking  j^ou  whether  you  think  the  ship- 
ping board,  in  exercising  its  power  to  fix  the  value,  would  dis- 
criminate against  that  vessel  simply  because  it  did  have  that  power, 
and  to  give  the  owner  of  that  vessel  less  than  the  owner  of  a  vessel 
who  did  not  purchase  from  the  shipping  board? 

Secretary  McAdoo.  I  can  not  answer  the  question  as  you  put  it, 
Mr.  Bj'rnes,  for  this  reason :  The  board  has  the  power  to  fix  the  price 
of  the  vessel  in  case  it  is  sold  by  it;  but  it  has  not  the  right  to  fix 
the  price  of  a  vessel  sold  by  anybody  else. 


326      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Byrnes.  But  can  you  fix  that  price  at  less  than  that  you  were 
paying  for  other  boats? 

Secretary  McAdoo.  We  might  have  to  pay  more  for  other  boats 
because  we  could  not  determine  their  value ;  that  is  all  I  am  bringing 
out.  There  is  this  to  be  said  though,  as  to  the  reason  why  a  man 
would  buy  a  boat  from  the  shipping  board  in  preference  to  buying 
from  somebody  else  and  probably  paying  a  larger  price  for  it.  He 
could  afford,  perhaps,  to  pay  a  higher  price  in  order  to  get  immediate 
possession  of  the  vessel,  which  the  board  could  undoubtedly  turn  over 
to  him,  whereas  he  would  have  to  wait  to  have  it  constructed.  To 
that  extent  the  board  would  be  in  a  position,  at  times,  to  get  a  better 
price  for  its  vessel  than  would  otherwise  be  the  case. 

Mr.  Byrnes.  Do  you  not  think  in  time  of  war  the  Government 
would  have  certain  rights,  for  instance,  the  right  of  condemnation. 
I  know  it  could  not  do  so  now  if  they  purchased. 

Secretary  McAdoo.  I  think  Congress  could  undoubtedly  pass  such 
a  law-;  but  then  the  process  of  condemnation  would  require  a  very 
long  time,  and  it  could  apply  only  to  American  vessels. 

Mr.  Saunders.  I  did  not  say  disadvantages  to  the  Government, 
because  it  will  have  advantages  to  the  Government. 

Mr.  Byrnes.  I  undrstand  what  the  judge's  contention  was.  Would 
you  not  say,  Mr.  Secretary,  that  any  shipping  board  in  condemning 
a  boat  would  certainly  take  into  consideration  the  prices  established 
at  that  time  which  it  was  paying  to  other  owners? 

Secretary  McAdoo.  No ;  the  bill  says  "  with  reference  to  the  price 
in  normal  times." 

Mr.  Saunders.  If  they  did  that,  they  would  be  flying  right  in  the 
face  of  the  provisions  in  the  bill,  provisions  put  in  here  to  protect 
the  Government  being  imposed  upon  in  abnormal  times. 

Secretary  McAdoo.  I  think,  gentlemen,  a  great  deal  of  this  dis- 
cussion, if  you  will  excuse  me  for  saying  so,  as  to  the  probability 
or  possibility,  is  academic ;  because,  after  all,  we  are  bound  to  assume 
that  a  board  of  five  men,  patriotic  men,  who  have  any  sort  of  decent 
regard  for  the  responsibilities  of  their  oiRce,  would  unquestionably 
weigh  all  of  those  matters  carefully  and  act  with  some  degree  of 
justice,  wisdom,  and  intelligence.  I  think  it  stands  to  reason  that 
the  board  would,  in  those  circumstances,  weigh  the  situation  very 
carefully,  treat  each  case  upon  its  merits,  and  do  what  would  be 
manifestly  for  the  best  interests  of  the  country. 

Mr.  Burke.  Supposing,  Mr.  Secretary,  that  the  present  European 
war  could  be  brought  to  a  close  within  the  next  year,  or  about  a  year, 
what,  in  your  opinion,  are  the  prospects  of  then  obtaining,  by  pur- 
chase, at  a  reasonable  price,  vessels  to  be  controlled  by  the  shipping 
board  ? 

Secretary  McAdoo.  I  think,  undoubtedly,  if  the  board  wanted  to 
buy  anything  that  is  in  the  market,  it  could,  at  that  time  buy  ships 
at  lower  prices  than  it  could  buy  them  now. 

Mr.  Burke.  Then  do  you  think  this  is  about  the  right  time  to  pass 
such  a  bill  as  this  ? 

Secretary  McAdoo.  And  get  ready  for  it  ? 

Mr.  Burke.  Yes. 

Secretary  McAdoo,  I  think  it  is  a  good  time  to  get  ready  for  the 
conditions  we  have  to  face  in  the  future,  no  matter  what  they  may  be. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      327 

But  there  is  this  to  be  said  about  it:  You  take  the  steamships  of  the 
world  that  are  in  operation  to-day;  they  are  nearly  all  of  a  more  or 
less  obsolete  type.  Many  of  the  vessels  afloat  to-day  are  just  as  obso- 
lete as  the  mule-drawn  vehicle  is  compared  with  the  automobile. 
They  are  being  subjected  to  service  during  these  times  when  tonnage 
is  so  much  in  demand,  where  their  upkeep  is  nothing  like  as  efficient 
or  as  ample  as  it  ought  to  be,  and  therefore  the  depreciation  of  the 
vessels  is  far  greater  than  it  would  be  in  normal  times. 
^  The  Government  of  the  United  States  and  the  people  of  the  United 
States,  it  seems  to  me,  have  one  great  advantage  at  tliis  time.  Our 
error  in  not  having  built  a  merchant  marine  in  the  past  turns  out, 
paradoxical  as  it  may  seem,  to  be  to  our  advantage  in  the  present 
peculiar  circumstances,  because  we  can  now  build  a  new  type  of 
modern  vessel,  and,  on  the  basis  of  starting  anew,  create  a  merchant 
marine  that  will  be  more  efficient  than  that  which  any  other  nation 
on  earth  possesses.  We  have  not  got  to  scrap  all  the  old  stuff,  as  the 
other  nations  of  the  earth  will  have  to  do  before  they  start  on  a  new 
and  modern  basis.  I  think  this  bill,  if  it  is  passed,  will  not  only  con- 
solidate ample  powers  in  a  board  to  be  utilized  effectively  for  the 
benefit  of  the  American  people  in  demonstrating  the  practical  and 
economical  methods  of  building  up  a  merchant  marine  composed  of 
vessels  of  modern  types,  but  it  will  enable  the  United  States  to  get 
such  a  start  in  the  mobilization  of  a  fleet  of  efficient  vessels  of  up-to- 
date  construction  that  it  will  be  years  before  any  other  nation  can 
catch  up  with  us  in  the  contest  for  the  trade  of  the  world. 

Mr.  Curry.  I  have  one  or  two  questions  to  ask  the  Secretary,  and 
I  wish  to  say  that  I  am  not  approaching  this  matter  from  a  partisan 
standpoint. 

I  would  like  to  know,  Mr.  Secretary,  if  this  bill  is  intended  as  a 
temporary  emergency  measure  or  whether  it  is  intended  to  provide 
the  machinery  for  a  permanent  entering  into  the  merchant-marine 
business  by  the  Government? 

Secretary  McAdoo.  I  think,  so  far  as  my  view  of  the  bill  is  con- 
cerned, that  it  does  net  put  the  Government  into  the  merchant- 
marine  business  at  all,  either  temporarily  or  permanently.  The  Gov- 
ernment does  not  go  into  the  merchant-nuirine  business  under  this 
bill.  What  the  Government  does  is  to  authorize  this  board  to  con- 
struct and  purchase  a  reasonable  amount  of  naval  auxiliaries  for  the 
essential  needs  of  the  Xavy  of  the  United  States  and  as  an  essential 
part  of  the  preparedness  program.  In  order  that  these  ships  may 
not  lie  idle  and  rot  in  our  harbors,  and,  while  lying  idle,  prevent 
the  creation  of  the  essential  naval- reserve  personnel  which  Ave  must 
have  if  we  are  to  have  a  naval  reserve  at  all,  the  board  is  given 
the  power  to  do  three  things :  First,  to  lease  these  vessels  to  American 
citizens;  second,  sell  them  to  American  citizens,  reserving  the  right 
to  recall  them  in  case  of  need  for  naval  or  military  uses  and  under 
condHions  which  make  it  certain  that  we  can  put  our  hands  on 
them  instantly  and  have  efficient  naval  auxiliaries;  and,  third,  if 
they  can  not  either  sell  or  lease  them  advantageously,  then  the  United 
States  can  take  stock  in  a  corporation  which  will  put  into  operation 
some  of  these  ships  for  the  benefit  of  the  commerce  of  the  United 
States.  The  fear  that  there  may  be  Government  ownership  and 
operation  on  a  large  scale,  so  far  as  this  bill  is  concerned,  is  answered 


328      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINli. 

by  the  objection  made  by  some  of  the  opponents  of  the  bill,  viz, 
that  we  provide  so  little  tonnage  that  it  can  not  be  of  much  service 
in  any  case.  The  answer  to  that  is  threefold:  First,  if  that  is  true 
there  can  be  no  reasonable  fear  of  Government  competition ;  second, 
an  amount  of  tonnage  will  be  provided  that  will  be  of  advantage  to 
the  Navy  if  war  ever  overtakes  the  country;  and,  third,  enough  ton- 
nage will  be  created  to  contribute  materially  to  the  needs  of  this 
country  without  in  any  way  interfering  with  the  legitimate  oppor- 
tunity for  private  capital  on  the  high  seas. 

Mr.  CuRRV.  Do  you  imagine  or  do  you  think  that  Congress  will 
at  any  time  be  called  upon  to  appropriate  more  than  $50,000,000  for 
this  purpose? 

Secretary  McAdoo.  I  do  not  know.  I  do  not  see  any  need  for  it, 
unless  you  create  such  a  big  navy  that  at  some  time  in  the  future  you 
might  require  additional  auxiliaries  for  an  enlarged  navy. 

Mr.  Curry.  Have  you  any  assurance  that  private  capital  will  take 
this  minority  stock? 

Secretary  McAdoo.  I  have  not;  and  I  think  it  is  unlikely  that 
private  capital  will  take  the  minority  stock.  I  do  not  think  that 
that  is  an  essential  provision  of  the  bill.  The  only  reason  for  that 
provision  is  to  meet  the  objection  some  people  have  made  in  discuss- 
ing the  matter  with  me,  that  "  You  ought  not  to  refuse  to  give  pri- 
vate capital  an  opportunity  of  joining  with  the  Government  in  this 
undertaking."  My  own  idea  is  that  private  capital  Avill  not  join  in 
the  undertaking.  I  think  that  private  capital  ought  not  even  to  be 
asked  to  join  the  Government  in  constructing  these  essential  naval 
auxiliaries;  that  the  Government  can  afford  to  do  that  alone  and 
does  not  need  any  assistance. 

Mr.  Curry.  Then,  in  the  event  this  bill  is  passed,  the  Government 
has  $50,000,000  which  they  can  invest  in  the  construction  of  these 
ships  in  American  3'ards.  They  will  be  constructed  here,  because 
they  could  not  construct  them  abroad,  and  they  could  not  buy  with 
present  conditions.  Now,  the  Government  will  very  likely  not  be 
able  to  sell  them  or  to  lease  them,  and  then  they  must  run  them ;  and 
the  Government,  notwithstanding  the  fact  that  it  operates  through  a 
private  corporation,  still  owns  the  stock  and  is  directly  responsible 
for  the  losses  and  Avill  share  the  profits.  And  if  this  $50,000,000  is 
not  enough,  after  the  Government  has  gone  into  the  business  and 
makes  it  unprofitable  for  private  enterprise  to  carry  on  the  business. 
do  you  not  think,  under  those  conditions,  that  the  Government  would 
come  back  to  Congress  and  ask  Congress  for  further  appropriation? 

Secretary  McAdoo.  Of  course,  Mr.  Curry,  a  man  may  use  his 
imagination  and  conceive  any  kind  of  condition,  and  I  do  not  know. 
But  I  niust  say  I  would  prefer  to  look  at  it  this  wa3\  because  I 
think  it  is  the  more  reasonable  play  of  the  imagination.  As  a  result 
of  the  great  destruction  of  steamship  tonnage  by  the  war,  the  de- 
mand for  additional  tonnage  undoubtedly  is  going  to  be  very  great 
after  the  war  is  ended;  and  if  the  commerce  of  the  United  States  is 
going  to  be  increased,  and  certainly  as  an  economic  fact  it  is  going 
to  be,  then  this  Government  can  not  afford  to  sit  quietly  and  refuse 
to  provide,  even  in  some  small  measure,  these  instrumentalities  of 
commerce  that  are  essential  to  the  protection  and  expansion  of  our 
foreign  trade. 

Mr.  Curry.  I  recognize  that. 


dillPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      329 

Secretary  McAdoo.  I  believe  that  for  many  years  to  come  there 
will  be  no  difficulty  whatever  in  this  shipping  board  leasing  and 
selling  ships  upon  terms  advantageous  to  the  Government,  because 
of  conditions  in  the  shipping  world.  I  believe  also  that  if  the  Gov- 
ernment of  the  United  States  should  have  to  take  stock  in  a  corpora- 
tion which  will  operate  some  of  these  ships  to  South  America  and 
the  Orient,  for  the  protection  of  the  commerce  of  the  United  States, 
they  can  be  operated  profitably  for  many  years  to  come. 

And  I  would  like  to  call  attention  to  this  fact,  which  has  not  been 
put  into  the  record  up  to  this  time :  Congress  appropriated  $50,000 
for  holding  the  Pan  American  Financial  Congress  in  May,  1915. 
Eighteen  of  the  Latin-American  Governments  sent  delegates  to  that 
congress.  Some  of  them  were  represented  by  business  men  and 
bankers,  some  by  their  ministers  of  finance,  and  all  of  them  by  men 
of  the  most  distinguished  character  and  standing  in  their  respective 
countries.  As  a  result  of  that  conference — I  have  a  printed  volume 
of  the  proceedings  here,  so  that  you  can  see  that  a  great  deal  of  work 
was  done;  that  is,  from  the  looks  of  the  volume  [exhibiting  book] — 
it  was  the  unanimous  opinion  of  the  delegates  of  these  South  and 
Central  American  Governments  and  of  the  delegates  of  the  United 
States,  which  was  represented  by  prominent  business  men  and  finan- 
ciers, that  improved  ocean  transportation  facilities  were  a  "  vital  and 
imperative  necessity."  The  conference  unanimously  passed  this 
resolution : 

Resolved,  That  it  is  the  sense  of  this  conference  that  improved  ocean  trans- 
portation facilities  between  the  countries  composing  the  Pan  American  Union 
have  become  a  vital  and  imperative  necessity — 

The  Government  of  the  United  States  is  a  member  of  the  Pan 
American  Union — 

*  *  *  and  that  every  effort  should  he  made  to  secure,  at  the  earliest 
possible  moment,  such  improved  means  of  ocean  transportation,  since  it  is  of 
primary  importance  to  the  extension  of  trade  and  commerce  and  improved 
financial  relations  between  the  Pan  American  Republics. 

If  I  should  read  you  a  list  of  the  important  business  men  and 
financiers  of  America,  members  of  different  parties,  who  attended 
that  conference  and  who  voted  for  the  adoption  of  that  resolution, 
you  would  realize,  gentlemen,  that  the  best  thought  of  the  country — 
I  mean  the  best  thought  of  the  financiers  and  business  men  of  the 
country — agreed  as  to  the  importance  of  this  problem. 

Now,  due  to  a  lack  of  ships,  particularly  to  Chile  and  Peru  at  the 
moment,  the  prosperity  of  those  countries  is  seriously  menaced. 
Take  the  nitrate  trade  alone,  in  which  this  country  is  vitally  inter- 
ested— we  get  our  nitrates  very  largely  from  Chile — ocean  freight 
rates  have  advanced  to  an  extortionate  point  to  the  injury  of  the 
business  of  Chile  and  the  United  States  because  of  meager  steamship 
facilities. 

As  an  illustration  of  conditions  in  Peru,  I  quote  from  a  letter 
recently  received  by  Dr.  L,  S.  Rowe,  secretary  general  of  the  Pan 
American  Financial  Conference,  from  Dr.  Felipe  Pardo,  former 
minister  of  Peru  to  the  United  States  and  brother  of  the  present 
President  of  Peru : 

We  need  now,  before  anything  else,  transportation  and  financial  aid.  Our 
exports  are  in  the  ports,  and  our  creditors  are  asking  debts  which  we  have  no 
way  of  paying.     We  need  ships  and  loans. 


330      SHIPPING  BOARD^  NAVAL  AUXILIAEY,  AND  MEKCHANT  MARINE. 

In  this  connection  attention  is  also  called  to  the  following  press 
notice  officially  issued  by  the  State  Department  February  11,  1916 : 

The  Department  of  State  receives  reports  from  many  quarters  relative  to  the 
existing  sliortage  of  ocean-going  tonnage  to  move  freight  from  and  to  the  United 
States. 

It  appears  from  a  recent  dispatch  received  from  tlie  American  Embassy  at 
Santiago,  Chile,  that  ocean  freight  rates  on  the  west  coast  of  South  America 
have  attained  ahnost  prohibitive  figures.  Tliis  shortage  threatens  a  severe 
crisis  in  the  Cliilean  nitrate  industry,  and  its  effect  upon  the  Chilean  wheat- 
exporting  interests  is  most  adverse.  This  year's  wheat  crop  in  Chile  has  been 
exceptionally  good  and  the  foreign  demand  for  nitrate  is  heavy. 

The  American  consul  general  at  Auckland,  New  Zealand,  reports  that  trade 
between  New  Zealand  and  the  United  States  is  seriously  handicapped  by  lack 
of  shipping  accommodations. 

The  consul  general  considers  it  necessary,  in  order  that  American  exporters 
may  compete  for  business  in  New  Zealand  on  equal  terms  with  the  exporters 
of  other  countries,  that  American  interests  establish  at  least  one  first-class 
steamship  line  under  the  American  flag  which  would  maintain  a  regular  service 
to  ports  in  New  Zealand  and  Australasia  from  New  York  through  the  Panama 
Canal  and  from  San  Francisco. 

Reports  from  the  American  consulate  at  Aden,  Arabia,  reveal  a  severe  short- 
age in  shipping  tonnage  from  that  quarter  of  the  globe.  In  order  to  obtain 
cargo  space  on  the  steamers  of  the  British  India  Steam  Navigation  Co.  it  is 
necessary  to  pay  the  rate  from  Calcutta,  and  even  then  it  is  difficult  to  obtain 
accommodations  for  large  cargoes.  The  Italian  steamers  sailing  from  Mom- 
basa and  other  ports  on  the  east  coast  of  Africa  have  recently  increased  their 
rates  and  can  still  accommodate  only  a  part  of  the  freight  offered. 

The  conditions  on  the  east  coast  of  South  America  are  not  so  bad, 
but  they  are  bad  enough. 

No\v,  it  is  of  course  impossible,  even  if  this  bill  should  be  passed 
quickly,  to  do  anything  at  the  moment  that  would  immediately  re- 
lieve those  conditions  or  that  would  have  very  much  influence  upon 
them;  but  I  mention  them  to  show  you  the  urgent  need  for  these 
facilities  and  that  the  business  is  there  to  be  had  if  we  were  in  posi- 
tion to  take  it. 

Then  there  is  another  thing:  At  the  outbreak  of  the  European  war 
statistics  showed  that  the  trade  of  South  America  with  the  world 
aggregated  something  like  $700,000,000  per  annum.  Of  that,  the 
central  European  powers  had  approximately  $-200,000,000,  all  of 
which  has  been  lost  to  them  since  they  lost  command  of  the  seas. 
Great  Britain  had  a  very  much  greater  proportion  of  the  trade.  I 
will  insert  the  exact  figures  in  the  record  a  little  later.  The  United 
States  had  something  like  $166,000,000  only  of  that  trade,  although 
we  are  nearer  in  distance  and  we  are  better  able  to  furnish  what 
those  countries  want  than  are  the  European  countries.  Nevertheless, 
we  have  had  less  of  that  trade  than  our  leading  European  rivals. 

Now,  those  South  American  countries  are  crying  to  have  us  take 
that  trade;  they  are  suffering  for  the  lack  of  many  of  the  things 
they  have  been  buying  from  Europe.  I  could  cite,  if  I  had  the  time 
to  enumerate  them,  many  of  our  manufactured  products  which  they 
want  and  which  they  require,  but  which  they  can  not  get,  simply 
because  we  have  not  the  ocean-going  facilities  for  delivering  them. 

Gentlemen,  what  is  our  condition?  Do  we  want  simph'^  to  sit 
here  provincially  in  the  face  of  the  most  magnificent  opportunities 
that  have  ever  been  offered  to  this  country,  or  to  any  country  in 
the  world,  and  take  no  steps  because  we  are  afraid  that  we  may 
move  by  taking  a  step,  or  are  we  going  to  act  promptly  and  vigor- 
ously like  statesmen  and  like  a  nation  which  is  alive  to  its  obligations 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      331 

and  its  opportunities  and  is  willing  to  do  something  which  will  unite 
the  nations  of  the  Western  Hemisphere  into  a  great  economic  force 
and  increase  their  potentiality  for  maintaining  the  peace  of  the  world  ? 
Shall  we  sit  here  and  do  nothing  to  take  advantage  of  these  oppor- 
tunities as  we  have  up  to  the  present  time,  or  shall  we  go  forward 
using  the  great  powers  of  this  great  Government  to  enable  us  not 
only  to  do  the  things  imperatively  demanded  in  our  own  interest  but 
in  the  interest  of  the  people  of  Central  and  South  America,  who 
have  been  sorely  hurt  by  the  great  war  and  whose  future  progress 
and  prosperity  depend  in  large  measure  upon  our  enlightened  action  ? 

Mr.  Curry.  Private  capital,  Mr.  Secretary,  is  investing  in  an 
American  merchant  marine  just  as  rapidly  as  it  can  and  private 
capital  has  given  orders  for  ships  to  the  shipyards  for  from  two  to 
five  years  ahead.  The  shipyards  in  the  East,  in  the  United  States, 
are  working  overtime  and  they  have  orders  for  ships  that  will  take 
from  two  to  five  years  to  turn  out.  That  shows  that  the  American 
business  man  knows  an  opportunity  when  he  sees  it  and  that  he  is 
taking  advantage  of  it  to  the  best  of  his  ability.  He  can  not  buy 
abroad  and  he  must  build  at  home,  and  they  are  building  just  as 
rapidly  as  they  can.  Now,  do  you  not  think  the  enactment  of  this 
law  would  discourage  private  capital  from  investing  in  the  shipping 
business  ? 

Secretary  McAdoo.  I  can  not  see  that  it  would.  I  can  not  see  that 
it  would,  by  any  possibility.  Only  a  small  amount  of  tonnage  is  being 
provided  under  this  bill,  and  that  is  provided  primarily  as  essential 
naval  auxiliary  tonnage;  and  if  private  capital  to-day  can  afford  to 
take  the  risk  of  buying  ships  with  this  bill  impending  and  with  the 
enormous  prices  that  are  now  being  paid  for  ships,  then  how  is  it  any 
danger?  The  risks  do  not  seem  to  be  so  great,  either  the  possible 
passage  of  this  bill  or  the  high  prices  they  pay  for  ships,  as  to  deter 
private  capital,  according  to  your  statement,  from  entering  this  field. 
The  whole  purpose  of  this  bill  is.  and  I  believe  its  certain  effect  will 
be,  to  encourage  private  capital  and  to  protect  private  capital  that 
may  be  invested  in  the  shipping  business. 

Mr.  Curry.  $50,000,000  provided  in  this  bill  does  not  amount  to 
anything;  it  is  only  the  policy.  If  the  Government  is  going  to  lay 
down  the  policy  that  it  is  going  into  the  commercial  shipping  business, 
of  course  private  capital  would  be  foolish  to  engage  in  the  shipping 
business. 

Secretary  McAdoo.  Then  why  go  into  it  now  when  this  bill  is 
pending  ? 

Mr.  Curry.  Of  course  it  has  not  passed  3'et. 

Secretary  McAdoo.  That  is  true. 

Mr.  Curry.  On  another  line  of  matters  that  you  have  been  dis- 
cussing: The  only  interest  that  Great  Britain  has  in  the  Suez  Canal 
is  a  majority  stock  interest  in  a  private  corporation.  Now,  an  assault 
or  attack  on  the  Suez  Canal  is  considered  by  Great  Britain  and  by 
the  world  as  an  assault  on  sovereignty  as  well  as  an  assault  on  prop- 
erty. Yesterday  Admiral  Benson  was  asked  the  question  by  me  and 
by  Judge  Saunders  whether,  in  his  opinion,  one  of  the  ships  provided 
for  in  this  bill,  in  the  event  it  should  become  a  law,  was  picked  up 
by  a  belligerent  and  taken  into  a  prize  court,  would  it  be  considered 
in  the  light  of  an  unfriendly  act  and  would  be  more  likelv  to  cause 


332      SHIPPIXG  BOAED_,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

diplomatic  complications  between  our  Government  and  the  Govern- 
ment whicli  took  the  ship  into  the  prize  court,  than  it  would  if  they 
had  picked  up  a  ship  of  a  private  individual.  He  said  that  it  was  a 
very  delicate  question  of  international  law,  and  I  am  inclined  to 
agree  with  him.  The  only  trained  diplomats  that  we  have  in  the 
United  States  are  our  naval  officers;  they  are  trained  in  diplomacy. 
When  on  board  ship  and  when  abroad  they  represent  the  Govern- 
ment of  the  United  States  and  they  must  understand  international 
law  and  diplomacy.  It  would  be  my  opinion  that  possibly  there 
would  be  a  little  more  danger  of  having  trouble  if  one  of  these  ships 
is  taken  into  a  prize  court  than  it  would  be,  for  instance,  if  your  ship 
was  taken  into  a  prize  court. 

Secretary  McAdoo.  Your  question  implies,  Mr.  Curry,  that  a 
wrong  done  to  the  flag  of  the  United  States  would  involve  more 
danger,  if  the  owner  of  the  vessel  was  a  corporation  in  which  the 
United  States  owned  a  controlling  stock  interest,  than  if  the  wrong 
was  done  to  the  same  flag  floating  over  a  ship  owned  by  a  private 
citizen.  There  is  absolutely  no  difference  in  the  two  cases.  It  is  not 
a  question  of  who  owns  the  vessel,  it  is  the  affront  to  the  flag  or  the 
wrong  to  the  flag  that  the  Government  of  the  United  States  must 
redress,  and  it  does  not  make  any  difference  whether  a  citizen  owns 
the  sliip,  and  the  question  arises  through  that  channel,  or  whether 
a  corporation  in  which  the  Government  is  the  majority  or  sole  stock- 
holder is  the  owner  of  the  ship. 

Now,  I  would,  of  course,  take  Admiral  Benson's  opinion  on  any 
question  relating  to  the  Navy  or  the  construction  of  naval  vessels 
and  on  things  that  relate  to  his  profession ;  but  if  I  wanted  to  get  an 
opinion  on  international  law  I  should  hardly  go  to  an  officer  of  the 
Navy  unless  it  was  the  Judge  Advocate  General  of  Navy,  or  some  one 
whose  business  it  is  to  know  what  the  international  law  is.  I  think 
that  if  Admiral  Benson  had  read  this  provision  in  the  bill  he  never 
would  have  stated  that  even  a  delicate  question  could  arise. 

The  Chairman.  I  think,  Mr.  Secretary,  he  said  it  might  arise; 
but  I  think  he  disqualified  himself  from  speaking  as  an  expert. 

Secretary  McAdoo.  It  might;  but  I  think  if  he  had  read  this  pro- 
vision in  the  bill  he  would  have  said  at  once  that  no  such  question 
could  arise.  That  is  section  6,  and  I  should  like  to  repeat,  Mr.  Curry, 
that  provision: 

That  all  vessels  purchased,  chartered,  or  leased  from  the  board,  as  herein 
provided,  shall  be  registered  or  enrolled  under  the  laws  of  the  United  States  as 
vessels  of  the  United  States,  and  entitled  to  the  benefits  and  privileges  apper- 
taining to  vessels  of  the  United  States,  and  shall,  when  and  while  employed 
soley  as  merchant  vessels,  be  in  all  respects  subject  to  all  laws,  regulations,  and 
liabilities  governing  merchant  vessels — ■ 

That  is  international  law  as  well  as  our  OAvn  law — 

*  *  *  whether  the  United  States  be  interested  therein  as  owner,  in  whole 
or  in  part,  or  shall  have  or  liold  any  mortgage,  lien,  or  other  interest  therein. 

The  object  of  that  provision  is  to  divest  this  corporation,  because 
of  the  Government's  interest  in  it,  of  any  possible  attribute  of  sov- 
ereignty. The  seizure  of  a  ship  owned  by  such  a  corporation  would 
imperil  us  no  more  because  of  Government's  interest  therein  than  if 
the  issue  arose  out  of  the  seizure  of  a  ship  owned  by  a  private  citizen 
of  the  United  States. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      333 

Mr.  CuRET.  There  have  been  a  number  of  merchant  ships  taken 
into  prize  courts  since  the  beginning  of  this  war  and  those  matters 
have  not  been  settled  yet  to  the  satisfaction  of  the  country;  and  of 
course  if  they  had  been  owned  by  the  United  States  there  might  have 
been  a  little  more  trouble  about  it.    That  is  my  thought. 

Secretary  McAdoo.  I  can  not  see  it,  because  if  the  United  States  or 
any  other  Government  operates  a  vessel  in  commerce  as  a  merchant 
vessel,  she  is  absolutely  under  the  same  rules  of  international  law  as 
though  operated  by  an  individual.  Of  course,  if  it  is  a  naval  vessel 
tliat  is  another  proposition  and  different  rules  govern. 

jSIr.  CuRRT.  Do  you  suppose  the  American  people  would  not  feel 
it  was  more  of  an  offense  if  they  picked  up  a  ship  of  a  Government- 
owned  corporation  than  if  they  picked  up  my  ship  ? 

Secretary  McAdoo.  I  do  not  see  why  they  would.  I  think  we  are 
all  just  as  zealous  to  protect  the  flag  and  to  uphold  the  honor  of  the 
country,  no  matter  through  what  channel  it  may  be  challenged,  and 
I  can  not  see  that  we  would  be  any  more  threatened  because  some 
nation 

Mr.  Curry.  The  American  people  might  say  that  an  individual 
was  carrying  something  in  his  ship  that  he  ought  not  to  take  from  a 
port  in  the  United  States,  but  if  on  board  of  a  Government  ship  it 
would  be  a  different  proposition. 

Secretary  McAdoo.  Of  course,  there  is  a  very  wide  field  for  fancy 
there,  but  I  think,  Mr.  Curry,  it  would  be  very  easy  to  satisfy  our- 
selves on  questions  of  international  law  by  calling  experts  in  inter- 
national law. 

Mr.  Curry.  The  Pacific  Mail  was  referred  to  by  you.  The  Pacific 
Mail  was  transferred  for  two  reasons :  One  reason  was  that  railroad- 
owned  steamships  could  not  go  through  the  Panama  Canal,  and  the 
other  reason  was  that  Mr.  Schwerin,  for  a  good  many  years,  had  been 
trying  to  dispose  of  the  Pacific  Mail. 

Secretary  McAdoo.  That  was  my  understanding. 

Mr.  Curry.  A  good  many  years  ago  he  made  an  arrangement  to 
sell  the  Pacific  Mail  to  a  Japanese  line  which  runs  to  San  Francisco, 
and  Mr.  Schwerin  presented  the  proposition  to  Mr.  Harriman  and 
Mr.  Harriman  said,  "  I  won't  do  it;  I  am  too  good  an  American.  If 
I  sell  the  Pacific  Mail  to  the  Japanese  to-day,  Jim  Hill  would  sell 
his  to-morrow,  and  the  result  would  be  that  the  American  flag  would 
probably  be  eliminated  from  the  merchant  marine  of  the  Pacific, 
and  that  will  never  happen  during  my  lifetime."  That  was  a  good 
many  years  before  the  European  war  and  before  Mr.  Schwerin  sold 
the  ships,  and  Mr.  Harriman  was  dead  when  they  were  sold.  They 
are  still  under  the  American  flag.  They  were  transferred  from  the 
Pacific  to  the  Atlantic  because  there  is  more  profit  at  present  in  that 
trade. 

Mr.  Goodwin.  This  bill  has  evoked  some  criticism  by  its  opponents 
for  the  alleged  reason  that  the  $50,000,000  provided  for  in  the  bill 
for  the  purchase,  construction,  and  chartering  of  ships  would  prove 
to  be  inadequate  and  will  be  but  a  small  segment  of  what  we  hope  to 
be  the  complete  circle  of  an  adequate  auxiliary  to  the  Navy  or  in  the 
upbuilding  of  a  great  merchant  marine.  Now,  is  it  not  a  fact  that 
the  $50,000,000,  as  provided  for  in  the  bill,  may  be  used  not  only  for 
the  purchase  and  construction  of  ships,  but  when  those  ships  are 

32910—16 22 


334      SHIPPING  BOARD,  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE. 

sold  the  proceeds  arising  from  those  sales  may  be  again  used  in  the 
construction  and  purchase  and  sale  of  ships,  and  again,  and  again, 
and  again,  until  the  auxiliary  to  the  Navy  or  the  merchant  marine 
is  an  adequate  auxiliary  or  an  adequate  merchant  marine  ? 

Secretary  McAdoo.  I  do  not  think  so;  but  I  should  have  to  read 
the  provisions  of  the  bill  to  answer  your  question  definitely. 

Mr.  Thurman.  That  is  not  provided  for  in  the  bill  now. 

The  Chairman.  I  have  an  amendment  to  offer  providing  for  the 
reinvestment  of  funds,  but  that  is  not  contained  in  the  bill  now. 

Mr.  Goodwin.  That  was  the  final  scope,  I  thought,  of  the  bill, 
that  in  its  finality  the  funds  from  these  sales,  when  made,  could  be 
reinvested  as  the  emergencies  arose,  not  only  to  supply  auxiliaries  to 
the  Navy,  but  likewise  the  equipment  and  outfitting  of  a  merchant 
marine. 

Mr.  Hardy.  It  ought  to  be  that  w^ay,  but  it  is  not. 

Mr.  Goodwin.  I  supposed  that  was  the  intention  of  it;  because 
the  $50,000,000  of  course  would  not  be  but  a  small  segment  in  the 
circle,  and  would  prove  rather  inadequate;  but  in  the  evolution  of 
that  idea  in  the  sale,  resale,  and  purchase  and  repurchase  of  ships, 
the  entire  circle  might  be  completed. 

Secretaiy  McAdoo.  It  is  not  in  the  copy  of  the  bill  I  have ;  but  of 
course  that  is  a  matter  for  the  committee  to  determine. 

Mr.  Goodwin.  I  would  like  to  offer  that  amendment  at  the  proper 
time,  if  it  is  not  done,  or  would  like  to  have  the  chairman  do  it. 
Do  you  not  think  it  should  be  that  way,  Mr.  Secretary,  in  order  to 
meet  the  emergencies  as  they  arise,  just  the  same  as  when  a  man  goes 
into  business  with  a  capital  stock  of  $50,000?  He  turns  his  money 
over  three  or  four  times  in  a  3'ear,  and  therefore  his  business  is  ex- 
panded and  his  profits  increase,  and  it  is  in  the  evolution  of  things 
that  this  should  be  done,  if  we  expect  finally  to  have  an  adequate 
merchant  marine,  or  auxiliary  to  our  naval  fleet. 

Secretary  McAdoo.  I  say  in  the  copy  of  the  draft  that  I  have  I 
do  not  find  such  a  provision. 

Mr.  Goodwin.  Would  you  think  that  desirable? 

Secretary  McAdoo.  Personally,  I  do  not  see  any  objection  to  giving 
the  board  such  power;  but  it  is  a  question  for  the  committee  to  de- 
termine. 

Mr.  Goodwin.  There  should  be  a  discretion  in  the  board  to  make 
these  reinvestments  from  time  to  time  in  the  enlargement  of  the 
merchant  marine  and  naval  auxiliary. 

Secretary  McAdoo.  I  do  not  consider  it  essential,  Mr.  Goodwin; 
but,  as  I  say,  I  do  not  see  any  objection  to  the  board  having  such 
power. 

The  Chair]man.  I  have  this  amendment,  which  I  expect  to  offer 
at  the  proper  time: 

All  moneys  received  from  the  charter,  leasing,  or  selling  of  vessels  under  the 
control  of  the  board  may  be  used  by  the  board  in  the  purchase,  construction,  and 
chartering  of  other  vessels  of  the  class  and  kind  hereinbefore  described  for  the 
purposes  of  this  act. 

I  expect  that  amendment  to  be  offered  and  to  be  inserted  in  the 
proper  place  in  the  bill,  so  as  to  express  what  I  believe  to  be  proper. 

Mr.  Loud.  Just  a  question  on  one  point.  I  could  not  quite  see 
where  we  got  any  advantage  by  buying  ships  that  we  already  had  in 
the  American  trade — where  it  would  help  the  situation.    Then  you 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      335 

gave  me  the  illustration  of  the  locomotives.  Now,  if  the  25  locomo- 
tives that  you  bought  were  mostly  taken  from  another  railroad,  at 
the  same  terminal  that  was  trying  to  relieve  some  congestion,  it  would 
not  relieve  the  situation  any,  but  would  just  simply  take  out  of  one 
pocket  and  put  in  another  pocket.  And  it  seems  to  me,  in  the  steam- 
ship proposition,  if  you  attempt  to  buy  tonnage,  you  are  just  taking 
out  of  one  pocket  and  putting  into  another  pocket. 

Secretary  McAdoo.  That  is  just  exactly  what  I  said  you  should  not 
do.  ^Vhat  I  said  was  this — at  least,  what  I  intended  to  say  was  this — : 
That  while  the  argument  has  been  made  that  if  we  had  bought  a  lot 
of  ships  while  we  had  the  chance  we  would  not  have  added  to  the 
world's  tonnage,  3^et  it  is  true  that  if  we  had  bought  ships  of  foreign 
registry  and  added  them  to  our  tonnage  we  would  have  protected 
ourselves  to  that  extent. 

Mr.  Loud.  But  would  not  have  relieved  the  situation  any,  because 
they  were  already  working  in  the  same  trade. 

Secretary  McAdoo.  Not  at  all;  Ave  would  not  take  them  from  the 
same  trade  necessarily .  Suppose  they  were  operating  between  Great 
Britain  and  India,  for  instance.  Of  course,  you  could  not  have 
gotten  anj'thing  from  that  service,  but  suppose  they  had  been  oper- 
ated in  some  other  part  of  the  world. 

Mr.  Loud.  That  is  the  point  I  had  in  mind;  that  nine-tenths  of 
them  are  in  the  American  trade  and  only  occasionally  are  the  ships 
somewhere  else. 

Secretary  McAdoo.  AVliat  I  mean  is  this:  That  if  we  had  bought 
vessels  to  supplement  our  facilities,  and  even  if  we  had  taken  them 
only  from  foreign  flags,  so  that  we  could  have  controlled  them  our- 
selves and  operated  them  at  reasonable  rates  in  our  own  service,  we 
would  have  been  better  off  than  to  be  as  we  are  now,  subject  to  the 
limitations  and  vicissitudes  of  foreign  flags. 

Mr.  Loud.  I  am  afraid  we  can  not  agree  upon  that,  and  we  will 
pass  it  over,  because  I  can  not  see  where  we  would  gain  anything 
by  taking  tonnage  away  from  one  point  and  putting  it  in  Govern- 
ment ownership,  because  it  simply  takes  Government  money  and 
puts  it  into  ships,  and  the  other  man  has  the  money  instead  of  the 
ships. 

Secretary  McAdoo.  Suppose  you  had  bought  a  lot  of  ships  not  en- 
gaged in  our  service  at  all  and  had  them  in  our  service  now ;  that  is 
the  point  I  am  making. 

Mr.  Loud.  I  do  not  think  it  is  possible. 

Secretary  McAdoo.  Then  if  it  is  not  possible,  it  won't  be  done.  It 
was  possible  when  the  ship  bill  was  introduced  in  September,  1914. 

Mr.  Loud.  I  think  you  are  up  against  that  anyway.  I  can  go  with 
vou  on  the  purchase  of  ships  by  the  building  of  ships  where  you 
can  build  600,000  tons  with  the  $50,000,000.  That  seems  to  me  a 
very  desirable  proposition  if  we  must  go  to  that  phase  of  Government 
ownership.  But  there  is  also  something  more  immediate  than  that, 
in  the  use  of  the  surplus  Government  auxiliaries.  We  were  told 
yesterday,  by  Admiral  Benson,  that  we  needed  all  we  had  at  the  pres- 
ent time  and  in  time  of  peace.  Now,  I  would  expect  that  reply  from 
ever}^  naval  officer  that  came  before  us;  I  would  not  expect  them  to 
give  the  ships  up  willingly.  I  would  not  say  it  would  be  inten- 
tional, at  all,  but  it  is  in  the  atmosphere  that  they  would  like  to  hold 
on  to  all  of  them.    At  the  same  time,  if  the  power  to  take  those  ships 


336      SHIPPING  BOARD^  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

were  vested  in  a  commission  and  they  were  to  pass  upon  the  question 
of  whether  they  were  absolutely  necessary  to  be  used  in  the  Navy 
in  time  of  peace  or  to  be  taken  for  commercial  purposes,  I  suspect 
that  out  of  500,000  tons  which  is  available — or  not  available,  but 
which  is  controlled  by  the  Government — that  tw^o-fifths  of  that,  or 
at  least  200,000  tons,  could  be  taken  for  commercial  purposes  and  im- 
mediately relieve  to  that  extent  the  stress  on  our  shipping  and  on  our 
commerce ;  because  those  vessels  are  right  here  now,  in  the  ownership 
of  the  United  States. 

Secretary  McAdoo.  This  bill  provides,  as  you  know,  Congressman, 
that  all  those  naval  vessels  and  war  vessels — I  mean  the  Army  trans- 
ports— that  are  not  required  in  the  service  of  the  Army  or  Navy  in 
time  of  peace  shall  be  transferred  to  this  board  for  this  purpose. 
And  then  new  ships  that  are  to  be  built  are  under  the  control  of  this 
board. 

Mr.  Loud.  Under  whose  direction  are  they  to  be  taken  from  the 
Na  vy  ? 

Secretar}^  McAdoo.  They  are  to  be  transferred  upon  direction  of 
the  President  to  this  shipping  board  at  that  time  if  not  required,  and 
then  this  board  will  have  the  right  to  make  disposition  of  them. 
So  that  it  will  not  be  a  naval  problem  at  all ;  I  mean  to  say  the  con- 
trol here  is  not  lodged  exclusively  in  the  naval  staff,  but  it  is  lodged 
in  the  President  and  this  board. 

Mr.  Hardy.  If  this  bill  is  passed  and  the  Government  sees  proper 
to  endeavor  to  have  built,  sa}',  20  large  ships  at  one  time,  would  not 
that  at-  the  present  time  be  an  opportunity  for  the  shipbuilders  of 
this  country  to  start  in  on  a  type  of  vessel  and  to  enlarge  and  perfect 
the  shipbuilding  industry  of  the  United  States  in  a  measure  that 
has  never  been  offered  them  before? 

Secretary  McAdoo.  I  think  it  would.  The  New  York  Chamber 
of  Commerce  made,  as  I  understand  it,  an  investigation  a  short  time 
ago  of  the  possibility  for  additional  ship  construction  in  this  coun- 
try. And  it  was  reported  in  the  papers,  and  I  assume  it  is  correct, 
because  it  had  the  earmarks  of  being  so,  that  private  shipyards 
could  increase  their  facilities  30  per  cent  if  they  had  the  business. 
Now,  of  course,  it  is  perfectly  feasible  to  build  ships  in  our  ship- 
yards on  the  Great  Lakes  and  to  assemble  them  on  the  seacoast. 

Mr.  Loud.  Thev  build  them  verv  rapidlv  there;  thev  put  out  a 
10,000-ton  ship  in'  90  days. 

Secretary  McAdoo.  Yes.  That  can  be  done ;  and  you  must  remem- 
ber that  we  have  and  could  get  ready  the  navy  yards  in  this  country. 

Mr.  EowE.  You  can  not  get  a  10,000-ton  vessel  through  from  the 
Lakes. 

Secretary  McAdoo.  No  ;  but  you  can  build  and  ship  in  sections  to 
the  seacoast,  to  our  navy  yards.  I  suppose  Admiral  Benson  told 
you,  I  do  not  know,  that  we  have  a  number  of  navy  yards  in  which 
merchant  vessels  could  be  constructed — one  at  Portsmouth,  N.  H. ; 
one  at  Charleston,  S.  C;  another  at  New  Orleans;  and  there  is  the 
Brooklyn  Navy  Yard  and  the  Mare  Island  Navy  Yard;  also  one  in 
Puget  Sound  and  one  at  Pensacola,  Fla.  We  have  navy  yards  along 
both  coasts  where  they  could  assemble  merchant  vessels  certainly  at  a 
very  small  relative  expenditure  for  additional  facilities. 

Mr.  Greene.  Are  they  equipped  for  that  purpose? 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      337 

Secretary  McAdoo.  I  understand  that  not  a  great  deal  of  equip- 
ment would  be  necessary  if  the  machinery  and  the  material  was 
shipped  there  to  be  assembled  at  those  yards.  You  see  a  lot  of 
this  stuff  can  be  turned  out  in  the  interior  of  the  country  and  shipped 
and  assembled  on  the  seacoast. 

Mr.  Hardy.  I  can  not  explain  myself  exactly  or  get  exactly  the 
expression,  but  it  occurs  to  me  to  ask  you  if  the  present  conditions 
do  not  offer  an  opportunity  for  the  resurrection  and  the  reinfusion 
of  life  into  the  shipbuilding  industry  of  this  country  which,  with  a 
little  encouragement  by  the  Government  which  would  be  offered  by 
this  bill,  offering,  say,  twenty,  thirty,  or  forty  million  dollars  worth 
of  contracts  at  one  time;  would  it  not  put  the  shipbuilding  industry 
on  a  footing  and  place  it  far  in  advance  of  other  institutions  of 
like  kind  any  place  else  in  the  world  ?    That  is  the  vision  I  have. 

Secretary  McAdoo.  Unquestionably  and  one  of  the  hopes  I  have, 
as  a  result  of  the  passage  of  this  bill  is,  that  that  will  result. 

Mr.  Hardy.  That  looks  to  me  like  a  vision  that  is  worth  looking 
upon. 

Mr.  Greene.  That  would  be  a  vision  of  rather  substantial  subsidy. 

The  Chairman.  That  ought  to  make  you  favor  it  then,  Brother 
Greene. 

]\rr.  Greene.  No;  I  was  just  wondering  where  he  was  coming  to. 

Secretary  McAdoo.  It  is  just  as  essential  for  naval  preparedness 
and  naval  efficiency  that  you  have  enough  shipyards  and  3'ou  have 
got  to  have  them  built  up;  and  all  of  this  will  contribute,  in  my 
opinion,  to  the  upbuilding  of  that  industry  and  will  give  it  a  great 
impetus. 

ilay  I  ha\e  the  privilege,  when  I  look  over  the  stenographer's 
minutes  of  this  hearing,  of  attaching  certain  exhibits  that  I  have 
not  referred  to  here,  but  which  I  should  like  to  put  in  the  record  ? 
I  think  some  of  them  are  material  and  may  be  of  use. 

Mr.  Greene.  I  hope  there  will  be  no  objection. 

The  CHAiR:\rAN.  That  may  be  done,  without  objection. 

Secretary  McAdoo.  I  want  to  thank  you  very  heartily  for  listening 
to  me  with  so  much  patience. 

The  Chairman.  "We  are  very  glad  to  have  heard  you  and  are 
obliged  for  your  coming. 

(The  matter  referred  to  is  as  follows:) 

In  my  statement  before  the  committee  I  failed  to  bring  out  the  fact  that, 
as  matters  stand  to-day,  the  Government  has  no  power  of  regidation  or  control 
over  ocean  carriers.  They  may  increase  rates  when  and  as  they  please,  dis- 
criminate between  shippers,  and  practically  do  as  they  will  without  restraint. 
In  this  respect  the  producers  and  industries  of  this  country,  which  have  to 
depend  for  their  prosperity  upon  foreign  markets  for  the  disposal  of  their 
surplus,  are  more  at  the  mercy  of  the  steamship  companies  than  they  were  at 
the  mercy  of  the  railroads  of  this  country,  so  far  as  their  domestic  trade  is 
concerned,  before  the  passage  of  the  interstate  commerce  act.  This  condition 
must  be  dealt  with,  and  the  passage  of  this  bill  is  just  as  important  to  the 
people  of  the  United  States  as  was  the  passage  of  the  interstate  commerce  act. 
It  will  be  a  constructive  step  of  the  first  order. 

I  need  only  to  call  attention  to  the  extortionate  rates  of  freight  now  pre- 
vailing on  the  high  seas.  The  rates  on  cotton  between  leading  ports  of  the 
United  States  and  Liverpool  have  increased  from  one-quarter  and  one-half  a 
cent  a  pound,  prior  to  the  outbreak  of  the  European  war,  to  3  cents  a  pound. 
The  rates  on  grain  have  increased  from  4  and  5  cents  a  bushel  to  from  40  to 
50  cents  a  bushel.     The  rates  on  tobacco  are  being  compiled  and  will  be  fur- 


338      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Dished  as  soon  as  I  get  thein.  I  am  advised  that  these  rates  have  increased 
to  sucli  an  extortionate  point  as  to  seriously  liurt  tlie  tobacco  industry  in  this 
country.     The  lumber  industry  has  suffered  severely  for  the  same  reason. 

The  most  serious  aspect  of  our  situation  is  that  it  is  growing  worse  every 
day.  Rates  are  mounting  higher  and  higher  and  there  is  no  prosepct  for  im- 
mediate relief.  If  this  bill  is  passed  the  shipping  board  will  be  able  to  put 
into  service  some  Army  transports  and  Navy  craft  not  required  in  time  of 
peace,  and  this  will  help  the  situation  to  some  extent,  but  the  bigger  problem 
is  to  do  something  on  a  constructive  scale  in  the  way  of  legislation  which  will 
enable  us  to  make  a  beginning  and  to  build  steadily  and  surely  toward  the 
creation  of  a  great  merchant  marine. 

I  attach  as  Exhibit  No.  12  a  statement  showing  the  increases  in  ocean  freight 
rates  on  grain  and  cotton  from  leading  American  ports. 

The  growing  scarcity  of  ocean  tonnage,  due  to  the  destruction  of  merchant 
vessels  by  belligerent  nations,  and  their  withdrawal  from  merchant  service 
for  military  uses,  and  the  increasing  cost  of  ocean  carriage,  due  to  the  exorbi- 
tant and  extortionate  freight  rates  charged  by  ship  owners,  is  seriously  in- 
juring American  business,  and  no  one  can  study  this  problem  without  a  growing 
feeling  of  alarm  and  apprehension  for  the  future  of  our  export  trade.  A 
serious  decrease  in  our  export  trade  would  be  disastrous  to  our  prosperity. 

It  should  be  remembered  that  the  foreign  commerce  of  a  great  nation  like 
the  United  States  can  not  be  conducted  unless  American  citizens,  as  well  as 
American  products,  travel  on  the  high  seas.  Our  citizens,  having  business 
in  foreign  lands,  must,  for  the  protection  of  their  interests,  travel  frequently 
upon  the  high  seas.  Our  consular  and  diplomatic  officers  must  do  the  same 
thing  in  the  discharge  of  their  official  duty.  The  extent  to  which  citizens  of 
the  United  States  travel  is  shown  by  a  statement  from  the  United  States  De- 
partment of  liahor,  attached  as  Exhibit  No.  13,  from  which  it  will  be  seen  that 
for  the  seven  months  beginning  August,  1913,  and  ending  February,  1914,  the 
year  preceding  the  outbreak  of  the  European  war,  the  total  number  of  our  citi- 
zens arriving  from  Europe  was  128,748.  The  number  of  our  citizens  depart- 
ing for  Europe  for  the  same  period  was  113,158. 

For  the  corresponding  period  August,  1914,  to  February,  191.5,  immediately 
following  the  outbreak  of  the  European  war,  the  total  number  of  our  citizens 
arriving  from  Europe  was  117,039.  The  number  of  our  citizens  departing  for 
Europe  during  the  same  months  was  54,389. 

For  the  corresponding  period  Augiist,  1915,  to  February,  1916,  one  year  after 
the  outbreak  of  the  European  war,  the  total  number  of  our  citizens  arriving 
from  Europe  was  26,377.  The  number  of  our  citizens  departing  for  Europe 
during  the  same  months  was  33,435. 

It  is  fair  to  assume  that  the  26,377  citizens  arriving  from  Europe  and  the 
83.435  departing  for  Europe — total.  59,812 — between  August,  1915,  and  Febru- 
ary, 1916,  more  than  one  year  after  the  outbreak  of  the  European  war,  repre- 
sent approximately  the  number  of  our  citizens  who  had  to  travel  between  the 
United  States  and  Europe  on  business  or  from  necessity,  because  it  is  unlikely 
that  more  than  a  very  small  percentage  went  on  pleasure. 

Having  no  passenger  vessels  imder  the  American  flag,  with  the  exception  of 
the  few  ships  running  between  Liverpool  and  New  York,  a  great  majority  of 
our  citizens  are  compelled  to  sail  on  vessels  of  foreign  register.  Many  of  these 
vessels  are  under  the  flags  of  nations  engaged  in  the  great  war. 

Our  shipping  problem,  therefore,  does  not  relate  only  to  the  transportation 
of  cargoes,  but  it  relates  also  to  the  carriage  of  our  citizens  who  must  travel 
upon  the  high  seas  to  all  parts  of  the  world. 

I  attach  also,  as  Exhibit  No.  14,  a  brief  and  admirable  statement  from  Mr. 
P.  H.  W.  Ross,  president  of  the  National  Marine  League  of  the  United  States, 
of  some  of  the  reasons  why  a  merchant  marine  under  the  American  flag  is  so 
necessary. 


Exhibit  No.  1. 

[Senate  Report  No.  718,  Sixty-third  Congress,  second  session.] 

United  States  Navy  Mail  Lixes  Between  United  States  and  South  America. 

We,  the  undersigned  members  of  the  Senate  Committee  on  Naval  Affairs, 
recommend  the  passage  without  amendment  of  S.  5259,  being  a  bill  introduced 
by  Senator  Weeks,  entitled  "A  bill  to  establish  one  or  more  United  States  Navy 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      339 

raail  lines  between  the  United  States  and  South  America,"  and  being  the  bill 

recommended  for  passage  by  the  Secretary  of  the  Navy  in  response  to  Senate 
resolution  317. 

B.  R.  Tillman.  Moses  E.  Clapp. 

Carroll  S.  Page.  J.  R.  Thornton. 

Claude  A.  Swanson.  Miles   Poindextek. 

Geo.  C.  Perkins.  Chakles  F.  Johnson. 

N.  P.  Bryan. 

letter  from  the  secretary  of  the  navy  to  the  chairman  of  the  committee 
on  naval  affairs,  transmitting  certain  information  on  senate  resolution 
317  relatn-e  to  a  plan  for  the  establishment  of  a  line  of  ships  to  run 
between  the  cities  of  new  york  and  new  orleans  and  the  city  of 
valparaiso,  chile,  and  intermediate  ports,  together  with  a  draft  of  a 
proposed  bill  to  accomplish  the  same. 

[S.  Res.  317.] 

Mr.  Weeks  submitted  the  following  resolution ;  which  was  referred  to  the 
Conuuittee  on  Naval  Affairs : 
Whereas  it  is  desirable  to  develop  and  extend  commercial  relations  between  the 

United  States  and  the  countries  of  South  America  by  the  establisliment  of 

direct  lines  of  communication  for  carrying  the  United  States  mail  and  for  the 

transportation  of  passengers  and  freight ;  and 
Whereas  private  capital  has  not  engaged  in  this  service  to  a  sufficient  extent 

to  furnisli   facilities  comparable  to   those   enjoyed   by   the  people   of  other 

countries  having  trade  relations  with  South  America :  Therefore  be  it 

Resolved,  That  the  Secretary  of  the  Navy  be,  and  he  is  hereby,  directed  to 
cause  to  be  prepared,  in  detail,  a  plan  for  the  establishment  of  a  line  of  ships 
to  run  between  the  cities  of  New  York  and  New  Orleans  and  the  city  of 
Valparaiso,  Chile,  and  intermediate  ports,  to  consist  of  the  cruisers  Columbia 
and  ^Minneapolis  and  the  scout  cruisers  Salem,  Chester,  and  Birmingliam,  and 
that  the  information  requested  in  this  resolution  shall  include  the  following: 

First.  The  time  required  by  these  ships  to  make  a  round  trip  between  the 
ports  named. 

Second.  The  number  of  passengers  which  could  be  carried  in  each  ship  as 
now  equipped  or  with  any  changes  that  would  not  impair  their  usefulness  if 
required  in  the  naval  service. 

Third.  The  amount  of  freight  that  each  ship  could  carry  under  similar  condi- 
tions;  this  estimate  to  include  mail  as  well  as  freiglit. 

Fourth.  The  number  of  naval  officers  and  seamen  required  to  man  the  ships 
engaged  in  the  service  which  is  proposed. 

Fifth.  The  probable  cost  of  the  service,  including  the  pay  of  the  officers  and 
men  employed  in  connection  with  it  and  all  other  necessary  elements  such  as 
wharfage  in  the  cities  where  the  ships  would  touch,  fuel,  repairs,  and  main- 
tenance of  every  description. 

Sixth.  The  cost  of  such  necessary  changes  as  may  be  required  to  put  the  ships 
named  in  condition  for  such  service,  in  removing  unnecessary  military  equip- 
ment and  any  other  changes  necessary  in  order  to  carry  passengers  and  freight 
safely  and  to  adequately  perform  the  service  proposed  in  this  resolution. 

Seventh.  An  expression  of  opinion  by  the  department  as  to  whether  the  above- 
named  ships  can  be  used  for  such  purposes  without  impairing  their  usefulness 
for  naval  purposes  should  their  prompt  return  to  the  naval  service  be  required. 


Department  of  the  Navy, 

Office  of  the  Secretary, 
Washington,  April  11,  1914- 
Hon.  B.  R.  Tillman, 

Chairman  of  the  (lo)nmittee  on  Naval  Affairs, 

United  States  Senate. 
My  Dear   Senator:  1.  Referring  to   Senate  resolution  No.  317,   Sixty-third 
Congress,  second  .session,  I  have  the  honor  to  forward  to  your  committee  a  re- 
port embodying  the  information  requested. 

2.  It  is  practicable,  by  the  use  of  naval  vessels,  to  carry  out  the  purpose  indi- 
cateil  in  the  resolution,  and  the  following  vessels  will  be  available  for  the  service. 


340      SHIPPING  BOAED;  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

viz,  St.  Louis,  Charleston,  Milicaul:ec,  Columbia,  Minneapolis,  Salem,  Chester, 
Buffalo,  Rainboiv,  Ancon,  Cristobal,  Hector,  Mars,  Vulcan,  Cyclops,  and  Neptune 
(or  two  equally  good),  and  the  Nanshan. 

3.  The  St.  Louis,  Charleston,  Milwaukee,  Columbia,  and  Minneapolis  are 
fast  cruisers ;  the  Salem  and  Chester  are  fast  scout  cruisers ;  the  Buffalo  and 
Rainboiv  are  transports ;  the  Ancon  and  Cristobal  are  steamers  employed  by 
the  Panama  Railroad  Co.  to  be  turned  over  to  the  Navy  Department ;  and  the 
others  are  naval  colliers. 

4.  The  cruisers  are  suitable  for  carrying  only  a  small  number  of  male  pas- 
sengers— 15  to  20  each — ^and  could  not  be  fitted  for  carrying  bulky  freight  with- 
out interfering  materially  with  their  military  value;  but  they  could  carry  the 
mails  and  a  limited  amount  of  express  freight  and  parcels,  about  150  tons  each. 

5.  The  Buffalo,  Rainbow,  Ancon,  and  Cristobal  are  suitable  for  carrying  a 
limited  number  of  passengers  and  any  kind  of  freight :  Buffalo,  20  first-class 
passengers  and  4,000  tons  of  freight ;  Rainbotv,  25  passengers  and  2,500  to  3,000 
tons  of  freight;  Ancon  and  Cristobal,  each  74  first-class  and  32  steerage  pas- 
sengers and  between  10,000  and  11,000  tons  of  freight.  The  naval  colliers  are 
not  suitable  for  carrying  any  passengers,  but  are  well  adaptetl  to  a  freight 
service ;  the  first  three  carrying  6,500  to  10,000  tons  each ;  the  two  of  the  Cyclops 
class  10,000  to  12,500  tons  of  freight  and  2,900  tons  of  fuel  oil  in  bulk  each; 
and  the  Nanshan  about  3,000  tons. 

6.  The  distance  from  New  York  to  Valparaiso  via  Panama  and  Callao  is 
4,666  miles,  and  each  of  the  fast  cruisers  going  at  15  knots  could  cover  that 
distance,  allowing  24  hours  for  delays  incident  to  passage  through  the  canal, 
in  13  days  23  hours ;  or  make  one  round  trip  without  stop,  except  at  the  canal, 
in  27  days  22  hours. 

The  distance  from  New  Oideans  to  Valparaiso  via  Panama  and  Callao  is 
4,087  miles,  and  the  time  for  the  same  vessels  to  make  one  round  trip  without 
stop,  except  at  the  canal,  is  24  days  17  hours. 

The  distance  from  Panama  to  Valparaiso  via  Callao  is  2,652  miles,  and  the 
same  vessels  can,  at  15  knots,  cover  the  distance  in  7  days  9  hours,  or  make 
one  round  trip  in  14  days  18  hours. 

The  other  vessels  are  slower,  and  will  sustain  a  speed  of  12  knots,  except  the 
Nanshan,  which  can  be  counted  on  for  10  knots. 

7.  By  the  use  of  the  Charleston,  St.  Louis,  Columhia,  and  Minneapolis,  a  fast 
but  very  expensive  mail  service,  with  accommodations  for  a  limite(l  number  of 
male  passengers,  could  be  easily  maintained  between  Panama,  Guayaquil,  Mol- 
lendo,  and  A^alparaiso,  with  weekly  sailings  from  Panama.  A  far  less  expensive 
service  could  be  maintained  by  the  use  of  the  Salem,  Chester,  Columbia,  and 
Minneapolis.  These  stops  would  be  best  for  quick  deliveries  of  mails  to  the  South 
American  countries  on  the  west  coast  to  Argentina,  Bolivia,  Uruguay,  and  Para- 
guay. There  is  a  daily  railway  express  service  from  Valparaiso  to  Buenos  Aires 
and  Montevideo  via  the  Trans-Andean  Railway.  The  time  from  Valparai-so  to 
Buenos  Aires  by  rail  is  about  60  hours,  and  to  Montevideo  72  hours.  Allowing 
four  days  for  the  delivery  of  mails  from  New  Orleans  to  Panama,  and  11  days 
for  delivery  from  Panama  to  Valparaiso,  the  mails  from  the  United  States 
would  reach  Buenos  Aires  in  17*  days  and  Montevideo  in  18  days.  The  time 
from  Liverpool  to  Buenos  Aires  by  mail  steamers  running  in  connection  with 
the  Royal  Mail  Steam  Packet  Co.  is  22  day.s,  and  to  Montevideo  21  days,  on  a 
weekly  schedule.  From  New  York  to  the  same  ports  via  existing  lines  the 
time  is  24  and  23  days,  respectively,  with  a  weekly  schedule.  There  is  at  the 
present  time  a  weekly  mail  and  passenger  service  between  New  Oi*leans  and 
Colon.  If  it  should  be  found  desirable  to  run  the  mail  steamers  from  New 
Orleans  to  Valparaiso  it  could  be  done  by  the  addition  of  another  cruiser,  but 
at  very  greatly  increased  cost.  The  cost  of  running  each  vessel  is  given  in  the 
table  appended,  marked  "A." 

8.  A  passenger  and  freight  line  can,  in  addition,  be  maintained  between  New 
Orleans  and  Valparaiso,  and  a  freight  line  between  New  York  and  Valparaiso, 
making  such  ports  as  may  be  necessary ;  or  a  combination  freight  and  passenger 
service  and  a  freight  service  between  New  York  and  Valparaiso. 

For  a  service  from  New  Orleans,  the  Buffalo,  Rainbow,  Ancon,  and  Cristobal 
could  be  used,  insuring  a  sailing  every  14  days. 

In  addition,  a  freight  line  can  be  maintained  between  New  York  and  Val- 
paraiso, using  the  five  large  colliers,  which  would  insure  a  sailing  every  12  days. 

If  the  vessels  mentioned  above  for  the  New  Orleans  trade  were  combined 
with  the  freighters,  a  mixed  service  could  be  maintained,  which  would  insui-e 
a  steamer  from  New  Y'ork  every  seven  days. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      341 

The  Nanshan  might  be  useful  as  a  freighter  between  Panama,  Buenaventura, 
and  Guayaquil. 

9.  Due  to  the  engine  room,  fireroom,  and  bunker  construction  of  the  cruisers, 
a  large  number  of  men  is  required  in  the  engineering  department;  in  addition, 
these  vessels  are  great  coal  consumers  and  would  have  to  coal  both  on  the 
outward  and  return  voyages.  Since  continuity  and  regularity  of  mail  service 
would  be  essential,  it  would  be  necessary  to  maintain  at  some  point  on  the 
west  coast,  preferably  at  Callao,  either  ashore  or  afloat,  a  reserve  of  coal.  This 
need  could,  however,  be  easily  met. 

10.  The  personnel  that  would  be  required  for  the  ships  is  as  follows :  Colum- 
hia,  Minneapolis,  Salem,  and  Chester,  9  commissioned  and  G  warrant  officers 
and  202  men  each ;  Butfalo  and  Rainbow,  9  commissioned  and  6  warrant  ofiicers 
and  118  men  each ;  Ancon  and  Cristobal,  9  commissioned  and  6  warrant  officers 
and  135  men  each ;  Hector,  Mars,  and  Vulcan,  7  commissioned  and  6  warrant 
officers  and  117  men  each;  Cyclops  and  Neptune  (or  two  others  of  equal  ca- 
pacity), 7  commissioned  and  6  warrant  officers  and  134  men  each;  and  the 
Nanshan,  7  commissioned  and  6  warrant  officers  and  G9  men ;  a  total  of  114 
commi.ssioned  and  84  warrant  officers  and  2.002  men. 

11.  The  cost  of  changes  necessary  to  fit  the  vessels  for  the  proposed  service 
would  be  small.  For  the  Rainbow,  on  which  it  is  contemplated  installing  five 
additional  staterooms  at  a  cost  of  $2,000,  $3,000  would  be  required ;  and  $1,000 
for  each  of  the  other  vessels  would  probably  cover  the  cost  of  changes  proper. 
In  addition,  each  vessel  cari'ying  passengers  would  need  an  auxiliary  radio 
installation  required  by  law  for  passenger  ships.  This  would  cost  $2,000  for 
each  vessel,  and  the  total  cost  for  the  above  vessels  would  be  about  $32,000. 

12.  The  pay  and  subsistence  of  officers  and  men  to  man  the  14  ships  would 
be  about  $1,802,444,  and  the  maintenance  of  the  ships,  other  than  pay  and  sub- 
sistence, including  repairs,  docking,  and  supplies  of  all  kinds,  would  approxi- 
mate $1,774,250;  total,  .'?3,636.694. 

13.  The  probable  cost  of  the  shore  establishment  for  operating  the  lines  is 
difficult  to  estimate  at  this  time.  This  would  include  salaries  of  officers, 
agents,  clerical  force,  and  other  personnel,  terminal  facilities,  wharfage,  port 
dues,  rent  of  ofiices,  furniture,  and  other  expenses,  and  the  department  is 
making  an  investigation  to  determine  this  expense.  It  is  believed,  however, 
that  it  would  be  but  a  small  percentage  of  the  total  cost,  as  Government  ter- 
minal facilities  will  be  used  wherever  practicable. 

14.  The  expense  of  such  services  would,  of  necessity,  be  relatively  large,  due 
to  the  character  of  the  vessels  to  be  used  and  the  fact  that  they  must  be  kept 
in  condition  for  immediate  military  service  if  required.  It  should  be  remem- 
bered, however,  that  there  would  be  considerable  return  to  the  Government  in 
mail,  passenger,  and  freight  receipts. 

Retired  ofiicers  or  officers  on  the  reserve  list,  should  one  be  created,  would 
be  employed  in  the  service  as  soon  as  practicable,  and  under  such  conditions 
the  expense  involved  in  the  pay  and  subsistence  of  officers,  as  given  in  the  table, 
shoiild  be  reduced  by  three-fourths. 

When  it  is  considered  that  the  men  will  be  enlisted  men  in  the  Navy  and 
available  for  service  with  the  Navy  in  time  of  war,  the  actual  total  additional 
expense  for  personnel  for  14  shii)s  would  be  but  $151,244. 

15.  Should  the  department  be  authorized  to  establish  the  service  as  contem- 
plated in  the  resolution,  it  is  suggested  that  the  question  of  ships  to  be  used, 
ports  to  be  made,  schediUes,  etc.,  be  left  entirely  to  the  discretion  of  the  depart- 
ment, and  the  department  would  make  every  effort  to  carry  out  the  plan  suc- 
cessfully. In  so  doing  it  is  considered  best  to  inaugurate  the  business  by  estab- 
lishing a  fast  line  from  Panama  to  Valparaiso,  via  Callao  and  Mollendo,  and 
utilize  for  the  purpose  the  Columbia.  Minneapolis,  Salem,  and  Chester.  This 
mail  and  passenger  line,  in  connection  with  those  now  in  existence  from  New 
York  and  New  Orleans  to  Colon,  would  be  a  rapid-transit  route  between  the 
Unit'Ml  States.  Peru.  Bolivia,  and  Chile,  and  thence  via  the  Trans-Andean  Rail- 
way to  Argentina,  Uruguay,  and  Paraguay. 

It  is  not  deemed  wise  to  establish  at  the  beginning  a  schedule  that  would 
utilize  all  the  vessels  mentioned  as  available.  One  sailing  a  month  of  freighter 
or  passenger  vessel  from  New  York  and  New  Orleans  to  Valparaiso  and  inter- 
mediate ports  would  be  enough  for  a  beginning.  As  business  developed  other 
vessels  would  be  added  and  sailings  made  more  frequent,  as  the  traffic  war- 
ranted. 

The  Rainbow  or  Na'iisJian,  or  both,  as  the  traffic  warrant,  would  be  scheduled 
to  ply  between  Panama  and  Guayaquil,  Ecuador,  via  Buenaventura,  Colombia. 


342      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

These  would  carry  mails,  passengers,  and  freight,  and  act  as  feeders  for  our 
freighters  passing  through  the  canal  and  connecting  with  the  mail  lines  from 
New  Orleans  and  New  York. 

As  for  docks  and  terminal  facilities,  the  navy  yard  at  New  Orleans  is  well 
adapted  for  the  purpose,  and  the  New  York  yard  could  be  used  until  the  traffic 
warranted  renting  another  terminal.  The  cost  of  wharves  in  New  Orleans 
would  depend  upon  the  freight  handled  and  would  therefore  be  included  in  the 
freight  rates.  In  South  American  ports  practically  all  cargoes  are  handled  by 
means  of  lighters,  the  cost  of  which  would  be  included  in  the  freight  rates. 

Although  it  might  appear  that  the  cost  of  maintenance  of  the  four  cruisers 
of  the  fast  mail  line  from  Panama  to  Valparaiso  is  excessive,  this  is  not  so 
apparent  when  considered  in  connection  with  the  freighters.  One  is  necessary 
to  the  other  for  developing  the  South  American  trade,  and  the  average  cost 
should  be  taken.  The  freighters  would  begin  to  pay  for  themselves  at  once  by 
taking  coal  and  oil,  for  which  there  is  great  demand,  and  returning  with  general 
freight. 

16.  The  department  sees  in  the  plan  an  opportunity  for  a  twofold  advantage : 
First.  The  opportunity  for  developing  a  large  trade  with   South  America, 

which  is  not  practicable  for  private  vessels  under  the  United  States  flag. 

Second.  The  gradual  development  of  a  large  auxiliary  fleet  which  would  be 
necessary  in  time  of  war,  and  which  would  be  built  up  and  maintained  in  time 
of  peace  without  cost  to  the  Government,  as  it  will  pay  for  itself  after  having 
once  been  firmly  established. 

Should  the  development  of  the  business  warrant,  the  cruisers  used  in  this 
service  would  be  gradually  replaced  by  auxiliary  vessels  vastly  more  suitable 
and  economical  for  the  service  itself  as  well  as  for  the  use  of  the  Navy  in  time 
of  war. 

17.  The  approximate  cost  of  maintenance  of  the  ships  of  the  lines  proposed, 
for  beginning  the  service,  is  as  follows: 

1.  Fast  mail  service  from  Panama  to  Valparaiso,  using  the  ColumMa, 
Minneapolis,  Salem,  and  Chester: 

Pay  and  subsistence  of  officers  and  men per  annum $597, 120 

Maintenance,  including  repairs,  docking,  supplies  of  all  kinds, 

etc per  annum 790,  800 


Total 1,  387,  920 

2.  Rainbow,  plying  between  Panama,  Buenaventura,  and  Guayaquil : 

Pay  and  subsistence  of  officers  and  men 118,  840 

Maintenance,  including  repairs,  docking,  supplies  of  all  kinds, 

etc 81,  300 


Total 199, 140 

3.  Monthly  sailings  from  the  terminals,  New  York  and  New  Orleans, 
for  Valparaiso  and  intermediate  ports  would  cost,  on  the  average 
for  each  vessel  engaged  in  the  service,  as  follows : 

Pay  and  subsistence  of  officers  and  men 121, 160 

Maintenance,  including  repairs,  docking,  supplies  of  all  kinds, 

etc 100,  500 


Total 221,  660 

18.  Any  of  the  vessels  mentioned  for  this  service  can  be  so  employed  without 
Impairing  their  usefulness  for  naval  purposes  in  any  way,  shoiild  their  prompt 
return  to  the  naval  service  be  required. 

19.  In  indorsing  the  establishment  of  this  service  the  department  takes 
occasion  to  state  that  the  personnel  of  all  vessels  engaged  in  it  should  be  naval 
officers  and  enlisted  men  of  the  Navy,  and  it  will  be  necessary  to  increase  the 
number  of  men  at  present  allowed  by  law  by  the  number  of  men  required  for 
this  service. 

20.  The  draft  of  a  bill  which  would,  in  the  opinion  of  the  department,  meet 
requirements,  is  inclosed,  marked  "  B." 

JOSEPHUS  DaNIET.S. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      343 


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344      SHIPPIXG  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

A  BILL  To  establish  one  or  more  United   States  Navy  mail  lines  between    the  United 

States  and  South  America. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United  States 
of  America  in  Congress  assembled,  That  the  Secretary  of  the  Navy  is  hereby 
authorized  to  establisli  one  or  more  United  States  Navy  mail  lines,  by  employ- 
ing such  vessels  of  the  Navy  as  in  his  discretion  are  available  without  impair- 
ment to  the  paramount  duties  of  the  Navy  and  as  are  necessary  and  appro- 
priate, for  the  purpose  of  establishing  and  maintaining  regular  communication 
between  the  east  or  west  coast,  or  both  coasts,  of  the  United  States  and  either 
or  both  coasts  of  South  America.  The  vessels  so  employed  shall  carry  United 
States  mail,  passengers,  and  freight  under  such  regulations  and  at  such  rate 
or  rates  as  the  Secretary  of  the  Navy  may  prescribe.  Such  civilians,  such 
officers  of  the  naval  auxiliary  service,  and  such  officers  and  enlisted  men  of  the 
Navy,  including  officers  on  the  retired  list,  as  the  Secretary  of  the  Navy  may 
deem  necessary  shall  be  employed  in  the  business  of  the  said  mail  line  or  lines, 
and  retired  officers  of  the  Navy  so  employed  at  sea  or  on  shore  shall,  in  all 
respects,  be  held  and  considered  to  be  in  an  active  duty  status,  and  shall  receive 
the  pay  and  allowances  of  officers  of  the  active  list  of  the  same  rank  and  length 
of  service:  Provided,  That  officers  placed  on  the  retired  list  on  account  of 
wounds  or  disability  incident  to  the  service,  or  on  account  of  age,  or  after 
thirty  years'  service,  shall  not  be  ordered  to  such  duty  without  their  consent. 

The  enlisted  strength  of  the  Navy,  as  now  or  hereafter  authorized  by  law, 
is  hereby  increased  by  the  number  of  men  required  to  man  the  vessels  so 
employed,  and  the  Secretary  of  the  Navy  is  hereby  authorized  to  enlist  such 
number  of  men  in  the  Navy  for  such  terms  of  enlistment,  not  to  exceed  four 
years,  as  may  be  desirable,  and  to  distribute  the-  number  of  men  so  enlisted 
among  the  various  ratings  of  the  Navy. 

Sec.  2.  In  addition  to  and  as  a  part  of  the  line  of  the  Navy  there  is  hereby 
established  an  active  reserve  list.  Line  officers  placed  on  the  active  reserve 
list  under  the  provisions  of  this  act  shall  be  held  to  be  in  an  active-duty  status 
in  all  respects,  except  that  officers  on  the  active  reserve  list  shall  not  be  advanced 
on  the  active  reserve  list  except  for  eminent  and  conspicuous  conduct  in  battle, 
or  extraordinary  heroism,  when  their  advancement  thereon  for  these  causes 
shall  be  governed  by  the  provisions  of  law  governing  the  advancement  of 
officers  on  the  active  list  for  like  causes.  All  laws  now  in  effect  with  reference 
to  the  retirement  of  officers  from  the  active  list  are  hereby  extended  to  include 
officers  on  the  active  reserve  list. 

Sec.  3.  Sections  eight  and  nine  of  the  act  approved  March  third,  eighteen 
hundred  and  ninety-nine,  entitled  "An  act  to  reorganize  and  increase  the  effi- 
ciency of  the  personnel  of  the  Navy  and  IMarine  Corps  of  the  United  States," 
as  amended  by  the  act  approved  August  twenty-second,  nineteen  hundred  and 
twelve,  entitled  "An  act  making  appropriations  for  the  naval  service  for  the 
fiscal  year  ending  June  thirtieth,  nineteen  hundred  and  thirteen,  and  for  other 
purposes,"  are  so  far  amended  that  officers  who  hereafter  volunteer  or  are 
selected  for  retirement  as  therein  provided  shall  be  held  and  considered  to  have 
volunteered  for  transfer  to  the  ^ctive  reserve  list,  or  shall  be  selected  for 
transfer  to  the  active  reserve  list,  respectively ;  and  the  transfer  of  such  officers 
to  the  active  reserve  list  in  lieu  of  their  retirement  shall  be  made  subject  to 
the  restrictions  imposed  bj'  the  provisions  of  the  said  sections  as  ameniled. 

Sec.  4.  In  addition  to  such  part  of  existing  appropriations  as  may  be  avail- 
able for  the  expenses  of  operating  the  line  or  lines  herein  provided  for,  the 
sum  of  $100,000  is  hereby  appropriated,  to  be  paid  out  of  any  money  in  the 
Treasury  of  the  United  States  not  otherwise  appropriated,  to  be  expended  in 
the  discretion  of  the  Secretary  of  the  Navy  for  the  purpose  of  organizing, 
inaugurating,  and  carrying  on  the  traffic  provided  for  in  this  act  and  in  defray- 
ing the  operating  expenses  incident  thereto :  Provided,  That  all  money  received 
for  the  transportation  of  mail,  passengers,  and  freight,  as  provided  in  section 
one  of  this  act,  and  for  such  other  services  as  may  be  incident  to  the  operation 
of  the  said  line  or  lines,  is  hereby  made  available,  in  addition  to  the  aforesaid 
sum  of  $100,000  herein  appropriated,  for  expenses  incident  to  the  proper  conduct 
of  the  business  contemplated  in  this  act:  Provided,  further.  That  any  sum  of 
money  herein  appropriated  which  remains  unexpended  at  the  end  of  the  third 
fiscal  year  offer  the  passage  of  this  act,  and  at  the  end  of  each  fiscal  year 
thereafter,  shall  be  covered  into  the  Treasury  of  the  United  States. 


SHIPPING  BOAED,  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE.      345 

Exhibit  No.  2. 

[S.  5259,  Sixty-tliird  Congress,  second  session.] 

.\  BILL  To  establish  one  or  more  United  States  Navy  mail  lines  between  the  United  States 

and  South  .\merica. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
States  of  America  in  Congress  assembled,  That  the  Secretary  of  the  Navy  is 
hereby  authorized  to  establish  one  or  more  United  States  Navy  mail  lines,  by 
employing  such  vessels  of  the  Navy  as  in  his  discx'etion  are  available,  without 
impairment  to  the  paramount  duties  of  the  Navy,  and  as  are  necessary  and 
appropriate,  for  the  purpose  of  establishing  and  maintaining  regular  communi- 
cation between  the  east  or  west  coast,  or  both  coasts,  of  the  United  States  and 
either  or  both  coasts  of  South  America.  The  vessels  so  employed  shall  carry 
United  States  mail,  passengers,  and  freight  under  such  regulations  and  at  such 
rate  or  rates  as  the  Secretary  of  the  Navy  may  prescribe.  Such  civilians,  such 
officers  of  the  naval  auxiliary  service,  and  such  officers  and  enlisted  men  of  the 
Navy,  including  officers  on  the  retired  list,  as  the  Secretary  of  the  Navy  may 
deem  necessary  shall  be  employed  in  the  business  of  the  said  mail  line  or  lines, 
and  retired  officers  of  the  Navy  so  employed  at  sea  or  on  shore  shall,  in  all 
respects,  be  held  and  considered  to  be  in  an  active  duty  status,  and  shall 
receive  the  pay  and  allowances  of  officers  of  the  active  list  of  the  same  rank 
and  length  of  service :  Provided,  That  officers  placed  on  the  retired  list  on 
account  of  wounds  or  disability  incident  to  the  service,  or  on  account  of  age, 
or  after  thirty  years'  service,  shall  not  be  ordered  to  such  duty  without  their 
consent. 

The  enlisted  strength  of  the  Navy,  as  now  or  hereafter  authorized  by  law,  is 
hereby  increased  by  the  number  of  men  required  to  man  the  vessels  so  em- 
ployed, and  the  Secretary  of  the  Navy  is  hereby  authorized  to  enlist  such  num- 
ber of  men  in  the  Navy  for  such  terms  of  enlistment,  not  to  exceed  four  years, 
as  may  be  desirable,  and  to  distribute  the  number  of  men  so  enlisted  among  the 
various  ratings  of  the  Navy. 

Sec.  2.  That  in  addition  to  and  as  a  part  of  the  line  of  the  Navy  there  is 
hereby  established  an  active  reserve  list.  Line  officers  placed  on  the  active  re- 
serve list  under  the  provisions  of  this  act  shall  be  held  to  be  in  an  active  duty 
status  in  all  rspects,  except  that  officers  on  the  active  reserve  list  shall  not  be 
advanced  on  the  active  reserve  list  except  for  eminent  and  conspicuous  conduct 
in  battle,  or  extraordinary  heroism,  when  their  advancement  thereon  for  these 
causes  shall  be  governed  by  the  provisions  of  law  governing  the  advancement 
of  officers  on  the  active  list  for  like  causes.  All  laws  now  in  effect  with  refer- 
ence to  the  retirement  of  officers  from  the  active  list  are  hereby  extended  to 
include  officers  on  the  active  reserve  list. 

Sec.  3.  That  sections  eight  and  nine  of  the  act  approved  March  third,  eighteen 
hundred  and  ninety-nine,  entitled  •'  An  act  to  reorganize  and  increase  the  effi- 
ciency of  the  personnel  of  the  Navy  and  ^larine  Corps  of  the  United  States,"  as 
amended  by  the  act  api)roved  August  twenty-.second,  nineteen  hundred  and 
twelve,  entitled  "  An  act  making  appropriations  for  the  naval  service  for  the 
fiscal  year  ending  June  thirtieth,  nineteen  hundred  and  tliirteen,  and  for  other 
purposes,"  are  so  far  amended  that  ofiicers  who  hereafter  volunteer  or  are 
selected  for  retirement  as  therein  provided  shall  be  held  and  considered  to  have 
volunteered  for  transfer  to  the  active  reserve  list,  or  shall  be  selected  for  trans- 
fer to  the  active  reserve  list,  respectively ;  and  the  transfer  of  such  officers  to 
the  active  reserve  list  in  lieu  of  their  retirement  shall  be  made  subject  to  the 
restrictions  imposed  by  the  provisions  of  the  said  sections  as  amended. 

Sec.  4.  That  in  addition  to  such  part  of  existing  appropriations  as  may  be 
available  for  the  expenses  of  operating  the  line  or  lines  herein  provided  for, 
the  sum  of  $100,000  is  hereby  appropriated,  to  be  paid  out  of  any  money  in  the 
Treasary  of  the  United  States  not  otherwise  appropriated,  to  be  expended  in 
the  discretion  of  the  Secretary  of  the  Navy  for  the  purpose  of  organizing,  inau- 
gurating, and  carrying  on  the  traffic  provided  for  in  this  act  and  in  defraying 
the  operating  expenses  incident  thereto :  Provided,  That  all  money  received  for 
the  transportation  of  mail,  passengers,  and  freight,  as  provided  in  section  one 
of  this  act,  and  for  such  other  services  as  may  be  incident  to  the  operation  of 
the  said  line  or  lines,  is  hereby  made  available,  in  addition  to  the  aforesaid 
sum  of  $100,000  herein  appropriated,  for  expenses  incident  to  the  proper  con- 
duct of  the  business  contemplated  in  this  act :  Provided  further,  That  any  sum 


346      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

of  money  herein  appropriated  which  remains  unexpended  at  the  end  of  the 
third  fiscal  year  .after  the  passage  of  tliis  act,  and  at  the  end  of  each  fiscal  year 
thereafter,  shall  be  covered  into  the  Treasury  of  the  United  States. 


Exhibit  No.  3. 

Extract  from  the  annual  report  of  the  Director  of  the  Bureau  of  War  Risk 
Insurance,  submitted  to  Congress  December  7,  1915 : 

[1,297  policies  issued  from  Sept.  2,  1914,  to  Nov.  30,  1915.] 

Total  amount  insured $93, 190,  052.  00 

Premiums  received  on  same 2, 194,  454.  22 

Salvage  received  to  date 48, 143.  68 

Total  amount  at  risk 8,  331,  205.  00 

Known  losses  to  date 744, 128.  00 

Possible  outstanding  claims l 250,000.00 

Net  losses  (paid) 695,984.32 

Total  expenses  of  bureau,  Nov.  30,  including  salaries  of  entire 

force 22,  033.  50 

Total  premiums  received 2,194,454.22 

Known  losses  to  date $744,128.00 

Less  salvage  received 48, 143.  68 

Net  losses  paid 695, 984.  32 

Surplus  premiums  on  hand 1,498,469.90 


Exhibit  No.  4. 

[Debate  in  Senate  Mar.  26,  1914,  on  Senator  Weeks's  resolution    (S.  Res.  317).] 

TRADE    WITH    SOUTH    AMERICA. 

Mr.  Weeks.  I  submit  a  resolution,  which  I  ask  to  have  read  and  given 
immediate  consideration. 

The  Vice  President.  The  resolution  will  be  read. 

The  Secretary  read  the  resolution  (S.  Res.  317),  as  follows: 
"  Whereas  it  is  desirable  to  develop  and  extend  commercial  relations  between 
the  United  States  and  the  countries  of  South  America  by  the  establishment 
of  direct  lines  of  communication  for  carrying  the  United  States  mail  and 
for  the  transportation  of  passengers  and  freight ;  and 
"  Whereas  private  capital  has  not  engaged  in  this  .service  to  a  sufficient  extent 
to  furnish  facilities  comparable  to  those  enjoyed  by  the  people  of  other 
countries  having  trade  relations  with  South  America :  Therefore  it  is 

"  Resolved,  That  the  Secretary  of  the  Navy  be,  and  he  is  hereby,  directed 
to  cause  to  be  prepared  in  detail  a  plan  for  the  establishment  of  a  line  of 
ships  to  run  between  the  cities  of  New  York  and  New  Orleans  and  the  city  of 
Valparaiso,  Chile,  and  intermediate  ports,  to  consist  of  the  cruisers  Columbia 
and  Minneapolis  and  the  scout  cruisers  Salem,  Chester,  and  Birmingham,  and 
that  the  information  requested  in  this  resolution  shall  include  the  following : 

"  1.  The  time  required  by  these  ships  to  make  a  round  trip  between  the  ports 
named. 

"  2.  The  number  of  passengers  which  could  be  carried  in  each  ship  as  now 
equipped  or  with  any  changes  that  would  not  impair  their  usefulness  if  required 
in  the  naval  service. 

"  3.  The  amount  of  freight  that  each  ship  could  carry  under  similar  condi- 
tions ;  this  estimate  to  include  mail  as  well  as  freight. 

"  4.  The  number  of  naval  officers  and  seamen  required  to  man  the  ships 
engaged  in  the  service  which  is  proposed. 

"  5.  The  probable  cost  of  the  service,  including  the  pay  of  the  officers  and 
men  employed  in  connection  with  it,  and  all  other  necessary  elements,  such  as 
wharfage  in  the  cities  where  the  ships  would  touch,  fuel,  repairs,  and  mainte- 
nance of  every  description. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      347 

"  6.  The  cost  of  such  necessary  changes  as  may  be  required  to  put  the  ships 
named  in  condition  for  such  service,  in  removing  unnecessary  military  equip- 
ment, and  any  other  changes  necessary  in  order  to  carry  passengers  and 
freight  safely  and  to  adequately  perform  the  service  proposed  in  this  resolution. 

"  7.  An  expression  of  opinion  by  the  department  as  to  whether  the  above- 
named  ships  can  be  used  for  such  purposes  without  impairing  their  usefulness 
for  naval  purposes  should  their  prompt  return  to  the  naval  service  be  required." 

Mr.  SwANSON.  I  hope  the  Senator  from  Massachusetts  will  consent  to  have 
the  resolution  go  to  the  Committee  on  Naval  Affairs. 

Mr.  Weeks.  Before  that  is  done  I  should  like  to  make  a  few  comments  on 
the  resolution.  Perhaps  the  Senator  from  Virginia  after  I  have  done  so  will 
be  willing  to  have  the  resolution  adopted  without  going  to  the  committee. 

Mr.  President,  at  the  present  time  South  American  mails  are  sent  at  long 
and  sometimes  irregular  intervals,  and  all  American  mails  south  of  the 
Equator  are  carried  in  vessels  sailing  under  a  foreign  flag.  It  is  the  purpose 
of  this  resolution  to  call  for  the  information  which  it  is  believed  will  justify 
using  fast  cruisers  of  the  Navy  as  a  mail  line  to  Valparaiso  via  the  Panama 
Canal.  These  ships  are  of  two  types,  the  second-class  cruisers  Columbia  and 
Minneapolis,  carrying  light  batteries,  having  a  trial  speed  of  about  23  knots, 
and  the  scout  cruisers  BinninghnnK  Chester,  and  Salem,  without  substantial 
batteries,  having  a  trial  speed  ranging  from  24*  to  26^  knots  an  hour.  These 
vessels,  especially  the  three  scout  cruisers,  are  not  built  for  fighting  purposes, 
but  are  in  the  time  of  war  the  eyes  of  the  fleet,  furnishing  information,  which 
their  great  speed  will  enable  them  to  do.  In  time  of  peace  they  are  not  useful 
ships,  because  they  have  not  the  guns  which  would  make  them  available  for 
training  purposes. 

At  this  time  our  mail  service  to  Brazil,  Argentina,  and  Uruguay  is  carried 
by  the  Lamport  &  Holt  Line,  which  makes  regular  sailings  from  New  York, 
or  by  other  steamers  which  are  temporarily  available  for  that  purpose — most 
of  the  mail  being  carried  by  the  Lamport  &  Holt  Line — the  other  ships  used 
in  this  service  being  those  of  the  Prince,  Norton,  Houston,  Barber,  and 
American-Rio  Plata  Lines.  Many  of  those  companies  are  subsidiary  to  the 
English  Royal  Mail  Line,  and  it  is  believed  that  the  Lamport  &  Holt  Line  is 
controlled  by  that  company.  Our  mails  to  the  west  coast,  after  reaching  the 
Isthmus,  are  forwarded  to  their  destination  by  a  weekly  service  iinder  the 
terms  arranged  by  the  Universal  Postal  Convention.  At  present  some  mails 
for  Argentina  and  Uruguay  are  sent  by  this  route,  but  the  service  is  very 
slow,  and  this,  it  may  be  easily  assumed,  militates  against  the  development 
of  our  trade  with  South  America. 

It  takes  at  the  present  time  7  days  to  carry  the  mail  to  the  Isthmus  and 
from  22  to  24  days  to  deliver  it  at  Valparaiso,  the  shortest  time  being  at  least 
22  days,  and  a  proportional  time  to  Guayaquil,  Ecuador,  which  is  900  miles 
south  of  Panama,  and  Callao,  Peru,  which  is  1,400  miles  south  of  Panama,  is 
required.  By  using  the  vessels  of  the  Navy  which  I  have  mentioned  and 
running  them  at  a  15-knot  speed,  which  is  an  economical  rate  for  them  to 
make,  they  would  carry  substantially  coal  enough  so  that  by  replenishing  their 
supply  at  Valparaiso  and  recoaling  at  Panama  they  could  make  the  trip  from 
New  York,  stopping  at  the  Isthmus  and  Callao,  in  about  13  days,  or  mail 
could  be  delivered  in  Valparaiso,  Buenos  Aires,  and  Montevideo  from  7  to  9 
days  quicker  than  ran  be  done  either  by  the  east  or  west  coast  routes. 

It  is  believed  these  vessels  could  without  any  considerable  expense  be  ar- 
ranged to  carry  a  considerable  number  of  first-class  passengers,  and  the  amount 
of  freight  which  they  could  carry  would  probably  be  sufflcient  to  pay  the  ex- 
penses of  the  line  from  the  beginning.  I  am  opposed  to  Government  ownership 
of  transportation  lines,  and,  generally  speaking,  in  my  judgment  the  Govern- 
ment is  the  least  economical  and  in  many  cases  the  least  effective  business 
agency.  If  later  on  private  capital  undertakes  the  building  and  running  of  a 
line  of  steamers  over  this  route,  I  should  be  inclined  to  withdraw  the  Govern- 
ment line,  on  the  theory  that  it  is  unwise  to  put  the  Government  in  competition 
with  private  capital  in  such  service ;  but  that  is  a  matter  which  may  be  properly 
considered  when  the  service  is  once  established  and  we  are  assured  of  our 
legitimate  share  in  South  American  trade. 

We  are  in  the  position  of  having  spent  $400,000,000  in  the  building  of  a 
canal,  one  of  the  reasons  for  doing  so  being  that  it  would  aid  in  the  extension 
of  our  foreign  trade;  but  as  far  as  I  know  there  are  no  American  steamers 
prepared  to  undertake  this  service.  From  Panama  south  there  is  a  Chilean,  a 
Peruvian,  and  an  English  line,  the  latter  controlled  by  the  Royal  Mail.    English 


348      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

and  German  shipping  interests  are  alive  to  the  possibilities  to  be  derived  from 
the  opening  of  the  canal.  They  linow  that  if  they  once  secure  lines  of  trade 
that  it  is  difficult  for  others  to  successfully  get  into  the  same  field.  I  am  in- 
formed that  the  English  Government  has  very  recently  increased  the  subsidy 
to  the  Royal  Mail  Line  $300,000  a  year  for  the  express  purpose  of  extending 
and  developing  this  particular  service ;  and  as  we  are  not  prepared  to  cover 
the  field  in  any  other  way  and  this  Government  owns  ships  which  are  not 
useful  for  any  other  purpose  in  time  of  peace,  why  not  use  them  in  developing 
such  a  trade?  It  seems  to  me  that  we  might  fairly  be  criticized  if  we  fail 
to  authorize  this  line  and  have  it  ready  for  operation  the  day  the  canal  opens. 

At  the  present  time  the  foreign  trade  of  Ecuador,  Peru,  and  Chile  amounts  to 
$340,000,000.  The  eastern  ports  of  the  United  States,  by  way  of  the  canal, 
will  be  several  days  nearer  this  trade  than  are  our  commercial  rivals.  We  at 
the  present  time  control  about  30  per  cent  of  the  trade  of  Ecuador,  less  than 
25  per  cent  of  the  trade  of  Peru,  and  less  than  15  per  cent  of  the  trade  of 
Chile.  Great  Britain  and  Germany  control  the  larger  part  of  the  balance.  The 
trade  of  either  of  these  nations  with  Chile  amounts  to  more  in  dollars  and 
cents  than  our  total  trade  with  the  Pacific  coast  nations  of  South  America. 
If  this  fast  mail  line  were  established,  it  would  undoubtedly  very  greatly  de- 
velop our  business  in  the  important  ports  of  Montevideo  and  Buenos  Aires, 
which  are  less  than  two  days  by  railroad  from  Valparaiso.  Argentina  and 
Uruguay  have  a  foreign  trade  amounting  to  much  more  that  a  billion  annu- 
ally, that  of  Argentina  alone  being  more  than  $900,000,000.  We  obtain  an  in- 
significant part  of  this  trade,  compared  with  what  we  might  have  if  we  had 
better,  more  frequent,  and  quicker  connections.  I  should  add  that  the  steamers 
running  from  New  Orleans  will  make  the  run  to  Valparaiso  about  two  days 
quicker  than  from  New  York,  which  might  be  important  in  the  delivery  of 
freight,  if  not  so  important  in  the  mail  service,  and  it  may  be  desirable  to  run 
steamers  alternately  from  New  York  and  New  Orleans  if  this  line  is  established. 

All  this  possibility  is  an  attractive  picture,  and  it  will  be  a  long  step  in  the 
development  of  our  trade  in  South  America  if  we  take  prompt  action  to  firmly 
establish  this  line  of  steamers.  It  would  be  an  inspiring  thought  for  the 
A^merican  people  that  a  ship  flying  the  American  flag,  carrying  American  mail, 
passengers,  and  freight,  will  be  ready  and  waiting  at  the  Atlantic  gates  of  the 
canal  to  continue  her  trip  to  the  western  ports  of  South  America — the  first 
merchant  ship  to  pass  through  the  canal. 

I  hope  the  Senator  from  Virginia  will  not  object  to  the  adoption  of  the 
resolution. 

Mr.  SwANSoN.  Mr.  President,  first  I  desire  to  suggest  an  amendment  to  the 
resolution.  I  should  like  to  include  the  cities  of  New  York,  Norfolk,  and  New 
Orleans.     I  should  want  to  have  Norfolk  included  in  any  estimate  made. 

Mr.  Weeks.  Mr.  President,  I  have  not  intended  in  the  resolution  to  refer 
sijecifically  to  cities  of  this  country.  I  should  say,  generally  speaking,  that  it 
might  be  wise  to  have  these  ships,  if  the  line  is  established,  run  alternately 
from  New  York  and  from  New  Orleans.  I  want  to  state  to  the  Senator  from 
Virginia  that  it  was  not  my  purpose  or  my  thought  that  this  line  should  start 
fr(>ra  Boston.  I  am  looking  at  it  from  the  larger  national  standpoint  rather 
than  the  local  standpoint. 

Mr.  SwANSON.  I  should  like  to  say,  in  that  connection,  that  so  far  as  Nor- 
folk is  concerned  it  is  not  from  any  local  standpoint  that  I  view  it.  Great  lines 
of  railroad  concentrate  there  from  the  West  and  South.  There  is  as  large  a 
territory  covered  by  Importations  meeting  at  Norfolk  as  at  almost  any  city  that 
you  could  name ;  but  this  shows  the  necessity  and  the  wisdom  of  having  this 
resolution  referred  to  the  committee  to  determine  to  what  extent  and  where 
the  investigation  should  be  directed.  This  is  confined  to  specific  vessels ;  it 
might  be  found  better  to  get  information  including  others,  and  I  hope  the  Sena- 
tor from  Massachusetts  will  consent  that  the  resolution  go  to  the  Naval  Com- 
mittee, so  that  it  may  be  properly  prepared  so  as  to  suit  all  sections  of  the 
country. 

I  wish  to  say  that  I  am  not  opposed  to  obtaining  the  information  desired.  I 
favor  it.  I  should  like  to  have  it  obtained  and  to  have  the  report  of  the  depart- 
ment upon  it,  and  I  wish  to  have  the  resolution  broad  enough  to  cover  the 
various  phases  that  many  Senatoi's  would  like  to  have  included  in  the  informa- 
tion furnished. 

Mr.  Gallinger.  If  the  Senator  will  permit  me.  I  will  say  that  in  the  efforts 
heretofore  made  to  secure  legislation  in  reference  to  the  rehabilitation  of  the 
merchant  mai'ine  the  bills  always  provided  that  the  ships  shoiild  at  least  touch 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.       349 

at  ciM-taiii  Simtli  Atlantic  and  Gulf  ports.  This  resolution  could  doubtless  be  so 
frani(>(l  that  th(>ro  would  be  no  discrimination,  as  there  ought  not  to  be.  If  a 
shij)  slioidd  start  from  New  York,  there  is  no  reason  why  it  should  not  touch 
at  Norfolk,  I  apprehend. 

Mr.  SwANsoN.  That  was  my  object  in  desiring  to  have  the  resolution  re- 
ferred, because  I  thought  that  it  would  save  time  to  have  the  investigation  and 
report  made  so  as  to  include  the  different  ports. 

Mr.  Gallinger.  I  do  not  object  to  the  reference  of  the  resolution,  of  course, 
but  I  will  venture  to  express  the  hope  that  the  Conuuittee  on  Naval  Affairs  will 
take  it  up  promptly,  because  it  is  important  that  when  we  open  this  great  water- 
way the  American  flag  should  he  seen  on  some  merchant  ships  engaged  in  the 
foreign  trade,  and  particularly  in  the  trade  with  South  and  Central  America. 

Mr.  SwANSON.  I  should  be  very  glad  to  have  this  information,  and  I  am  satis- 
fied that  the  Naval  C(munittee  would  not  object  to  obtaining  it ;  but  the  resolu- 
tion ouglit  to  be  so  drawn  as  to  include  all  sections  of  the  country  and  all 
phases  of  this  matter.  I  hope  the  Senator  will  consent  to  have  tlie  resolution 
referred. 

Mr.  Weeks.  The  resolution  as  presented  is  as  broad  as  the  country.  There  is 
no  attempt  being  made  to  limit  its  oj^eration  to  any  particular  section  of  the 
country.  It  is  simply  a  resolution  asking  for  information.  I  have  no  desire  to 
prevent  the  resolution  being  considered  by  the  Naval  Affairs  Committee,  if  it 
seems  best  that  that  .should  lie  done,  but  if  we  are  going  to  take  the  action 
which  I  wish — that  is,  to  have  this  line  ready  for  operation  on  the  day  the 
Panama  Canal  is  open  for  business — then  there  should  be  no  considerable  delay. 
The  distinguish.ed  chairman  of  the  Naval  Committee  is  present,  and  I  will  say 
that  I  hope,  if  it  be  decided  to  i-c-fer  the  resolution  to  his  connnittee,  that  we 
may  have  as  much  expedition  sis  possible  in  reporting  it  out,  so  that  the  depart- 
ment may  take  up  the  investigation  which  will  be  made. 

It  will  be  necessary,  in  order  to  prf)perly  undertake  this  work,  that  the  resolu- 
tion be  referred  to  the  Department  of  Commerce  and  also  to  the  Post  Office 
Department  to  ascertain  the  extent  of  the  mail  and  the  trade  which  may  de- 
velop and  may  be  available  at  once  to  assist  in  making  the  line  profitable.  It 
will  take  time  to  do  it.  I  am  desirous  that  there  shall  be  no  unreasonable 
delay. 

I  am  not  at  all  solicitous  about  the  port  from  whicli  these  ships  shall  sail  or 
the  ports  A\here  they  shall  touch.  I  had  much  rather  leave  that  to  those  who 
are  going  to  operate  the  line. 

Mr.  Jones.  I  wish  to  ask  the  Senator  a  question. 

The  Vice  Pki-.sident.  Does  the  Senator  from  Massachusetts  yield  to  the 
Senator  from  \\'ashington? 

Mr.  Weeks.   I   yield. 

Mr.  Jones.  I  desire  to  ask  the  Senator  whether  the  resolution  calls  for  in- 
formation as  to  the  possibility  or  the  feasibility  of  having  this  line  touch  at  a 
point  on  the  Pacific  coast? 

Mr.  Weeks.  The  Pacific  coast  of  South  America? 

Mr.  Jones.  Yes. 

Mr.  Weeks.  That  is  exactly  what  is  intended ;  that  it  is  to  run  from  the  east 
coast  of  the  United  States  to  Panama,  to  go  through  the  Panama  Canal,  and 
down  the  west  coast  of  South  America,  touching,  presimiably,  at  Guayaquil,  in 
Ecuador,  and  at  Callao,  in  Peru,  and  certainly  having  for  its  terminus  Val- 
paraiso, in  Chile. 

Mr.  Jones.  What  I  meant  was  the  Pacific  coast  of  the  United  States? 

Mr.  Weeks.  It  would  not  in  anv  way  affect  the  Pacific  coast  of  the  United 
States. 

Mr.  Jones.  Could  we  not  have  information  as  to  a  line  from  some  point  on 
the  Pacific  coast  of  the  United  States  to  the  eastern  coast  of  South  America, 
going  through  the  Panama  Canal? 

Mr.  Weeks.  I  have  no  objection  to  that  information  being  obtained,  Mr. 
President. 

Mr.  .Tones.  But  it  would  not  be  obtained  under  this  resolution? 

Mr.  Weeks.  It  would  not  be. 

Mr.  SwANSON.  Mr.  President.  I  am  satisfied  that  the  Naval  Committee  will 
consider  the  resolution  very  promptly  We  desire  this  information.  I  do ;  I 
desire  the  investigation  and  information  to  be  broad,  but  if  we  are  going  to 
do  anything  of  tills  kind,  it  ought  to  include  more  than  simply  what  is  con- 
tained in  the  resolution.     I  hope,  therefore,  that  the  Senator  from  Massachu- 

329K)— 16 2;$ 


350      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

setts  will  consent  to  the  reference  of  the  resolution,  and  I  am  satisfied  the 
Naval  Committee  will  promptly  report  upon  it. 

Mr.  Weeks.  I  desire  to  call  the  attention  of  the  Senator  from  Virginia  to 
the  fact  that  we  are  limited  in  wliat  we  do  to  the  ships  which  we  have  avail- 
able for  this  purpose.  We  could  not  put  on  steamship  lines  from  every  port  in 
the  United  States  to  every  port  in  South  America  or  the  Orient  or  Australasia. 
We  must  limit  ourselves  to  probably  the  most  profitable  route  and  the  route 
which  will  enable  us  to  take  advantage  of  the  building  of  the  Panama  Canal. 

Mr.  SwANsoN.  Mr.  President,  that  is  true,  but  it  seems  to  me  that  all  the 
different  routes  proposed  should  be  investigated  and  the  various  seaport  cities 
ought  to  liave  an  opportunity  to  present  their  claims  to  Congress,  so  that  full 
information  may  be  obtained.     That  is  all  I  ask. 

Mr.  Bkistow.  Mr.  President 

Tlie  Vice  President.  Does  the  Senator  from  Massachusetts  yield  to  the  Sena- 
tor from  Kansas? 

Mr.  Weeks.  I  yield. 

Mr.  Beistow.  May  I  ask  for  the  reading  of  that  part  of  the  resolution  which 
Indicates  where  these  ships  are  to  sail  from? 

Mr.  NoRRis.  I  ask  that  the  entire  resolution  may  be  read. 

The  Vice  President.  The  Secretary  will  again  read  the  resolution. 

The  Secretary  again  read  the  resolution  submitted  by  Mr.  Weeks. 

Mr.  Bristow.  Mr.  President 

The  Vice  President.  Does  the  Senator  from  Massachusetts  yield  to  the  Sena- 
tor from  Kansas? 

Mr.  W^EEKS.  I  yield  to  the  Senator  from  Kansas. 

Mr.  Bristow.  Mr.  President,  I  would  suggest  that  the  Senator  modify  his  reso- 
tion,  so  far  as  naming  the  cities  of  New  York  and  New  Orleans  is  concerned, 
and  say  "  cities  or  ports  on  tlie  eastern  or  western  coast  of  the  United  States 
and  South  American  ports."  That  will  leave  the  door  open  to  everybody  to 
make  a  showing,  and  then  the  resolution  will  not  liave  to  go  to  the  Committee  on 
Naval  Affairs. 

Mr.  SwANsox.  Mr.  President,  I  have  an  idea  that,  if  the  resolution  is  referred 
to  the  Committee  on  Naval  Affairs,  we  could  ascertain  what  ports  it  would  be 
advisable  to  have  these  boats  sail  from,  and  the  committee  could  prei)are  a 
resolution  that  would  be  more  specific  than  the  one  now  before  the  Senate, 
and  one  wliicli  would  cover  every  port  that  might  be  suggested.  There  are 
hundreds  of  little  ports  along  the  Atlantic  and  Pacific  coasts  all  of  which,  of 
course,  could  not  very  well  be  considered  in  this  connection,  but  if  the  resolu- 
tion were  referred  to  the  Committee  on  Naval  Affairs,  those  interested  could 
prepare  a  resolution  that  would  be  broad  enough  to  cover  all  phases  of  the 
question. 

Mr.  Bristow.  Mr.  President,  certainly  the  Senator  from  Virginia  wouM  not 
make  the  resolution  any  broader  tlian  to  include  the  eastern  and  western 
coasts  of  the  United  States  and  tlie  western  coast  of  South  America.  If  the 
Committee  on  Naval  Affairs  should  undertake  to  investigate  these  commercial 
matters,  they  would  be  at  it  a  year.  Tlie  proposition  of  the  Senator  from  Mas- 
sachusetts is  to  utilize  the  commercial  vessels  which  the  Navy  owns  and  make 
them  of  some  practical  use  to  the  people  of  the  United  States;  and  it  seems  to 
me  when  Senators  begin  to  haggle  about  whether  the  ships  shall  run  from 
New  York  or  Baltimore  or  Washington  or  Norfolk  or  Newport  News,  or  some 
other  port,  we  are  belittling  the  whole  proposition.  I  <lo  not  expect  any  of 
these  ships  to  run  from  any  of  the  ports  in  Kansas  [laughter],  but  I  am  very 
much  in  favor  of  this  resolution.  I  do  not  care  whether  the  ships  sail  from 
New  York  or  Norfolk. 

Mr.  SwANSON.  Mr.  President,  if  the  Senator  will  permit  me,  it  will  be  prac- 
tically impossible  for  the  Navy  Department  to  conduct  an  investigation  cover- 
ing every  port  in  the  United  States.  That  would  involve  delay ;  it  would  be 
impossible  to  get  the  information  in  time  to  be  of  practical  use;  but  the  in- 
vestigation ought  to  cover  such  ports  as  are  available  for  this  purpose.  Tlie 
object  of  having  the  resolution  referred  to  the  committee  is  to  secure  the  in- 
formation regarding  the  different  ports  of  the  country,  so  as  to  cover  every- 
thing, and  not  to  have  it  restricted.  It  is  usual  for  resolutions  of  this  char- 
acter to  be  referred  to  the  committee.  I  wish  to  say,  speaking  for  myself, 
that  I  am  in  favor  of  a  prompt  report  on  the  resolution  and  in  favor  of  obtain- 
ing the  information,  and  I  hope  the  Senator  from  Massachusetts  will  consent 
that  the  resolution  mav  be  referred  to  the  Committee  on  Naval  Affairs. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      351 

Mr.  Tillman.  Mr.  President,  if  the  Senator  from  Massachusetts  will  accept 
my  jissunince,  I  will  promise  him  that  the  Committee  on  Naval  Affairs  will 
consider  the  resolution  promptly  and  report  it  promptly.  As  naval  vessels  are 
Involved,  I  think  the  Secretary  of  the  Navy  and  the  Committee  on  Naval  Affairs 
ouglit  to  he  consulted  in  reference  to  the  matter  and  that  the  resolution  should 
he  referred  to  that  committee. 

Mr.  WiiEKS.  Of  course,  Mr.  President,  the  resolution  would  go  e\entually 
to  the  Secretary  of  the  Navy  ;  hut,  with  the  assurance  given  by  the  chairman 
of  the  Committee  on  Naval  Affairs,  I  am  willing  to  have  the  resolution  referred 
to  that  committee. 

The  Vice  President.  Is  there  objection?  The  Chair  hears  ncme,  and  the 
resolution  is  referred  to  the  Committee  on  Naval  Affairs. 


Exhibit  No.  5. 
[DebJite  in  the  Senate  Aug.  3,  1914,  on  Weeks  bill  (S.  5259).] 

United  States  Navy  Mail  Lines. 

Mr.  Thornton.  From  the  Committee  on  Naval  Affairs  I  report  back  favor- 
ably without  amendment  the  bill  (S.  5259)  to  establish  one  or  more  United 
States  Navy  mail  lines  between  the  United  States  and  South  America,  and  I 
submit  a  report  (No.  718)  thereon,  together  with  the  accompanying  document, 
being  the  opinion  of  the  Navy  Department  on  the  question.  I  ask  unanimous 
con.sent  for  the  present  consideration  of  the  bill. 

The  Vice  President.  The  Secretary  will  read  the  bill. 

The  Secretary  read  the  bill  (S.  5259)  to  establish  one  or  more  United  States 
Navy  mail  lines  between  the  United  States  and  South  America,  as  follows : 

"  Dp  it  enacted,  etc.,  That  the  Secretary  of  the  Navy  is  hereby  authorized  to 
establish  one  or  more  United  States  Navy  mail  lines,  by  employing  such  vessels 
of  the  Navy  as  in  his  discretion  are  available,  without  impairment  to  the  para- 
mount duties  of  the  Navy,  and  as  are  necessary  and  appropriate,  for  the  purpose 
of  establishing  and  maintaining  regular  communication  l)etween  the  east  or 
west  coast,  or  both  coasts,  of  the  United  States  and  either  or  both  coasts  of 
South  America.  The  vessels  .so  employed  shall  carry  United  States  mail,  pas- 
sengers, and  freight  under  such  regulations  and  at  such  rate  or  rates  as  the 
Secretary  of  the  Navy  may  prescribe.  Such  civilians,  such  officers  of  the  naval 
auxiliary  service,  and  such  officers  and  enlisted  men  of  the  Navy,  including 
officers  on  the  retired  list,  as  the  Secretary  of  the  Navy  may  deem  necessary 
shall  be  employed  in  the  business  of  the  said  mail  line  or  lines,  and  retired 
officers  of  the  Navy  so  employed  at  sea  or  on  shore  shall  in  all  re.spects  be  held 
and  considered  to  be  in  an  active-duty  status  and  shall  receive  the  pay  and 
allowances  of  officers  of  the  active  list  of  the  same  rank  and  length  of  service: 
Provided,  That  officers  placed  on  the  retired  list  on  account  of  wounds  or  dis- 
ability incident  to  the  service,  or  on  account  of  age,  or  after  30  years'  service, 
shall  not  be  ordered  to  such  duty  without  their  consent. 

"  The  enlisted  strength  of  the  Navy,  as  now  or  hereafter  authorized  by 
law,  is  hereby  increased  by  the  number  of  men  required  to  man  the  vessels  so 
employed,  and  the  Secretary  of  the  Navy  is  hereby  authorized  to  enlist  such 
number  of  men  in  the  Navy  for  such  terms  of  enlistment,  not  to  exceed  four 
years,  as  may  be  desirable,  and  to  distribute  the  number  of  men  so  enlisted 
among  the  various  ratings  of  the  Navy. 

"  Sec.  2.  That  in  addition  to  and  as  a  part  of  the  line  of  the  Navy  there  is 
hereby  established  an  active  reserve  list.  Line  officers  placed  on  the  active 
reserve  list  under  the  provisions  of  this  act  shall  be  held  to  be  in  an  active- 
duty  status  in  all  respects,  except  that  officers  on  the  active  re.serve  list  shall 
not  be  advanced  on  the  active  reserve  list  except  for  eminent  and  conspicuous 
conduct  in  battle  or  extraordinary  heroism,  when  their  advancement  thereon 
for  these  causes  shall  be  governed  by  the  provisions  of  law  governing  the  ad-^ 
vancenient  of  officers  on  the  active  list  for  like  causes.  All  laws  now  in  effect 
with  reference  to  the  retirement  of  officers  from  the  active  list  are  hereby  ex- 
tended to  include  officers  on  the  active  reserve  list. 

"  Sec.  3. '  That  sections  8  and  9  of  the  act  approved  March  3,  1899,  entitled 
'An  act  to  reorganize  and  increase  the  efficiency  of  the  personnel  of  the  Navy 


352      SHIPPING  BOARD,  NAVAI.  AUXILIARY,  AND  MERCHANT  MARINE. 

and  Marine  Corps  of  the  United  States,'  as  amended  by  the  act  approved  Au- 
gust 22,  1912.  entitled  'An  act  malving  appropriations  for  the  naval  service  for 
the  fiscal  year  ending  June  30,  1913,  and  for  other  purposes,"  are  so  far  amended 
that  officers  who  liereafter  volunteer  or  are  selected  for  retirement  as  therein 
provided  shall  be  held  and  considered  to  have  volunteered  for  transfer  to  the 
active  reserve  list  or  shall  be  selected  for  transfer  to  the  active  reserve  list, 
respectively;  and  the  transfer  of  such  officers  to  the  active  reserve  list  in  lieu 
of  their  retirement  shall  be  made  subject  to  the  restrictions  imposed  by  the  pro- 
visions of  the  said  sections  as  amended. 

"  Sec.  4.  That  in  addition  to  such  part  of  existing  appropriations  as  may  be 
available  for  the  expenses  of  operating  the  line  or  lines  herein  provided  for  the 
sum  of  $100,000  is  hereby  appropriated,  to  be  paid  out  of  any  money  in  the 
Treasury  of  the  United  States  not  otherwise  appropriated,  to  be  expended  in 
the  discretion  of  the  Secretary  of  the  Navy  for  the  purpose  of  organizing,  in- 
augurating, and  carrying  on  the  traffic  provided  for  in  this  act  and  in  defray- 
ing the  operating  expenses  incident  thereto :  Provided,  That  all  money  received 
for  the  transportation  of  mail,  passengers,  and  freight,  as  provided  in  section 
1  of  this  act,  and  for  such  other  services  as  may  be  incident  to  the  operation 
of  the  said  line  or  lines,  is  hereby  made  available,  in  addition  to  the  aforesaid 
sum  of  $100,000  herein  appropriated,  for  expenses  incident  to  the  proper  con- 
duct of  the  business  contemplated  in  this  act:  Provided  further,  That  any  sinn 
of  money  herein  appropriated  which  remains  unexpended  at  the  end  of  the  third 
fiscal  year  after  the  passage  of  this  act,  and  at  the  end  of  each  fiscal  year, 
thereafter,  shall  be  covered  into  the  Treasury  of  the  United  States." 

The  Vice  President.  Is  there  objection  to  the  present  consideration  of  the 
bill? 

Mr.  Gallinger.  Mr.  President,  I  will  ask  the  Senator  from  Louisiana  what 
class  of  ships  in  the  Navy  will  be  available  for  this-  service  at  the  present  time? 

Mr.  Thoknton.  I  will  answer  that  there  is  a  full  report  from  the  department 
covering  the  question,  and  I  think  perhaps  it  would  be  better  to  have  it  read, 
so  that  the  Senator  will  understand. 

Mr.  Gallixgkr.  We  have  not  an  adequate  auxiliary  Navy.  We  had  not 
enough  ships  to  accompany  our  battleship  fleet  around  the  world.  I  can  not 
quite  see  what  ships  we  are  going  to  utilize  without  seriously  weakening  our 
meager  auxiliary  fleet. 

Mr.  Thornton.  Mr.  President,  I  will  say  to  the  Senator  from  New  Hampshire 
that  the  author  of  the  bill  is  the  Senator  from  Massachusetts  [Mr.  Weeks], 
and  I  think  probably  he  would  like  to  answer  any  question  which  the  Senator 
asks ;  so  I  will  ask  him  to  do  so. 

The  Vice  President.  The  Secretary  will  read,  for  the  information  of  the 
Senator,  the  list  of  ships  that  the  department  says  can  be  used. 

Mr.  Galltnger.  I  should  be  glad  to  have  that  done. 

The  Secretary  read  as  follows : 

Department  of  the  Navy, 

Office  of  the  Secretary, 
Washington,  April  11,  191^. 
Hon.  B.  R.  Tillman, 

Chairman  of  the  Committee  on  Naval  Affairs, 

IJnited  States  Seriate. 

My  Dear  Senator:  1.  Referring  to  Senate  resolution  No.  317,  Sixty-third 
Congress,  second  session,  I  have  the  honor  to  forward  to  your  committee  a 
report  embodying  the  information  requested. 

2.  It  is  practicable,  by  the  use  of  naval  vessels,  to  carry  out  the  purpo.se  indi- 
cated in  the  resolution,  and  the  following  vessels  will  be  available  for  the 
service,  viz,  St.  Lonis,  Charleston,  Miliraukee,  Columbia,  Minneapolis,  Salem, 
Chester,  Buffalo,  Rainbow,  Ancon,  Cristobal,  Hector,  Mars,  Vulcan,  Cyclops,  and 
Neptune  (or  two  equally  good),  and  the  Nanshan. 

3.  The  St.  Louis,  Charleston,  MiUcaukee,  Columbia,  and  Minneapolis  are  fast 
cruisers ;  the  Salem  and  Chester  are  fast  scout  cruisers ;  the  Buffalo  and  Rain- 
bow are  transports;  the  Ancon  and  Cristobal  are  steamers  employed  by  the 
Panama  Railroad  Co.  to  be  turned  over  to  the  Navy  Department ;  and  the  others 
are  naval  colliers. 

4.  The  cruisers  are  suitable  for  carrying  only  a  small  number  of  male  pas- 
sengers—15  to  20  each— and  could  not  be  fitted  for  carrying  bulky  freight 
without  interferring  materially  with  their  military  value ;  but  they  could  carry 
the  mails  and  a  limited  amount  of  express  freight  and  parcels,  about  150  tons 
each. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      353 

5.  The  Buffalo,  Rainboio,  Ancon,  and  Cristobal  are  suitable  for  carrying  a 
limited  nuniher  of  passengers  and  any  kind  of  freight:  Buffalo,  20  first-class 
passengers  and  4,000  tons  of  freight;  Rainbow,  25  passengers  and  2,500  to  3,000 
tons  of  freight;  Anco7i  and  Cristobal  each  74  first-class  and  32  steerage  passen- 
gers and  between  10,000  and  11,000  tons  of  freight.  The  naval  colliers  are  not 
suitable  for  carryijig  any  passengers,  but  are  well  adapted  to  a  freight  service; 
the  first  three  carrying  6.500  to  10,000  tons  each ;  the  two  of  the  Cyclops  class 
10,000  to  12,.500  tons  of  freight  and  2,900  tons  of  fuel  oil  in  bulk  each ;  and  the 
Xanslian  about  3,000  tons. 

JosEPHus  Daniels. 

Mr.  Weeks.  Mr.  President,  I  may  add  to  the  statement  from  the  department 
that  there  are  carried  on  the  Navy  list,  under  the  head  of  "  fuel  ships,"  22 
vessels  having  a  total  displacement  of  something  like  230,000  tons,  varying  in 
size  from  6,000  to  19,000  tons.  Many  of  these  ships  are  in  active  servicein  con- 
nection Avith  the  fleet,  but  they  would  be  availal)le  for  any  service  of  the  char- 
acter outlined  in  this  bill,  if  it  is  passed,  provided  the  fleet  were  not  in  actual 
service  on  the  Jlexican  coast. 

The  Vice  President.  Is  there  objection  to  the  present  consideration  of  the 
bill? 

Mr.  CJallinger.  .Tust  a  word. 

'Mv.  President,  this  is  a  m'akeshift  that  perhaps  we  ought  to  agree  to.  It  is 
a  deplorable  fact  that  our  mails  to  South  America,  including  the  oflicial  mail, 
are  sent  to  Europe  and  transshipped  from  there  to  South  America,  covering 
6,000  instead  of  3.000  miles  by  direct  line.  I  can  not  help  saying,  however,  that 
it  is  a  makeshift  of  which  we  ought  not  to  be  proud. 

This  question  of  steamship  service  to  South  America  has  been  agitated  a 
great  deal.  I  have  agitated  it  myself.  The  Senator  from  New  York  [Jlr.  Root] 
has  agitated  it.  Presidents  of  the  United  States  have  agitated  it.  Both  Repub- 
lican and  Democratic  statesmen  have  agitated  it.  Yet  we  are  without  a  line 
from  either  the  Gulf,  the  Pacific,  or  the  Atlantic  coast  of  the  United  States  to 
South  America. 

This  bill  proposes  to  put  in  service  a  few  inadequate  ships,  if  we  can  spare 
them  fi'om  other  service ;  ships  that  will  carry  a  handful  of  passengers  and  a 
little  fi-eight ;  sIoav  shijis,  I  take  it,  almost  every  one  of  them;  and  we  are  to 
be  put  in  competition  with  the  great  countries  of  the  world,  with  their  mag- 
nificent steam.sships,  by  calling  together  this  conglomeration  of  third-class  or 
fourth-class  shii^s  for  this  .service. 

I  shall  not  oppose  it.  because  I  think  if  we  can  do  anything  to  give  us  a  chance 
in  the  markets  of  South  and  Central  America,  we  ought  to  do  it ;  but  I  can 
not  refrain  from  saying  that  it  is  almost  a  tragedy  that  this  great  country  of 
ours,  in  its  rivalry  with  these  other  nations  in  the  effort  to  secure  trade,  should 
be  compelled  to  be  handicapped  by  a  fleet,  even  if  we  can  nuister  them,  of  ships 
that  are  so  inferior  and  so  poorly  prepared  for  the  service  to  which  we  call 
them. 

As  I  say,  I  shall  not  oppose  the  passage  of  the  bill ;  but  I  shall  not  vote  for 
it  with  the  .sense  of  gratification  and  pleasure  that  I  would  if  it  were  a  proposi- 
tion to  establish  a  line  of  steamships  that  would  be  a  ci*edit  to  the  Government 
between  the  North  Atlantic  coast  or  the  Gulf  coast  of  this  country  and  South 
America. 

Mr.  Stone.  Mr.  President 

Mr.  "Weeks.  I  yield  to  the  Senator  from  Missouri.  . 

Mr.  Stone.  Mr.  President,  the  immediate  pressing  importance  of  maintaining 
our  mail  connections  with  Central  and  South  America  is  apparent,  and  the 
difficvdty  of  doing  so  in  the  way  heretofore  followed,  at  least  in  so  far  as 
many  foreign  mail-carrying  vessels  are  concerned,  is  likewise  apparent. 

There  can  be  no  dilTerence  of  opinion  as  to  the  importance  of  some  legislation 
of  this  kind.  This,  however,  is  a  bill  covering  more  than  one  subject,  and  it  is 
brought  before  the  Senate  so  suddenly  that  we  have  little  opportunity  for  ex- 
amining or  di.scussing  it.  I  do  not  wish  to  object  to  its  consideration  nor  to 
oppose  its  passage ;  but  I  should  like  to  know  whether,  in  the  opinion  of  the 
Senator  from  Massachusetts,  any  serious  disadvantage  would  result  if  the 
consideration  of  the  bill  should  be  postponed  for  a  day  or  two? 

Mr.  Weeks.  Mr.  President,  this  bill  results  from  a  resolution  which  was 
considered  by  the  Senate  three  or  four  months  ago.     The  resolution  went  to  the 


354      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Navy  Department.  The  purposes  of  the  resolution  were  approved  by  the  de- 
partment, which  prepared  the  bill  which  is  now  under  consideration.  It  has 
not  been  on  the  calendar  because  of  the  difficulties  of  getting  reports  from  com- 
mittees and  because  we  were  in  a  condition  where  possibly  tliese  ships  would 
be  needed  in  Mexican  waters.  In  fact,  many  of  them  are  on  the  coast  of  Mexico 
at  this  time;  but  apparently  the  time  lias  passed  when  they  are  going  to  be 
needed  for  that  service,  and  this  is  the  first  practicable  opportunity  the  Naval 
Affairs  Committee  has  had  to  consider  the  bill  and  to  make  a  report. 

If  it  were  possible  to  have  a  morning  hour  every  day  when  legislation  of  this 
kind  could  be  considered,  or  if  those  who  control  the  legislative  program  were 
willing  to  take  up  these  matters,  which  I  think  are  of  immediate  and  pressing 
importance,  and  give  them  precedence  over  legislation  which  I  think  ought  to 
be  deferred  until  next  winter,  I  should  not  feel  like  urging  the  Senator  not  to 
make  an  objection  against  this  bill ;  but  I  think  the  sentiment  of  those  who  have 
thought  of  this  legislation  and  its  purposes  has  been  unanimously  in  favor  of 
the  adoption  of  this  proposition.  Unless  we  are  going  to  have  an  immediate 
opportunity  to  discuss  it,  and  to  discuss  it  fully,  I  hope  the  Senator  will  with- 
hold his  objection. 

Mr.  Stone.  I  liave  not  made  any  objection. 

Mr.  Weeks.  No  ;  I  undeistand  the  Senator  has  not. 

Mr.  Stone.  And  it  is  not  my  purpose  to  object.  I  simply  submit  a  question 
to  the  Senator  who  is  the  author  of  the  bill,  according  to  the  statement  of  the 
Senator  from  Louisiana. 

As  to  the  unfinished  business  before  the  Senate,  and  the  bills  associated  with 
it,  which  it  is  generally  understood  are  to  be  considered  at  this  session,  sliould 
be  postponed  to  another  session  of  Congress,  that  is  a  question  that  I  do  not 
care  now  to  discuss.  We  have  been  over  that  time  and  again,  and  it  woiild  be 
a  waste  of  time,  I  think,  expressing  my  own  opinion  only,  that  in  the  face  of  the 
almost  world-wide  conditions  of  tumult  now  prevailing,  and  which  unhappily 
we  liave  every  reason  to  believe  will  be  intensely  accentuated,  any  question  of 
this  character  of  such  grave  international  moment  could  by  practically  unani- 
mous consent  find  time  for  consideration.  I  do  not  mean  by  that  there  will  be 
need  for  any  undue  postponement  of  the  consideration  of  the  trade  commission 
bill  or  the  Clayton  bill  or  any  other ;  but  between  times  it  may  become  neces- 
sary, it  is  very  likely  that  it  will  become  necessary,  for  the  Senate  to  take  up 
questions  like  that  involved  in  the  pending  bill  and  dispose  of  them.  The  public 
intei'est  and  welfare  may  absolutely  require  that  to  be  done. 

I  express  tlie  view  that  there  will  be  no  serious  difficulty  about  that.  I  am 
informed  that  a  measure  is  likely  to  be  introduced  at  an  early  day  in  the 
House  of  Representatives  intended  to  meet  the  needs  of  our  commerce  arising 
under  the  circumstances  confronting  us.  If  that  measure  shall  be  introduced 
and  come  before  Congress,  I  liave  no  doubt  it  will  embrace  such  matters  as  are 
covered  by  this  bill,  and  which  measure  as  a  whole  will,  I  take  it,  be  very  mucli 
broader  and  more  comprehensive  than  this  measure.  If  that  is  true  and  the 
attention  of  Congress  is  to  be  directed  to  a  measure  of  that  kind,  it  occurs  to  me 
it  might  be  better  to  embrace  all  these  questions  in  one  measure  rather  than 
to  take  them  up  piecemeal. 

Mr.  President,  I  simply  make  that  as  a  suggestion,  having  no  intention, 
however,  of  obstructing  the  passage  of  the  pending  bill  if  it  is  thought  best 
to  proceed  with  it  at  this  time. 

Mr.  Weeks.  Let  me  ask  the  Senator  this  question :  Even  if  his  supposition 
is  correct,  and  the  press  reports  indicate  that  it  is,  does  not  the  Senator  think 
it  might  facilitate  the  action  of  the  House  if  the  Senate  had  passed  this  bill 
which  going  to  the  House  then  might  be  incorporated,  or  such  part  as  had 
value,  in  the  general  proposition  to  which  he  refers? 

Mr.  Stone.  That  might  be  true;  possibly  it  is  true.  '  Before  the  bill  pending 
is  dispo.sed  of,  if  there  should  be  no  objection  to  its  consideration,  I  think  it  is 
due  to  the  Senate  that  the  Senator  from  IMassachusetts  should,  as  concisely  and 
briefly  as  he  can,  state  the  general  provisions  of  the  bill,  so  the  Senate  may  be 
better  informed  when  it  comes  to  vote  upon  it. 

■  In  concluding,  Mr.  President,  I  wish  to  make  this  observation :  I  sympathize 
with  what  the  Senator  from  New  Hampshire  has  said.  With  him,  I  think  that 
the  situation  confronting  us  at  this  time  is  one  that  we  not  only  have  no  reason 
to  be  proud  of,  but  one  that  we  might  very  well  be  heartily  ashamed  of.  With 
almost  the  whole  of  Europe  involved,  or  about  to  become  involved,  in  a  tremen- 
dous conflict,  which  may  be  prolonged,  resulting  almost  inevitably  in  seriously 
crippling  all,  and,  maybe,  destroying  many,  of  their  industries,  there  must  of 
necessity  in  the  near  future  be  a  very  great  demand  upon  the  resources  of 


Shipping  board,  naval  auxiliary,  and  merchant  marine.    355 

this  country,  asi'icultural  and  raanufarturlns,  not  only  in  Europe,  but  in  other 
parts  of  the  world.  ]\Ir.  President,  a  very  large  commerce  has  been  carried  on 
for  years  between  the  South  American  States  and  Europe,  an  immense  volume 
of  European  productions  being  sold  in  the  markets  of  South  America,  and  their 
respective  products  have  been  exchanged  in  great  quantities,  and  so  it  seems 
to  me  that  one  manifest  effect  of  this  great  struggle  in  Europe  will  be  not  only 
to  interrupt,  but  for  an  indefinite  period  to  put  an  end  to  commercial  communi- 
cation between  South  America  and  the  great  marts  of  the  manufacturing 
countries  of  Europe.  Without  any  fault  of  ours  a  most  opportune  time  has 
arisen  for  the  United  States  to  render  a  great  public  service  and  at  the  same 
time  to  enlarge  its  commercial  intercourse  with  the  Republics  of  the  south.  But 
right  at  this  point  we  are  terribly  embarrassed  by  a  lack  of  transportation 
facilities.  The  only  difference  between  the  Senator  from  New  Hampshire  and 
me,  if  we  came  to  discuss  the  subject,  which  I  shall  not  do  now,  would  arise  as  to 
the  causes  blamable  for  this  condition.  It  would  boot  nothing  for  us  to  enter 
upon  a  discussion  of  that  kind  at  this  time.  Whatever  the  Senator's  opinion 
may  be  as  to  the  causes,  or  whatever  mine  may  be,  or  that  of  any  other  Senator, 
we  will  all  be  agreed  that  by  reason  of  the  lack  of  a  merchant  marine  we  face 
at  this  time  a  most  unfortunate  if  not  desperate  condition  in  the  commercial 
world. 

Mr.  Newlands.  Mr.  President 

The  Vice  President.  Does  the  Senator  from  Massachu.setts  yield  to  the  Sena- 
tor from  Nevada? 

Mr.  Weeks.  I  yield. 

Mr.  Newlands.  If  the  Senator  will  permit  me,  I  wish  to  say  that  I  am  very 
anxious  to  proceed  with  the  trade  conmiission  bill,  but  I  realize  that  this  is  a 
matter  of  great  importance 

Mr.  Oallinger.  Of  greater  importance. 

Mr.  Newlands.  And  I  would  be  glad  to  expedite  it,  if  it  can  be  passed  during 
the  morning  hour. 

I  wish  to  say,  Mr.  President,  in  this  connection  that  for  many  years  I  have 
been  urging,  in  the  form  of  resolutions  and  amendments  to  pending  legislation 
and  bills,  the  creation  of  an  auxiliary  Navy,  composed  of  transports,  colliers, 
scouts,  and  other  ships,  which  would  aid  the  fighting  ships  in  case  of  war  and 
would  be  useful  in  time  of  peace  in  opening  up  new  routes  of  commerce  and  as 
training  schools  for  our  merchant  marine.  This  bill  is  not  so  ambitious  as  the 
project  contemplated  by  the  resolutions  and  amendments  which  I  have  offered 
from  time  to  time,  but  I  regard  it  as  a  .step  in  that  direction.  It  is  a  utilization 
by  the  Navy  of  certain  ships  now  in  the  Navy  for  the  purpose  of  opening  up 
commercial  routes  and  mail  routes,  new  routes  of  transportation  through  which 
American  commerce  can  be  developed. 

We  all  know  that  the  great  difficulty  in  establishing  a  merchant  marine  in  the 
United  States  is,  first,  the  initial  cost  of  the  ships,  which,  under  our  protective 
system,  is  much  larger  than  that  in  other  countries;  and,  second,  the  cost  of 
operation,  becau.se  of  the  more  liberal  wages  which  we  pay.  But  it  is  perfectly 
apparent  that,  so  far  as  our  Navy  is  concerned,  it  is  a  badly  proportioned  Navy, 
composed  almost  entirely  of  fighting  ships  and  lacking  the  auxiliary  ships  neces- 
sary to  support  the  fighting  ships  in  case  of  war,  and  without  the  ability  upon 
the  part  of  the  United  States  in  case  of  war  to  call  in  the  ships  of  its  merchant 
marine,  because,  practically,  we  have  no  merchant  marine. 

I  look  upon  this  legislation,  therefore,  as  a  step  in  the  direction  of  a  larger 
policy,  which  will  result  in  the  construction  by  the  United  States  of  commercial 
ships,  transports,  colliers,  ships  that  can  be  used  for  scouts,  etc.,  in  time 
of  war  and  their  utilization  in  time  of  peace ;  and  I  expect  that  in  the 
progress  of  events  the  opening  up  of  these  commercial  routes  through  our  Navy 
will  gradually  lead  to  the  establishment  of  a  substantial  merchant  marine  be- 
longing to  the  United  State.s. 

I  am  warmly  for  this  measure,  and  hope  that  no  objection  will  be  intei'posed 
against   its  present  consideration. 

I  should  like  also  to  insert  in  my  remarks  the  resolutions  that  I  have  offered 
and  amendnumts  that  I  have  proposed  on  this  subject  during  previous  years, 
with  extracts  from  previous  remarks  concerning  tliem. 

The  Vice  Pkestdknt.  Without  objection,  it  is  so  ordered. 

The  matter  referred  to  is  as  follows: 

Motion  made  by  Mr.  Newlands,  Fifty-ninth  Congress,  first  session,  February 
14,  190G: 

"  That  S.  529  be  recommitted  to  the  Committee  on  Commerce,  v,'ith  instruc- 
tions to  report  in  connection  therewith  an  estimate  of  the  cost  of  the  vessels 


356      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARl.XK. 

required  for  service  in  the  ocean  mail  lines  provided  for  in  section  6,  and  as  to 
whether  it  is  practicable  for  the  United  States  Government  to  construct  such 
ships  as  a  part  of  tlie  Navy,  supplementary  to  the  warships,  to  be  used  as  col- 
liers, transpoi-ts,  scouts,  etc.,  in  the  emergency  of  war,  and  as  to  whether  it  is 
practicable  to  lease  such  ships  to  private  corporations  in  times  of  peace  for 
the  service  of  the  mail  lines  contemplated  in  section  G,  and  as  to  whether  it  is 
practicable  to  organize  a  naval  reserve  to  be  enlisted  in  the  United  States  in 
the  service  of  such  ships  whose  wages  shall  be  paid  three-fourths  by  the  private 
corporations  leasing  such  ships  and  one-fourth  by  the  United  States  Govern- 
ment ;  such  naval  reserves  to  be  composed  of  citizens  of  the  United  States,  or 
those  who  have  declared  their  intention  to  become  such — and  to  be  subject  to 
the  training  of  naval  ofhcers  in  order  to  fit  them  to  respond  to  the  call  of  the 
Government  in  case  of  war,  and  the  rentals  received  from  such  ships  to  form 
a  fund  for  the  gradual  enlargement  of  tlie  number  of  supplementary  ships  re- 
quired by  the  Navy  in  case  of  war,  as  colliers,  transports,  scouts,  etc.,  and  gen- 
erally to  report  the  comparative  cost  of  such  methotl  of  enlarging  our  merchant 
marine  as  compared  with  the  method  of  subvention  provided  by  section  G." 

Amendment  to  the  ship  subsidy  bill,  Sixtieth  Congress,  first  session,  offered 
by  Mr.  Newlands  on  INIarch  20,  190S : 

"  That  the  Secretary  of  the  Navy,  the  Postmaster  General,  and  the  Secretary 
of  Commerce  and  Labor  shall  hereafter  constitute  a  conuuissiou  to  be  known 
as  the  Foreign  Commerce  Commission,  and  that  they  are  hereby  authorized 
to  pi-ovide  ftjr  the  construction,  either  in  the  private  shipyards  of  the  country 
or  in  the  shipyards  of  the  Navy,  or  both,  of  27  vessels,  not  exceeding  G,500  tons 
capacity  each  and  costing  in  the  aggregate  not  exceeding  $27,000,000;  that 
such  vessels  shall  be  so  constructed  as  to  be  useful  to  the  Navy  as  auxiliary 
vessels,  such  as  ti-ansports,  colliers,  dispatch  boats,  cruisers,  and  scouts,  and  also 
useful  in  times  of  peace  in  opening  up  new  routes  of  conunerce  between  Uinted 
States  ports  and  the  ports  of  South  America,  New  Zealand,  Australia,  and  the 
Philippines;  that  such  commission  make  to  Congress  such  recommendations 
as  to  it  seem  advisable  regarding  the  manning  of  such  vessels  in  v»-hole  or  in 
part  by  the  Naval  lleserve  and  the  leasing  of  them  so  manned  in  times  of  peace 
to  shipping  companies  for  the  purpose  of  promoting  foreign  trade  and  com- 
merce, and  for  the  incorporation  of  such  shipping  companies  under  national 
law,  and  for  reports  on  their  operations." 

Amendment  offered  by  Mr.  Newlands  to  the  ship  subsidy  bill,  Sixtieth  Con- 
gress, first  session,  April  27,  190S: 

"  For  an  auxiliary  navy  consisting  of  transports,  colliers,  scouts,  dispatch 
boats,  and  other  vessels  necessary  in  aid  of  the  hghting  sliips  in  case  of  war. 
$20,000,000,  and  the  Secretary  of  the  Navy,  the  Secretary  of  Conunerce  and 
Labor,  and  the  Potmaster  General  are  hereby  constituted  a  commission  to 
recommend  to  Congress  a  plan  for  utilizing  such  ships  in  times  of  peace." 

Amendment  offered  by  Mr.  Newlands  to  the  naval  appropriation  bill,  Sixtieth 
Congress,  second  session,  February  15,  1909 : 

"  Strike  out  the  clause  relating  to  battleships,  page  68,  lines  14  to  21,  in- 
clusive, and  insert :  '  That  for  the  purpose  of  increasing  the  efficiency  of  the 
Naval  Establishment  of  the  United  States  the  President  is  authorized  to  have 
constructed  such  auxiliai-y  ships,  including  transports,  colliers,  dispatch  boats, 
cruisers,  and  scouts,  as  will  be  necessary  in  case  of  war  to  supptnt  the  fight- 
ing ships,  at  a  total  cost  not  to  exceed  $12,000,000;  and  that  the  President 
make  such  recommendations  to  Congress  as  to  him  seem  advisable  regarding 
the  manning  of  vessels  belonging  to  such  auxiliary  navy,  in  whole  or  in  part, 
by  the  Naval  Reserve  and  the  leasing  of  them  so  manned  in  times  of  peace  to 
shipping  companies  for  the  purpose  of  promoting  foreign  trade  and  conunerce.'  " 

In  the  Sixty-first  Congress,  second  session,  on  June  10,  1910,  Mr.  Newlands 
introduced  S.  3721,  to  authorize  the  construction  of  auxiliary  ships  for  the 
Navy: 

"  A  BILL  (S.  3721)  Provjclins  for  the  construction  of  .auxiliary  ships  of  the  Navy  and  for 
their  use  in  times  of  peace  in  opening  up  now  routes  of  cummerce. 

"  Be  it  enacted,  etc.,  That  the  Secretary  of  the  Navy,  the  Postmaster  General, 
and  the  Secretary  of  Commerce  and  Labor  shall  hereafter  constitute  a  commis- 
sion to  be  known  as  the  Foreign  Commerce  Commission,  and  that  they  are  hereby 
authorized  to  provide  for  the  construction,  either  in  the  i)rivate  shii)yar(ls  of  the 
United  States  or  in  the  shipyards  of  the  Navy,  or  both,  of  30  vessels,  not  exceed- 
ing G.500  tons  capacity  eacli  and  costing  in  the  aggregate  not  exceeding 
$30,000,000;  that  such  vessels  shall  be  so  constructed  as  to  be  useful  to  the  Navy 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      357 

as  auxiliary  vessels,  sucli  as  transports,  colliers,  dispatch  boats,  cruisers,  aud 
scouts,  and  also  useful  in  times  of  peace  in  opening  up  new  routes  of  commerce 
between  United  States  ports  and  the  ports  of  South  Africa,  South  America,  New 
Zealand,  Australia,  aud  the  Philippines ;  that  such  conniiission  make  to  Congress 
such  recommendations  as  to  it  seem  advisable  regarding  the  manning  of  such 
vessels  in  whole  or  in  part  by  the  Naval  Reserve  and  the  leasing  of  them  so 
manned  in  times  of  peace  to  shipping  companies  for  the  purpose  of  promoting 
foreign  trade  and  commerce,  and  the  incorporation  of  such  shii)ping  companies 
under  national  law,  and  reports  of  their  operation." 

In  the  Sixty-first  Congress,  third  session,  on  February  2,  1911,  Mr.  Newlands 
offered  the  following  as  an  amendment  to  the  ship-subsidy  bill : 

"  That  the  Secretary  of  the  Navy,  the  Postmaster  General,  and  the  Secretary 
of  Commerce  and  Labor  shall  hereafter  constitute  a  conunission  to  be  known  as 
the  Foreign  Conmierce  Conunission,  and  that  they  are  hereby  authorized  to  pro- 
vide for  the  construction,  either  in  tlie  private  shipyards  of  the  United  States 
or  in  the  shipyards  of  the  Navy,  or  both,  of  30  vessels,  not  exceeding  ^,r,0{)  tons 
capacity  each  and  costing  in  the  aggregate  not  exceeding  !?30,000,000 ;  that  such 
vessels  shall  be  so  constructed  as  to  be  useful  to  the  Navy  as  auxiliary  vessels, 
such  as  transports,  colliers,  dispatch  boats,  cruisers,  and  scouts,  and  also  useful 
in  times  of  peace  in  opening  up  new  routes  of  commerce ;  that  such  conunission 
make  to  Congress  such  reconnnendations  as  to  it  seem  advisable  regarding  the 
manning  of  such  vessels  in  whole  or  in  part  by  the  Naval  Reserve  and  the  leas- 
ing of  them  so  mannt-d  in  times  of  pejice  to  shipping  companies,  or  otherwise- 
utilizing  them  for  the  purpose  of  promoting  foreign  trade  and  connnerce." 

Extract  from  Senate  resolution  No.  41,  Sixty-second  Ci»ngress,  first  session, 
introduced  by  Mr.  Newlands,  May  11,  1911 : 

"Resolved,  That  it  is  the  sense  of  tlie  Senate  that  during  the  extra  session 
legislation  should  be  enacte<]  upon  the  following  subjects: 

•  •«•«** 

"(7)  Providing  for  the  ui)building  of  the  Amtn'ican  merchant  marine  by  fj'ee 
entry  to  American  registry  of  all  ships,  wherever  constructed,  and  by  the  con- 
.struction  of  auxiliary  ships  for  our  Navy,  to  be  used  in  time  of  war  in  aid  of 
the  fighting  ships  ;uul  in  time  of  peace  in  establishing  new  routes  of  commerce 
through  lease  to  shipping  companies;  such  legislation  to  involve  the  temporary 
diminution  of  the  construction  of  figliting  ships  and  the  substitute  of  auxiliary 
ships,  with  a  view  to  the  creation  of  a  well-proportioned  and  self-sustaining. 
Navy." 

Extract  from  Senate  resolution  No.  ir>9,  offered  by  Mr.  Newlands,  Sixty -second 
Congi'ess,  second  session,  December  7,  1911: 

'Resolved,  Tiiat  it  is  the  sense  of  the  Senate  that  during  the  present  session 
the  appropriate  connnittees  shall  consider  and  Congress  enact  legislation  iiii«ju 
the  following  subjects: 

"  Twelfth.  Providing  for  the  construction  of  auxiliary  ships  for  our  Navy, 
to  be  used  in  time  of  war  in  aid  of  the  fighting  ships  and  in  times  of  peace  in 
establishing  necessary  service  througli  the  Panama  Canal  and  new  routes  of 
commerce  to  foreign  countries  through  lease  to  shipping  companies;  such  legis- 
lation to  involve  the  temporary  diminution  of  the  construction  of  tighting  sliips 
and  the  substitution  of  auxiliary  ships,  with  a  view  to  the  creation  of  a  well- 
proportioned  and  etticient  Navy." 

Extract  from  Senate  resolution  No.  4,  introduced  Sixty-tliird  Congress,  special 
session  of  the  Senate,  by  Mr.  Newlands,  on  March  13,  1913: 

"6.  Resolved,  That  the  Committees  on  Military  and  Naval  Affairs  report  at  as- 
early  a  date  as  possible  during  the  extra  session  upon  the  following  quastions : 

"(b)  A  plan  for  the  construction  of  auxiliary  ships  for  the  Navy,  to  be  used 
in  time  of  war  in  aid  of  the  fighting  ships  and  in  time  of  peace  in  estaltlishing 
necessary  service  through  the  I'anama  Canal  and  new  routes  of  connnerce  to 
foreign  countries  through  lease  to  shipping  companies ;  such  legislation  involv- 
ing the  temporary  diminution  of  the  construction  of  fighting  ships  and  the  sub- 
stitution of  auxiliary  ships  with  a  view  to  the  organization  of  a  well-propor- 
tioned and  efficient  Navy." 

Mr.  Callingek.  Will  the  Senator  from  Massachusetts  yield  to  me  for  a 
moment? 

Mr.  Weeks.  I  yield. 


358      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Gallinger.  Mr.  President,  as  I  said  a  moment  ago,  I  am  not  going  to 
oppose  any  proposition  tliat  promises  us  any  reasonable  degree  of  relief.  I 
have  no  apologies  to  make  for  my  attitude  on  this  great  question  of  the  merchant 
marine.  The  Senator  from  Missouri  [Mr.  Stone]  wisely  says  this  is  not  the  time 
to  discuss  the  causes  which  led  to  the  decay  of  our  merchant  marine.  The 
Senator  and  I  have  crossed  swords  before  on  that  proposition.  When  the  more 
comprehensive  and,  as  I  think,  the  more  important  bill  that  is  promised  us, 
according  to  the  newspapers  and  in  accordance  with  the  suggestion  of  the 
Sefiator  from  Missouri,  comes  before  the  Senate  I  may  have  something  to  say 
on  the  general  proposition.    I  have  no  disposition  to  say  it  now. 

Mr.  President,  I  have  on  my  desk  four  speeches  of  greater  or  less  importance, 
and  probably  of  less  importance  rather  than  greater,  which  I  have  made  in  this 
Chamber,  and  I  am  gratified  to  observe  that  in  those  speeches,  among  other 
things,  I  called  attention  to  two  possible  complications  which  might  arise  if  we 
did  not  have  an  adequate  merchant  marine.  One  was  that  in  the  event  of  a 
great  European  war  we  would  not  have  any  ships  to  transport  the  products  of 
our  farms  and  our  factories.  Those  are  the  words  that  I  used.  That  is  exactly 
the  situation  which  confronts  us  at  this  very  moment.  The  other  suggestion  I 
made  was  that  in  the  event  of  a  war  between  a  great  foreign  nation  and  our 
Nation  we  would  have  no  adequate  auxiliary  ships  to  supplement  our  battleship 
fleet,  and  that  is  exactly  the  situation  which  exists  to-day. 

This  proposition  takes  some  of  the  few  auxiliary  ships  we  have  and  puts 
them  into  commercial  work,  and  if  they  can  be  called  back  to  the  Navy  when 
they  are  needed  no  substantial  harm,  as  I  see  it,  will  be  done.  But,  as  I 
said  a  moment  ago,  it  is  a  pitiable  situation ;  it  is  a  pitiable  proposition,  con- 
sidering the  great  emergency  which  is  upon  us.  The  Senator  from  Missouri 
properly  says  that  this  great  war  will  interrupt  trade  between  South  America 
and  the  European  countries.  That  is  inevitable,  and  if  we  only  had  adequate 
steamship  lines  between  the  United  States  and  South  America,  there  would 
be  a  boom  in  American  trade  which  would  astonish  not  only  our  own  people 
but  the  world.  I  have  labored,  in  season  and  out  of  season,  to  have  our 
country  prepared  for  this  very  emergency,  but  I  labored  in  vain. 

If  this  makeshift  can  do  some  good,  if  it  can  accomplish  something  for 
American  trade  and  American  commerce,  of  course  we  ought  all  to  agree  to 
It ;  and  I  certainly  shall  vote  for  it. 

The  Vice  President.  Is  there  objection  to  the  present  consideration  of 
the  bill? 

Mr.  Williams.  Mr.  President 

The  Vice  President.  Does  the  Senator  from  Massachusetts  yield  to  the 
Senator  from  Mississippi? 

Mr.  Weeks.  I  yield. 

Mr.  W^iLLiAMs.  I  thought  the  Chair  had  asked  if  there  was  any  objection 
to  the  passage  of  the  bill,  and  I  thought  I  had  a  right  to  the  floor  in  my  own 
name. 

The  Vice  President.  The  Chair  is  not  always  correct.  The  Senator  from 
Massachusetts  had  the  floor,  and  he  has  been  yielding. 

Mr.  Williams.  I  will  wait  until  the  Senator  from  Massachusetts  is  through. 

Mr.  Stone.  Mr.  President 

Mr.  Weeks.  I  will  yield  to  the  Senator  from  Missouri. 

Mr.  Stone.  If  the  Senator  from  Massachusetts  will  allow  me,  I  should  like 
to  put  into  the  Record  without  reading  an  article  clipped  from  a  New  York 
paper  of  yesterday  morning,  from  INIr.  Lewis  Nixon,  in  respect  to  this  very 
situation. 

The  Vice  President.  Is  there  objection?    The  Chair  hears  none. 

The  matter  referred  to  is  as  follows : 

"  Outlines  Way  to  Protect  Commerce  of  America — Lewis  Nixon,  Student  of 
THE  Merchant  Marine,  Says  President  Can  Act  Under  Amended  Panama 
Canal  Act  to  Provide  Necessary  Vessels — Emergency  Calls  fob  Imme- 
diate Action. 

"  Lewis  Nixon,  for  25  years  one  of  the  closest  students  of  the  American  mer- 
chant marine  and  active  in  promoting  its  regeneration,  presented  yesterday  a 
series  of  arguments  to  show  what  can  be  done  in  the  present  emergency  to  meet 
the  imperative  needs  of  American  commerce  and  to  forestall  another  such  pre- 
dicament as  now  faces  this  country  through  lack  of  ocean  shipping  facilities. 

"  He  finds  in  the  Panama  Canal  act  full  authority  for  action,  and  suggests 
that  an  amendment  suspending  during  national  emergencies  the  five-year  limit 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      359 

placed  by  that  law  on  purchase  of  foi'eign  ships  would  place  in  the  hands  of 
the  national  administration  the  fullest  opportunities  to  protect  American  for- 
eign trade  in  supplying  bottoms  for  its  transportation  and  at  the  same  time 
keep  foreign  ships  out  of  the  American  coastwise  trade,  which  they  have  sought 
for  a  generation  to  invade. 

"  '  In  tliepast,  when  just  such  a  contingency  as  now  exists  was  suggested,'  Mr. 
Nixon  said,  '  the  idea  was  ridiculed.  The  United  States  can  never  be  dependent 
upon  her  own  ships,  they  said.  It  is  better  to  have  foreigners  do  our  ocean 
carriage,  because  they  can  do  it  cheaper,  was  the  argument.  ^ 

" '  Naturally  the  foreign  interests  so  well  served  by  such  sophistry  keep  their 
grinding  hand  upon  legislation  and  never  permit  any  legislation  favorable  to 
American  shipping  to  slip  through.  They  got  free  ships  in  the  foreign  trade  in 
the  Panama  Canal  act.  But  they  had  to  be  available  for  governmental  pur- 
poses in  time  of  war,  so  as  yet  this  has  not  been  availed  of. 

"  '  UNDERWOOD   BILL  EMASCULATED. 

" '  The  Underwood  bill  as  first  drawn  would  have  brought  into  play  the  suc- 
cessfully tried  policy  of  discriminating  duties,  but  this  being  seen,  cunningly 
suggested  changes  caused  the  emasculation  of  its  constructive  features. 

"  'A  tremendous  revival  would  have  followed  the  earlier  draft  of  the  Panama 
Canal  act  as  it  passed  the  Senate,  as  this  provided  free  tolls  in  the  foreign  trade ; 
but  the  inlluence  of  foreign  countries,  exerted  through  those  who  profit  by  it 
here,  had  this  changed  in  the  House,  and  even  free  tolls  in  the  coasting  trade 
have  now  been  given  up. 

"  '  The  pretext  of  war's  reprisals  in  the  Boer  War  put  up  freights  and  insur- 
ance in  such  way  as  to  make  our  people  pay  largely  for  that  war. 

"  'A  small  section  on  the  west  coast  paid  more  than  $2,000,000  increase  in 
freight  and  insurance  rates  on  this  account.  A  European  Government  would 
have  called  the  influences  that  levied  such  tribute  of  us  to  sharp  account,  but 
we  .seem  supine  and  helpless  as  soon  as  foreign  transportation  is  mentioned. 

"  '  However,  we  are  now  faced  with  a  situation  that  will  destroy  even  the 
potentialities  of  our  great  harvest  of  this  year.  It  ^\'ill  be  wanted  at  high 
prices.  The  productive  capacity  of  European  countries,  except  Russia,  will  be 
demoralized  for  some  time,  even  though  the  war  does  not  burst  into  full  flame. 

"  '  So  we  must  send  forth  our  freights  and  our  people.  In  1910,  at  Buenos 
Aires,  I  started  a  movement  at  the  Pan  American  Conference  to  make  tlie  West- 
ern Hemisphere  independent.  It  is  to  be  hoped  that  the  lesson  may  now  be 
brought  home  and  that  the  studies  of  a  lifetime  may  no  longer  be  sneered  at 
as  academic. 

"  '  WESTERN    HEMISPHERE  TO   SUFFER. 

"  '  The  Western  Hemisphere  will  suffer  terribly  from  the  withdrawal  of  trans- 
portation facilities  from  both  North  and  South  America. 

"  '  What  can  be  done  immediately,  and  what  are  the  dangers? 

"  '  In  the  Panama  Canal  act  we  have  already  power  to  buy  foreign  ships  and 
run  them  in  the  foreign  trade  under  the  United  States  flag.  They  must  not  be 
more  than  five  years  old.  This  was  to  prevent  our  becoming  the  dumping 
ground  or  junk  heap  for  old  and  worn-out  vessels  which,  if  sold,  would  furnish 
money  to  our  rivals  to  buy  up-to-date  vessels  with  which  the  old  ones  could  not 
compete.  We  can  not  get  enough  vessels  under  existing  conditions  to  do  our 
work. 

"  '  The  great  tank  vessels  of  the  Standard  Oil  Co.  could  carry  grain  in  bulk 
if  it  be  not  contraband,  but  they  could  take  our  grain  to  some  neutral  port.  But 
these  are  only  a  handful.  The  new  vessels  of  the  United  Fruit  are  splendid 
boats  and  could  take  care  of  a  small  part  of  the  passenger  traffic.  As  regards 
our  coasting  trade,  the  vessels  there  could  be  attracted  ol^  at  a  price,  but  the 
people  would  pay  it  many  times  over  in  railroad  rates. 

"  '  We  must  not  relinquish  the  slight  hold  on  West  Indian  and  Mexican  trade, 
upon  which  Canada,  with  common-sense  banking  and  commercial  laws,  is 
making  such  inroads. 

"  '  So  we  are  face  to  face  with  the  problem  of  attracting  foreign  vessels  that 
war  conditions  limit  in  profit  making  to  purchase  by  Americans,  for  they  must 
be  owned  outright. 

"  '  POV/ER  FOE   THE  PRESIDENT. 

" '  The  Congress  should  empower  the  President,  when  a  condition  exists 
which  interferes  with  free  navigation  of  the  oceans  to  such  an  extent  as  to 
militate  against  the  country's  interests,  to  permit  the  registry  of  foreign  vessels 


360      SHIPPING  BOARD^  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE. 

owned  entirely  by  American  citizens  or  State  corporations.  Tliis  would  require 
only  that  the  limit  regarding  age  should  be  omitted  at  the  President's  discretion. 
Of  course  when  the  alarm  of  war  was  ended  he  would  permit  no  more  such 
entries. 

"  '  No  age  limit  should  be  stated  in  such  amendment  at  all,  as  there  are 
vessels  20  years  and  older  that  with  the  use  of  modern  appliances  in  machinery 
could  render  us  needful  service  under  existing  conditions.'  " 

Mr.  Jones.  Mr.  President 

Jklr.  Weeks.  I  yield  to  the  Senator  from  Washington. 

Mr.  Jones.  I  wish  to  ask  the  Senator  from  Massachusetts  what  provision 
the  bill  makes  with  reference  to  the  establishment  of  these  lines;  that  is,  the 
sailing  points  of  ships. 

Mr.  Weeks.  Replying  to  the  Senator  from  Washington,  the  bill  does  not 
provide  anything  definite  ;ibout  the  sailing  points  of  the  ships  or  how  many 
lines  shall  be  established ;  it  leaves  it  optional  with  the  Secretary  of  the  Navy 
to  use  such  vessels  as  are  available  for  the  purpose  to  establish  and  maintain 
lines  as  from  the  west  coast  of  the  United  States  to  the  east  coast  of  South 
America,  through  the  canal,  or  from  the  east  coast  of  the  United  States  to  the 
west  coast  of  South  America,  through  the  canal. 

Mr.  Jones.  Does  it  confine  the  Secretary  to  establishing  lines  from  points 
on  the  west  coast  to  the  east  coast  of  South  America?  Would  it  prevent  him 
from  establishing  a  line  from  points  on  the  west  coast  of  the  United  States  to 
points  on  the  west  coast  of  South  America  also? 

Mr.  Weeks.  I  will  read  the  wording  of  the  bill,  and  the  Senator  can  judge  fot- 
himself.    In  regard  to  the  discretion  which  I  have  spoken  of  the  bill  says : 

"  That  the  Secretary  of  the  Navy  is  hereby  authorized  to  establish  one  or 
more  united  States  Navy  mail  lines,  by  employing  such  vessels  of  the  Navy  as 
in  his  discretion  are  available,  without  impairment  to  the  paramount  duties  of 
the  Navy,  and  as  are  necessary  and  appropriate  for  the  purpose  of  establishing 
and  maintaining  regular  communication  between  the  east  or  west  coast,  or 
both  coasts,  of  the  United  States  and  either  or  both  coasts  of  South  America." 

Mr.  Jones.  Does  the  bill  make  any  provision  with  reference  to  taking  care 
of  any  trade  that  may  be  established  if  these  boats  should  have  to  be  taken  off 
the  trip  lines? 

Mr.  Weeks.  It  can  not  make  provision  for  that,  because  under  such  condi- 
tions the  Government  would  have  no  means  of  carrying  on  the  trade.  It  must  be 
remembered  that  these  are  naval  vessels,  that  their  priniary  purpose  is  use  in 
time  of  war,  and  that  this  plan  proposes  to  make  some  commercial  use  of  them 
in  time  of  peace.  If  war  should  break  out,  then  necessarily  they  must  be  with- 
drawn from  the  service  which  they  are  in. 

Mr.  Jones.  So  it  is  simply  a  makeshift. 

Mr.  Weeks.  It  is  a  makeshift. 

IMr.  .Tones.  But  as  a  makeshift,  if  it  works  out  some  good,  of  course,  we  will 
be  glad  to  have  it;  it  will  be  better  than  nothing. 

Mr.  Thomas.  Mr.  President 

Mr.  Weeks.  I  yield  to  the  Senator  from  Colorado. 

Mr.  Thomas.  Mr.  President,  I  will  not  make  any  objection  to  the  immediate 
consideration  of  this  bill,  but  in  view  of  the  conditions  which  are  now  prevalent 
in  Europe  and  which,  as  the  Senator  from  Missouri  [Mr.  Stone]  well  says, 
are  probably  going  to  become  worse  and  interfere  with,  if  not  destroy,  trade 
relations  between  Europe  and  other  countries,  I  venture  to  suggest  to  the 
Senator  from  Massachusetts  the  propriety  of  removing  a  restriction  in  the  bill. 
In  the  bill  as  it  is  drawn,  communication  may  be  had  between  ports  of  the 
United  States  and  tho.se  of  other  countries.  I  think  it  is  a  step  in  the  right 
direction,  and  while  it  may  be  a  makeshift,  I  feel  very  sure  that  the  experiment 
is  going  to  l)e  so  satisfactory  that  it  will  lead  sooner  or  later  to  the  establish- 
ment of  lines  operated  l)y  the  Government  itself,  a  policy  which  I  have  always 
favored  and  which  I  hope  to  live  to  see  inaugurated. 

Mr.  Wkeks.  In  view  of  the  suggestion  made  by  the  Senator  from  Missouri 
[IMr.  Stone]  that  thei-e  is  under  cfsnsideration  in  the  other  House,  or  in  a  com- 
mittee of  tlip  other  House,  legislation  more  comprehensive  than  that  which  we 
are  now  considering,  I  tliink  we  may  safely,  if  we  do  it  at  all,  pass  the  bill  in  its 
present  form,  with  the  expectation  that  it  will  be  extended  or  changed  to  con- 
form to  the  ccmditions  which  have  arisen  since  the  bill  was  introduced. 

Mr.  TaoiiAS.  Very  well,  Mr.  President ;  I  will  defer  to  the  Senator's  superior 
judgment  concerning  the  su'oject,  but  I  hope  the  bill  will  be  immediately  con- 
sidered and  passed. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT   MARINE.       361 

Mr.  Williams.  Mr.  President 

The   Vice   President.  Does   the    Senator   from    Massachusetts   yield    to   the 
Senator  from  Mississippi? 
Mr.  Weeks.  I  yield. 

Mr.  Williams.  I  thought  the  Senator  was  through.  I  wanted  to  say  some- 
thing upon  the  bill  itself.    I  did  not  want  to  ask  a  question. 

Mr.  JoxEs.  I  wish  to  ask  the  Senator  from  Massachusetts  another  question. 
I  note  that  the  bill  provides  that  the  passengers,  mail,  and  freight  shall  be  car- 
ried "  under  such  regulations  and  at  such  rate  or  rates  as  the  Secretary  of  the 
Navy  may  prescribe,"  leaving  the  matter  of  rates  entirely  to  be  fixed  by  the 
Secretary  regardless  of  the  question  whether  they  are  reasonable  or  nut.  Was 
there  any  consideration  given  to  tlie  question  in  committee  as  to  whether  rates 
which  are  reasonable  should  be  provided? 

Mr.  Weeks.  I  am  not  a  member  of  the  Naval  Committee,  and  I  can  not  tell 
whether  that  subject  was  discussed  or  not ;  but  necessarily  we  can  not  fix  rates 
unless  we  know  what  ships  are  going  to  be  used,  how  they  are  going  to  be  used, 
from  what  ports  they  are  going  to  start,  and  to  what  ports  they  are  going  to 
run ;  and  unless  Congress  fixes  the  rates  in  the  law,  we  must  leave  the  authority 
to  some  one  to  make  the  rates. 

Mr.  Jones.  Does  the  Senator  think  we  ouglit  to  leave  to  the  Secretary  of  the 
Navy  the  fixing  of  the  rates  without  prescribing  some  rule  by  which  he  shall  be 
governed? 

Mr.  Clapp.  If  the  Senator  will  pardon  an  interruption,  of  course  this  being 
our  own  property  there  would  be  no  tribmial  to  pass  upon  the  reason aljlenss  of 
the  rates  charged,  and  it  was  thought  to  be  just  as  well  to  leave  it  to  the  Secre- 
tary without  any  limitation,  because  there  could  be  no  limitation  that  would 
not  be  left  to  the  discretion  of  the  Secretary.  There  being  no  power  above  that 
to  review  Iiis  judgment,  it  was  thought  best  to  put  it  in  that  form.  That  is  the 
reason  why  it  was  put  in  that  shape.    That  applies  only  to  freight,  of  course. 

Mr.  Weeks.  If  the  Senator  from  Mississippi  wishes  to  discuss  the  bill,  I  will 
yield  the  floor  to  him  for  that  purpose. 

Mr.  Willia5is.  Has  unanimous  consent  yet  been  given  for  the  present  con- 
sideration of  the  bill? 

The  Vice  Pkesident.  Unanimous  consent  has  not  yet  been  given. 
Mr.  Williams.  Mr.  President,  reserving  the  right  to  ol)ject,  I  want  to  make  a 
few  remarks  and  to  suggest  an  amendment  or  two  to  the  Senator  from  INIassa- 
chusetts. 

It  is  a  time-worn  phrase  that  emergencies  give  rise  to  bad  law.  We  are  facing 
now  a  great  emergency ;  there  is  no  doubt  about  that.  Our  wheat  is  accumulat- 
ing and  the  countries  of  Europe  are  wanting  it,  and  it  can  be  sent  to  them  only 
at  immense  risk  and  at  immense  expense.  Insurance  rates  are  almost  prohibi- 
tive. 

I  would  have  no  objection  to  the  passage  of  this  bill  if  it  went  through  as  a 
temporary  measure ;  if  it  recited  that  it  was  to  be  in  force  during  the  pendency 
of  the  present  European  war.  To  make  permanently  of  our  sailors  a  set  of 
stevedores  and  handlers  of  freight,  when  they  are  enlisted  for  other  purposes, 
or  to  enlist  men  in  the  Navy  with  the  rank  of  sailors  whose  business  shall  be  to 
handle  freight,  and  to  make  that  a  permanent  policy  of  the  United  States,  seems 
to  me  to  be  very  objectionable. 

Mr.  Weeks.  Mr.  President,  if  the  Senator  will  permit  me  the  suggestion, 
sailors  on  seagoing  ships  never  handle  freight  in  this  day.  Freight  is  handled 
by  stevedores,  who  are  shore  men,  at  both  ends  of  the  line.  Sailors  run  the  ship 
and  have  nothing  whatever  to  do  with  handling  the  freight  at  either  end  of  the 
voyage. 

Mr.  Williams.  Well,  I  believe  the  Senator  is  right  about  that;  in  fact,  he 
must  be,  because  he  knows  precisely  about  it,  and  I  think  that  I,  too,  knew  that, 
but  had  temporarily  overlooked  it.  You  are  proposing,  however,  to  take  sailors 
of  the  United  States,  in  the  uniform  of  the  United  States,  and  put  them  to  work 
on  a  freight  vessel.  If  the  Senator  from  Massachusetts  is  willing,  I  suggest  that 
on  line  5,  page  1,  right  after  the  last  syllable  of  the  word  "  employing,"  which 
occurs  at  the  beginning  of  that  line,  to  insert  the  words  "  during  the  pendency 
of  the  present  European  war,"  until  Congress  can  make  permanent  provision  in 
a  more  satisfactory  way  than  this. 

Then,  I  would  suggest  to  the  Senator  another  amendment,  to  strike  out  the 
period  on  line  10,  page  1,  and  to  add  the  words  "  and  between  the  United  States 
and  the  countries  of  Europe."  The  bill  at  present  would  enable  the  naval  ships 
that  are  temporarily  to  be  engaged  in  carrying  mails  and  passengers  and  freight, 


362      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

to  maintain  "  regular  communication  between  tlie  east  or  west  coast,  or  botli 
coasts,  of  tlie  United  States,  and  either  or  botli  coasts  of  South  America."  The 
crying  need  right  now  is  to  get  our  foodstuffs  to  Europe  in  neutral  ships. 

I,  myself,  think  a  mut-h  more  satisfactory  way  of  dealing  with  this  crisis 
would  iiave  been  to  have  passed  a  joint  resolution  putting  into  the  hands  of  the 
United  States  Government  a  given  sum  of  money  to  buy  ships  of  belligerent 
powers  that  will  be  laid  up  in  our  ports  and  be  for  sale  cheap,  and  during  the 
war,  at  any  rate,  granting  authority  to  the  Government  to  lease  them  to  people 
who  would  operate  them,  or  otherwise,  to  satisfy  the  present  emergency ;  but 
I  Vlo  not  want  to  stand  in  the  way  of  anything  that  anybody  thinks  will  help 
out.  It  seems  to  me  if  the  Senator  will  add,  at  the  point  I  have  indicated, 
the  words  "  and  between  the  United  States  and  the  countries  of  Europe,"  he 
will  broaden  the  scope  of  his  bill  and  will  meet  the  immediate  exigencies  nmch 
more  fully.  Then,  if  he  accepts  the  previous  amendment,  he  will  make  the  bill 
temporary  in  its  character ;  it  will  appear  simply  as  an  emergency  bill. 

Mr.  Weeks.  Mr.  President,  I  do  not  know  that  the  Senator  from  Mississippi 
heard  the  suggestion  made  by  the  Senator  from  Missouri  [Mr.  Stone  J,  that  in 
the  other  House  there  is  now  in  contemplntion  legislation  much  broader  in  its 
scope  than  this. 

Mr.  Williams.  That  is  the  very  reason  I  want  this  to  be  temporary. 

]\Ir.  Weeks.  The  reason  why  this  bill  was  originally  suggested  to  my  mind 
was  that  we  are  about  to  open  the  Panama  Canal.  No  attempt  has  been  made 
by  American  citizens  or  American  capital  to  provide  a  line  of  steamers  which 
can  make  use  of  the  canal.  It  seems  to  me  a  shameful  condition  for  us  to  be 
in,  not  to  liave  a  line  of  steamers  or  lines  of  steamers  from  the  United  States 
to  the  east  and  the  west  coasts  of  South  America  ready  for  service  when  the 
canal  is  ready  for  business. 

Mr.  Williams.  Mr.  President,  I  heard  the  remarks  made  by  the  Senator  from 
Massachusetts  upon  a  previous  occasion  when  this  matter  was  up.  and,  frankly, 
lie  and  I  do  not  agree  about  that.  I  do  not  agree  with  any  idea  of  making  a 
part  of  the  United  States  Navy  freight  handlers  or  passenger  or  mail  carriers 
as  a  permanent  policy  of  the  United  States  Government. 

Mr.  Weeks.  ]\Ir.  President,  I  do  not  wish  the  Senator  from  Mississippi  to 
understand  that  I  approve  of  that  as  a  general  policy  either ;  I  do  not ;  but  I 
am  trying  to  take  advantage  of  the  situation  with  the  only  means  we  have  at 
hand  to  do  it. 

Mr.  Williams.  I  should  like  to  ask  the  Senator  if  he  would  not  agree  to  both 
these  amendments,  the  one  making  this  leigslation  applicable  during  the  pen- 
dency of  the  present  European  war,  and  the  other  amendment  making  it  pos- 
sible now  to  use  these  ships  across  the  Atlantic  to  European  countries  as  well 
as  to  the  other  coast  of  North  America  and  the  east  and  west  coasts  of  South 
America  ? 

Mr.  Weeks.  I  will  agree  to  the  second  one  of  the  amendments.  The  Senator 
will  note  from  a  reading  of  the  bill  that  whether  or  not  these  lines  are  estab- 
lished or  maintained  is  entirely  in  the  hands  of  the  Secretary  of  the  Navy ;  if 
other  means  of  transportation  are  furnished  by  private  capital,  these  ships  can 
be  withdrawn  at  any  time;  but  I  think  it  would  be  inadvisable  to  enter  upon 
this  enterprise  for  the  comparatively  brief  time  which  may  ensue  between  now 
and  the  termination  of  the  European  war.  I  hope  the  Senator  will  not  press 
the  amendment  which  he  has  suggested  making  the  application  of  the  bill 
temporary. 

Mr.  Williams.  Mr.  President,  if  the  Senator  from  Massachusetts  accepts  the 
second  of  the  two  amendments,  then  I  shall  not  object  to  the  immediate  con- 
sideration of  the  bill ;  but  when  the  bill  is  read  and  considered  by  the  Senate,  I 
will  move  to  amend  it  by  offering  the  first  amendment  as  well  as  the  second 
amendment. 

Mr.  Gallinger.  AVill  the  Senator  state  the  second  amendment?  I  did  not 
hear  it. 

Mr.  Williams.  The  second  amendment  is  to  insert  the  words  "and  between 
the  United  States  and  the  countries  of  Europe,"  so  that  the  vessels  proposed  to 
be  used  shall  be  available  for  trans-Atlantic  service.  The  main  thing,  I  think, 
we  ought  to  have  in  view  now  is  getting  our  breadstuffs  across  the  sea  at  high 
prices  when  people  are  needing  them. 

Jlr.  Weeks.  I  will  call  the  attention  of  the  Senator  from  Mississippi  to  the 
fact  that  we  have  something  like  225,000  tons  of  auxiliary  craft  connected  with 
the  Navy  that  could  be  used  for  that  purpose. 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      363 

Mr.  Williams.  That  is  all  the  greater  reason  for  extending  the  scope  of  the 
bill. 

Mr.  Weeks.  I  accept  the  second  amendment  suggested  by  the  Senator  from 
Mississippi. 

Mr.  Williams.  Very  well.  Then,  I  shall  not  object  to  the  immediate  con- 
sideration of  the  bill ;  but  I  repeat  that  when  the  bill  is  up  for  consideration  I 
shall  move  the  first  amendment. 

Mr.  NoEKis.  IMr.  President,  I  should  like  to  know  what  the  second  amendment 
is.    I  think  the  Senate  ought  to  know  something  about  this  bill. 

Mr.  Gallinger.  Let  the  amendment  be  stated. 

The  Vice  President.  The  Secretary  will  state  the  second  amendment  proposed 
by  the  Senator  from  Mississippi. 

The  Secretary.  The  second  amendment  is,  on  page  1,  line  10,  after  the  words 
"  between  the  east  or  west  coasts,  or  both  coasts,  of  the  United  States  and  either 
or  both  coasts  of  South  America,"  to  insert  the  words  "  and  between  the  United 
States  and  the  countries  of  Europe." 

The  Vice  President.  Is  there  objection  to  the  present  consideration  of  the 
bill? 

Mr.  Lewis.  Mr.  President,  pending  the  submission  of  the  request  for  unani- 
mous consent,  may  I  be  permitted  to  interrupt  the  Senator  from  Massachusetts 
to  make  an  inquiry?  I  desire  to  say  that  some  time  ago  I  introduced  a  bill  in 
this  body  having  for  its  object  the  construction  by  the  Government  of  100  ships, 
to  be  built  by  the  Government  and  leased  to  private  operators,  for  purposes  simi- 
lar to  those  certainly  implied  by  the  pending  bill.  I  desire  to  ask  the  Senator 
If  there  is  any  provision  in  this  bill  that  permits  the  President  to  have  the  dis- 
cretion as  to  when  these  vessels  may  be  impressed  into  the  service  of  the  Gov- 
ernment should  any  necessity  require,  while  they  are  being  used  for  commercial 
purposes  ? 

Mr.  Weeks.  Mr.  President,  that  power  is  left  in  the  hands  of  the  Secretary  of 
the  Navy.  The  vessels  may  be  recalled  at  any  time  for  their  primary  purposes, 
which  is  the  service  of  the  Government. 

Mr.  I^ewis.  Such  being  the  provision  of  the  bill  introduced  by  me,  that  was 
the  information  I  sought  at  this  time,  and  I  am  satisfied  with  it. 

The  Vice  President.  Is  there  objection  to  the  present  consideration  of  the 
bill? 

There  being  no  objection,  the  Senate,  as  in  Committee  of  the  Whole,  proceeded 
to  consider  the  bill. 

Th  Vice  President.  Is  there  objection  to  the  amendment  proposed  by  the 
Senator  from  Mississippi?  In  the  absence  of  objection,  the  amendment  is  agreed 
to.  The  bill  is  in  the  Senate  as  in  Committee  of  the  Whole,  and  open  to  amend- 
ment. 

Mr.  Williams.  I  now  move  the  amendment  which  I  send  to  the  desk. 

The  Vice  President.  The  amendment  will  be  stated. 

The  Secretary.  After  the  word  "  employing,"  in  line  5,  page  1,  it  is  proposed 
to  insert  "  during  the  pendency  of  the  present  European  wars." 

Mr.  Williams.  Mr.  President  and  Senators,  I  have  already  stated  my  reasons 
for  that  amendment,  and  I  think  the  reasons  are  conclusive.  I  do  not  think  the 
policy  of  having  the  Navy  used  for  the  purpose  of  freight  handling  and  passen- 
ger transportation  and  mail  carrying  is  a  policy  which  should  recommend  itself 
to  the  people  of  the  United  States,  as  a  permanent  thing.  A  great  emergency 
and  a  great  crisis  excuse  bad  legislation,  if  it  is  temporary,  when  it  accom- 
plishes a  purpose  which  seems  essential  for  the  country ;  but  I  think  it  bad 
policy  to  put  upon  the  statute  books  this  sort  of  legislation,  especially  when  you 
consider  the  provision  on  page  2,  which  reads : 

"  The  enlisted  strength  of  the  Is^avy,  as  now  or  hereafter  authorized  by  law,  is 
hereby  increased  by  the  number  of  men  required  to  man  the  vessels  so  em- 
ployed, and  the  Secretary  of  the  Navy  is  hereby  authorized  to  enlist  such 
number  of  men  in  the  Navy  for  such  terms  of  enlistment,  not  to  exceed  four 
years,  as  may  be  desirable,  and  to  distribute  the  number  of  men  so  enlisted 
among  the  various  ratings  of  the  Navy." 

When  you  consider  that  that  clause  is  in  the  bill  giving  the  Secretary  of  the 
Navy  a  power  to  increase  the  Navy  to  indefinite  extent — while  it  is  a  power 
that  might  be  given  in  the  face  of  a  great  crisis,  to  give  it  to  one  of  the  execu- 
tive departments  permanently  strikes  me  as  almost  as  bad  policy  as  the  other 
feature  to  which  I  referred,  to  wit,  the  converting  of  a  part  of  the  Navy  into 
freight  handlers. 


364      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

There  is  a  great  deal  in  tlie  esprit  du  corps  of  a  body  of  men  serving  in  the 
Army  and  Navy.  Men  enlist  in  the  Army  or  the  Navy  because  they  regard  that 
as  a  noble  and  patriotic  pursuit ;  they  have  not  enlisted,  and  probably  would 
not  enlist,  if  they  were  to  go  upon  ships  that  were  to  be  freight  handlers  and 
passenger  carriers.  That  pride  which  the  sailor  has  in  his  business,  which  is 
his  country's  business  and  which  ought  to  be  a  public  busines,  entirely  devoted 
to  the  meeting  of  the  enemies  of  his  country,  ought  not  to  be  torn  down ;  and 
this  sort  of  policy  does  tear  it  down  to  a  very  large  extent.  It  decreases  the 
sailor's  self-respect.  I  might  be  willing  to  go  into  the  Navy  and  serve  there  or 
into  the  Army,  but  I  would  not  be  willing  in  eitlier  capacity  to  go  and  do 
something  else  that  had  nothing  to  do  with  the  profession  of  arms.  So  I  think 
it  is  but  right  and  proper  that  this  measure  should  be  confined  to  the  emergency 
that  is  now  facing  us. 

I  have  no  doubt  of  the  fact  that  every  sailor  in  the  Navy  will  be  glad  to  do 
this  service  for  the  country  in  time  of  war  or  in  time  of  the  possibility  of 
war  as  affecting  liis  own  country,  or  in  times  of  war  between  other  peoples ; 
but,  speaking  for  myself,  if  I  were  one  of  the  enlisted  men  of  the  Navy,  that 
would  strike  me  as  having  taken  a  very  unfair  advantage  of  me. 

Mr.  Hitchcock:.  Mr.  President,  will  the  Senator  yield? 

Mr.  Williams.  Yes. 

Mr.  Hitchcock.  Does  the  Senator  think  that  any  officers  or  men  in  the 
Army  have  felt  that  they  were  being  degraded  by  being  put  to  a  useful  purpose? 

Mr.  Williams.  Oh,  no. 

Mr.  Hitchcock.  The  officers  of  the  Army  of  the  United  States  are  in  charge 
of  the  engineering  work  on  our  rivers  and  harbors. 

Mr.  Williams.  Yes ;  but  the  enlisted  men  of  tlie  Army  do  not  go  down  and 
build  the  levees. 

Mr.  Hitchcock.  If  the  Senator  will  allow  me  to  finish.  They  have  been  in 
charge  of  the  engineering  work  on  the  Panama  Canal. 

]Mr.  Williams.  I  know  that. 

Mr.  Hitchcock.  Tliey  have  been  in  charge  of  the  engineering  work  recently 
on  in-igation  projects. 

Mr.  Williams.  I  know  that. 

Blr.  Hitchcock.  They  have  built  wireless  telegraph  lines  to  Alaska. 

Mr.  W^illiams.  Yes. 

Mr.  Hitchcock.  And  cable  lines  to  the  Philippine  Islands. 

Mr.  Williams.  Yes. 

Mr.  Hitchcock.  And  I  can  see  no  reason  why  the  officers  and  men  engaged  in 
an  honorable  pursuit,  carrying  on  a  very  worthy  enterprise  for  the  people, 
should  feel  degraded  for  being  used  for  that  purpose. 

Mr.  Williams.  Mr.  President,  the  illustrations  which  are  furnished  by  the 
Senator  from  Nebraska  "  have  nothing  to  do  with  the  case,"  any  more  than 
"  the  flowers  that  bloom  in  the  spring."  An  Army  officer  who  performs  en- 
gineering work  is  doing  work  in  the  line  of  his  chosen  profession,  of  which  he 
is  very  proud.  When  an  officer  goes  upon  the  IMississippi  River  Commission 
or  the  Panama  Canal  Commission  and  takes  charge  of  great  engineering  under- 
takings, or  when  he  goes  to  Alaska,  for  example,  to  lay  out  the  line  of  the 
railroad  which  is  to  be  built  there  and  to  supervise  its  construction,  it  is  a  part, 
and  the  very  proudest  part,  of  the  profession  which  he  has  embraced.  He  is 
not  only  an  officer  but  he  is  an  engineer,  and  he  is  doing  engineering  work  for 
his  country.  That  is  a  totally  different  thing  from  putting  soldiers  to  work 
building  levees.  If  you  should  carry  it  that  far,  the  soldier  would  feel  that 
he  had  been  taken  advantage  of. 

I  do  not  mean  that  the  work  degrades.  The  man  who  is  building  a  levee  is 
just  as  good  a  citizen  and  doing  just  as  useful  work  as  a  soldier  wearing  the 
uniform  of  the  United  States,  but  one  of  them  wanted  to  volunteer  to  l)uild 
levees  and  to  get  paid  for  it,  while  the  other  wanted  to  volunteer  to  wear  the 
uniform  of  his  country  in  a  position  where  his  pay  does  not'  amount  to  any- 
thing or  is  so  small  that  it  does  not  enter  into  it  as  a  consideration  at  all.  I 
hope  that  the  amendment  making  the  provisions  of  the  bill*  temporarily  will  be 
adopted  by  the  Senate. 

Mr.  Weeks.  Mv.  President,  this  bill  was  introduced  long  before  there  was  any 
expectation  of  European  trouble.  It  has  been  extended  by  the  amendment 
offered  by  the  Senator  from  Mississippi,  so  that  the  ships  may  be  used  to  assist 
in  preventing  any  distress  which  may  arise  on  account  of  our  people  being  un- 
able to  get  transportation  from  Europe.    But  the  purpose  of  the  bill  is  not  tem- 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      365 

porary ;  the  purpose  of  the  bill  is  to  establish,  until  private  capital  undertakes 
to  do  so,  a  line  of  steamers  to  South  America.  So  I  hope  the  amendment  offered 
by  the  Senator  from  Mississippi  will  not  prevail. 

Mr.  Smith  of  Georgia.  Mr.  President,  I  think  that  it  is  extremely  wise  to  pass 
this  bill,  and  to  pass  it  at  once ;  and,  in  connection  with  passing  it,  we  may 
well  consider  the  responsibility  which  falls  upon  us  even  beyond  this  bill.  I 
think  the  responsibility  falls  on  this  Congress  to  see  that  provision  is  made  to 
insure  the  transportation  of  the  agi'icultural  products  and  the  manufactured 
products  of  this  country  during  the  war,  if  it  shall  last.  It  is  very  timely  to 
pass  this  measure ;  and  I  hope  that  that  committee  of  the  Senate  which  would 
naturally  have  jurisdiction  of  this  subject  and  that  Senators  generally  will 
consider  the  question  of  enacting  legislation  that  will  facilitate  the  movement 
of  all  of  our  wheat  which  must  go  abroad,  the  movement  of  all  our  cotton  and 
tobacco  that  must  go  abroad,  and  the  movement  of  the  manufactured  products 
as  well.  I  do  not  think  any  subject  can  be  considered  by  us  that  is  of  greater 
importance,  and  I  believe  it  is  our  duty  to  see  that  such  legislation  is  passed. 

Mr.  Williams.  Mr.  President,  I  wish  to  modify  my  amendment,  by  unanimous 
consent,  by  adding  to  it  the  words  "  and  for  the  period  of  three  months  there- 
after," because  there  might  be  some  question  as  to  just  when  the  European  wars 
did  close.  I  ask  unanimous  consent  to  modify  it  to  that  extent,  so  that  it  shall 
read  "  during  the  pendency  of  the  present  European  wars  and  for  the  period  of 
three  months  thereafter." 

Mr.  Weeks.  My  objection  would  rest  in  the  same  way  against  the  amendment 
as  modified. 

Mr.  NoRRis  and  Mr.  Clapp  addressed  the  Chair. 

The  Vice  President.  Does  the  Senator  from  Massachusetts  yield  to  tlie  Sena- 
tor from  Nebraska? 

Mr.  Weeks.  I  yield  first  to  the  Senator  from  Nebraska. 

Mr.  NoKEis.  I  was  not  aware  that  the  Senator  from  Massachusetts  had  the 
floor.    I  thought  I  was  entitled  to  the  floor  in  my  own  right. 

Mr.  Clapp.  I  addressed  the  Chair. 

The  Vice  President.  The  Chair  will  recognize  the  Senator  from  Minnesota, 
for  a  change. 

Mr.  Clapp.  What  I  desired  to  say  was  this 

Mr.  Weeks.  Have  I  not  the  floor,  Mr.  President? 

The  Vice  President.  The  Senator  from  Massachusetts  yielded  to  the  Senator 
from  Mississippi.  The  Senator  from  Mississippi  desired  to  take  the  floor  and 
speak  on  the  bill,  and  the  Senator  from  Massachusetts  said  he  would  yield  to 
him. 

Mr.  Weeks.  I  suppose  I  took  the  floor  again. 

Mr.  Clapp.  The  Senator  can  take  it  again. 

In  response  to  what  the  Senator  from  Georgia  said,  I  desire  to  make  this  sug- 
gestion :  Is  it  not  possible  that  we  are  drifting  away  from  the  real  purpose  of 
this  bill,  and  yet  in  connection  with  the  real  purpose  of  the  bill  we  can  serve 
the  purpose  of  the  hour  that  has  so  suddenly  arisen?  By  amending  the  bill  so 
as  to  use  these  vessels  in  trade  with  other  nations  we  meet  this  sudden  emer- 
gency. I  do  not  believe  we  should  permit  that  sudden  emergency  to  draw  us 
away  from  the  real  purpose  of  this  bill,  which  is  to  take  these  vessels  as  they 
can  be  utilized  from  time  to  time  and  put  them  into  the  channels  of  trade. 
This  would  not  at  all  conflict  with  the  suggestion  of  the  Senator  from  Georgia 
that,  in  addition  to  this,  we  ought  at  this  time  to  take  up  the  question  of  meet- 
ing more  fully  the  European  situation. 

So  I  hope  we  will  pass  this  bill  with  the  amendment  already  offered  by  the 
Senator  from  Mississippi,  which  makes  the  bill  applicable  to  the  new  condition, 
still  maintaining  the  original  theory  and  purpose  of  the  bill,  and  not  interfering 
at  all  with  the  committee  taking  up  at  this  time  the  earnest  consideration  of 
ibakirg  other  necessary  provision  to  meet  the  condition  due  to  the  war  in 
Europe. 

Mr.  Nokris.  Mr.  President,  there  is  very  much  that  I  should  like  to  say  on 
this  bill  were  it  not  so  near  the  close  of  the  morning  hour ;  but,  inasmuch  as 
I  do  not  want  to  be  instrumental  in  bringing  about  its  defeat  by  delay,  I  shall 
not  consume  much  of  the  time  and  shall  not  be  able  to  say  what  I  should  like 
to  say  on  this  occasion. 

I  am  delighted  to  hear  so  many  Senators  express  themselves  in  favor  of  the 
principle   involved   in   this  bill.     I   remember   that  for   several   years   I   have 

82910—16 24 


366      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

been  trying  to  get,  as  an  amendment  on  various  bills,  something  similar  to 
this — to  have  the  ships  leased  to  the  Panama  Railroad  Co.,  a  corporation 
dlreadj'  engaged  in  commerce,  and  use  them  for  the  identical  purposes  that 
are  provided  for  here.  I  have  always  met  with  such  terrible  opposition,  how- 
ever, from  many  of  the  men  who  now  seem  to  be  favorable  to  this  idea  that 
it  affords  me  a  great  deal  of  pleasure  to  recognize  the  conversion  of  so  many 
legislators  to  the  idea  that  we  ought  to  take  advantage  of  the  opening  of 
the  Panama  Canal  by  providing  Government  ships  for  the  purpose  of  engaging 
in  commerce  between  the  ports  of  North  and  South  America. 

On  the  24th  day  of  January  I  offered  an  amendment  to  the  then  pending 
Alaska  railroad  bill  pi-oviding  for  the  building  of  10  ships,  I  think,  that 
should  be  leased  to  the  Panama  Railroad  Co.,  and  should  be  used  by  them  in 
commerce  between  the  ports  of  North  and  South  America.  The  amendment 
was  debated  at  considerable  length,  and  had  only  11  votes  in  its  favor  when 
it  finally  came  to  a  vote.  An  examination  of  the  roll  call  on  the  amendment 
on  that  day  will  disclose  that  many  who  seemed  to  be  opposed  to  the  idea  then 
are  favorable  to  it  now. 

Shortly  afterwards,  within  a  very  few  days  after  that  amendment  was  de- 
feated, the  junior  Senator  from  Massachusetts  [Mr.  Weeks]  introduced  a  reso- 
lution that  was  the  forerunner  of  the  bill  that  is  now  before  the  Senate.  It 
was  reported  to  the  Senate  a  few  days  later  by  the  senior  Senator  from  Massa- 
chusetts [Mr.  Lodge],  and  that  resolution  was  passed,  calling  on  the  Secretary 
of  the  Navy  for  information.  The  Secretary  of  the  Navy  seemed  to  be  favor- 
able to  it  and  the  result  was  a  favorable  report  and  this  bill,  which  was  then 
introduced  and  referred  to  the  Committee  on  Naval  Affairs  and  is  now  reported 
back  to  the  Senate  with  a  unanimity  both  of  the  committee  membership  and 
of  the  membership  of  the  Senate,  that  assures  its  passage  within  the  next  few 
moments. 

Mr.  West.  Mr.  President 

The  Vice  President.  Does  the  Senator  from  Nebraska  yield  to  the  Senator 
from  Georgia? 

Mr.  NoRRis.  I  yield  to  the  Senator  for  a  question. 

Mr.  West.  That  is  all  I  wish  to  ask.  If  tlie  10  ships  referred  to  were 
built  and  run  in  conjunction  with  railroads  in  Alaska,  would  not  that  come 
under  the  same  objection  as  to  the.se  trans-Atlantic  railroads  having  vessels  to 
run  through  the  Panama  Canal? 

Mr.  NoRRis.  The  Senator  must  understand — and  I  presume  the  Senator 
does  understand — that  the  stock  of  the  Panama  Railroad  Co.  is  owned  entirely 
by  the  United  States.  I  think  it  would  have  been  much  better  to  have  provided 
that  these  ships  should  be  leased  to  the  Panama  Railroad  Co.  and  operated  by 
them.  They  are  Government  boats.  The  Government  owns  all  the  property  of 
the  Panama  Railroad  Co.,  but  it  is  a  regular  corporation  organized  under  the 
laws  of  the  State  of  New  York.  It  would  have  been  much  better  to  have 
permitted  that  corporation,  already  engaged  in  commerce,  already  the  owner 
of  ships  and  of  a  railroad,  to  have  operated  these  ships  in  the  regular  business 
way  between  the  ports  of  North  and  South  America.  It  was  said  then,  however, 
"  Why,  that  is  going  into  Government  ownership ;  that  is  approaching  socialism," 
and  some  said,  "  That  is  almost  anarchy."  We  have  advanced  so  rapidly, 
however,  that  now  we  come  to  the  proposition  that  we  will  eliminate  this  inter- 
mediary corporation  and  turn  the  matter  over  to  the  Secretary  of  the  Navy, 
who  is  to  be  supreme  in  the  rates  he  shall  charge,  the  ports  he  shall  make,  and 
the  ships  he  shall  use.  He  can  do  anything  he  pleases.  He  can  commence 
where  he  likes  and  stop  where  he  pleases. 

That  is  better  than  nothing,  I  think.  I  have  faith  in  the  Secretary  of  the 
Navy.  I  believe  he  will  take  up  this  work  in  a  good,  businesslike  way,  and 
accomplish  something.  I  think,  however,  it  would  have  given  the  project  a  much 
better  show  in  the  business  world  and  would  have  developed  our  commerce  very 
much  better  if  we  had  turned  it  over  to  a  corporation  controlled  by  the  Gov- 
ernment already,  and  for  a  good  many  years  engaged  in  commerce,  and  whose 
business  it  is  to  deal  in  things  of  this  kind. 

The  proposition  to  let  the  Government  build  ships — and  the  Government  has 
built  the  ships,  or  some  of  them,  and  owns  all  of  them — and  turn  them  over  to 
the  Panama  Railroad  Co.  was  objected  to,  as  I  have  said,  because  it  looked  like 
Government  ownership.  That  did  not  appeal  to  me.  If  it  was  a  good  thing, 
whether  it  was  Government  ownership  or  not,   it  seemed  to  me  that  it  was 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      367 

proper.  It  seemed  to  me  that  it  was  the  proper  way  to  develop  commerce  be- 
tween North  and  South  America.  The  provision  that  I  offered  then  as  an 
amendment  to  the  bill  also  provided  for  the  shipping  of  coal  from  Alaska  through 
this  same  modus  operandi. 

If,  however,  we  want  to  take  a  step  further  and  turn  over  the  matter  to  the 
Secretary  of  the  Navy,  I  for  one  am  delighted  that  so  many  of  these  ultra- 
conservative  Senators  have  not  only  been  converted  to  the  idea,  but  have  taken 
a  step  in  advance,  and  have  gone  further  than  had  ever  been  proposed  before. 
Instead  of  opposing  their  plan,  as  they  always  did  mine,  I  shall  to  the  best  of 
my  ability  be  vei'y  glad  to  support  them  in  their  efforts  in  this  connection,  which 
I  believe  to  be  commendable. 

I  \v;int  to  say  while  I  am  on  my  feet  that  I  am  opposed  to  the  amendment,  now 
pending,  of  the  Senator  from  Mississippi.  If  that  amendment  prevails,  the 
Secretary  of  the  Navy  will  have  this  authority  only  during  the  present  war  in 
Europe,  and  for  three  months  thereafter.  It  seems  to  me  that  we  ought  to 
make  it  permanent.  If  we  are  going  to  trust  these  matters  to  the  Secretary  of 
the  Navy  during  the  existence  of  a  foreign  war,  there  is  no  reason  why  we 
should  not  trust  him  in  the  same  way  in  time  of  peace.  It  will  be  just  as  im- 
portant, in  my  judgment  at  least,  as  far  as  the  trade  between  North  and  South 
America  is  concerned,  after  the  European  war  is  over  as  it  is  during  the  ex- 
istence of  the  European  war. 

Mr.  SwANsoN.  ISIr.  President,  I  am  very  earnestly  in  favor  of  the  passage  of 
this  measure  as  it  has  been  amended.  It  was  reported  from  the  Naval  Affairs 
Committee,  of  which  I  am  a  member.  I  think  it  meets  an  emergency  that  is 
very  urgent  at  this  time.  It  will  enable  us  to  make  it  immediately  available 
for  the  exportation  of  our  wheat,  our  tobacco,  and  our  cotton. 

I  am  glad  the  Senator  from  Massaduisetts  accepted  the  amendment  offered 
by  the  Senator  from  Mississippi,  and  I  simply  wish  to  express  my  cordial  sup- 
port of  the  measure. 

Mr.  Maktine  of  New  .lersey.  Mr.  President,  I  desire  to  dissent  from  the 
thought  advanced  by  my  friend  the  Senator  from  Mississippi.  I  feel  that  it 
will  not  hurt  a  naval  olHcer  to  liandle  a  bushel  of  wheat,  or  a  bag  of  grain,  or 
a  bag  of  potatoes.  I  do  not  believe  ho  will  have  much  occasion  to  do  it ;  but 
at  least  it  will  tend  to  develop  muscle  in  the  man.  and  from  the  looks  of  many 
of  them  God  knows  I  think  they  need  it.  [Laugliter.]  I  think  they  would  be 
better  men,  I  tliink  they  would  be  more  considerate  men,  if  sometimes  they  had 
found  occasion  to  put  on  a  pair  of  overalls. 

Mr.  President,  I  consider  that  a  Senator  is  quite  as  good  as  a  naval  officer, 
but  I  want  to  say  that  there  is  one  Senator  in  this  body  who  has  worn  over- 
alls on  many  occasions,  handling  grain,  if  you  clioose,  and  potatoes.  I  do  not 
believe  the  naval  oflicer  would  have  much  to  do  in  that  direction,  for  the  work 
would  be  done  by  stevedores  and  sailors ;  but  this  nonsense  that  because  a  man 
happens  to  wear,  through  the  grace  of  the  country,  a  pair  of  epaulets  he  is  a 
little  too  good  to  liandle  that  which  makes  food  for  himself  and  the  rest  of 
mankind  is  absolutely  disgusting  to  me. 

The  Vice  President.  The  question  is  on  agreeing  to  the  amendment. 

Mr.  White.  Mr.  President,  I  desire  to  hear  the  amendment  read. 

The  Vice  President.  The  Secretary  will  state  the  amendment. 

The  Secretary.  After  the  word  "  employing,"  in  line  5,  it  is  proposed  to  in- 
sert a  comma  and  tlie  words  "  during  the  pendency  of  the  present  European 
wars,  and  for  the  period  of  three  months  thereafter." 

The  ^'ICE  President.  The  question  is  on  agi'eeing  to  the  amendment. 

The  amendment  was  rejected. 

The  bill  was  reported  to  the  Senate  as  amended,  and  the  amendment  was  con- 
curred in. 

Mr.  Williams.  Mr.  President,  before  the  bill  passes  the  title  ought  to  be 
arhended. 

Mr.  Gallinger.  After  it  passes. 

Mr.  Williams.  It  ought  to  be  made  to  read  "  between  the  United  States, 
South  America,  and  Europe." 

The  bill  was  ordered  to  be  engro.ssed  for  a  third  reading,  read  the  third  time, 
and  passed. 

The  title  was  amended  so  as  to  read :  "A  bill  to  establish  one  or  more  United 
States  Navy  mail  lines  between  the  United  States,  South  America,  and  Europe." 


368      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Exhibit  No.  6. 

Congestion  of  Freight  and  Embargoes  by  Railroads  Primarily  on  Account 
OF  Lack  of  Ships  to  Move  Otm  Export  Trade. 

BALTIMORE    &    OHIO    RAILROAD    CO. 

Embargoes  on  shipments  over  its  lines  moving  via  New  York : 

December  2.  Iron  and  steel  for  export. 

December  12.  Lumber  and  staves  for  export. 

December  29.  Lumber,  staves  and  hay,  to  include  all  shipments  to  New  York 
for  export,  coastwise,  and  domestic  delivery. 

January  7.  All  freights  for  reshipment. 

No  embargo  on  freight  for  local  deliveries  in  New  York  Harbor,  except  lum- 
ber, staves,  and  hay. 

Cars  loaded  with  freight  at  New  York  terminal,  2,078;  standing  on  side- 
tracks leading  into  New  York,  4,437. 

It  was  stated  on  February  14,  1916,  that  conditions  had  improved  on  this 
road.  Lack  of  ocean  tonnage  has  contributed  to  the  accumulation  of  this 
freight,  but  it  is  impossible  to  say  to  what  extent. 

Marine  equipment :  Lighters,  95 ;  steam  lighters,  2 ;  tugs,  10 ;  and  floats,  49. 

Average  of  cars  arriving  and  released,  445  per  day ;  maximum  capacity  of 
terminals,  3,000  cars ;  working  capacity,  2,000  to  2,500. 

LEHIGH    VALLEY    RAILROAD    CO. 

Embargoes  declared: 

December  1.  Hay  billed  for  New  York  Harbor,  or  for  lighterage  delivery. 

December  5.  Lumber  and  flour  for  export  via  New  York. 

December  8.  All  carload  shipments  df  lumber  for  New  York. 

December  6.  Locomotives  and  parts,  machinery,  and  all  iron  and  steel  arti- 
cles, carloads  for  New  York.  P^xceptions :  Munitions  and  ordnance  materials, 
etc.,  for  export. 

December  6.  Carload  shipments  of  wire,  nails,  and  rails  for  New  York. 

December  6.  Hay  and  straw,  for  New  York. 

December  16.  Cement  to  any  part  east  of  Newark,  N.  .1. 

December  20.  All  east-bound  traffic  from  all  Lehigh  Valley  stations,  except 
flour,  grain  products,  perishable  freight,  live  stock,  less  than  carload  lots  of 
merchandise,  lake  grain,  cement,  coal  and  coke,  munitions,  etc. 

December  22.  Embargo  of  December  20  modified  to  permit  barbed  wire  in 
carload  lots  for  export. 

December  20.  All  eastbound  traffic  from  connecting  lines  except  empty  Lehigh 
Valley  cars  and  freight  billed  for  delivery  at  Lehigh  Valley  stations  west  of 
Jersey  City ;  flour,  grain  products,  explosives,  live  stock,  provisions,  perishable 
freight  less  than  carload  lots,  coke,  coal  and  fuel  oil. 

December  22.  Above  modified  to  allow  crude  borates  in  carload  lots. 

December  30.  Modified  to  allow  carload  lots  of  copper  and  lead  bullion  to 
New  York. 

December  31.  Modified  to  allow  all  eastbound  freight  except  for  New  York 
Harbor,  Brooklyn  E.  D.  Terminal,  New  York  Dock  Co.,  and  Bush  Dock  Co. 
The  following  only  to  be  accepted  to  these  destinations :  Flour  and  grain 
products,  high  explosives,  live  stock,  provisions,  dressed  beef,  perishable 
freight,  coal,  coke  and  fuel  oil,  borates,  copper  and  lead,  and  less  than  carload 
shipments. 


Cars  on  hand,  Jersey  City 

On  sidings 

In  terminal  yards 

Total 


Dec.  1, 
1915. 


2,632 
1,191 
7,510 


11,333 


Dec.  20, 
1915. 


2,304 
3,940 
5,991 


12, 235 


Jan.  3, 
1916. 


3,106 
3,516 
5,774 


12,396 


Embargo  caused  by  lack  of  ships,  but  impossible  to  say  the  exact  proportion 
due  to  this  cause. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      369 
DELAWARK,    LACKAWANNA    &    WESTERN    RAILROAD   CO. 

November  28.  Embargo  against  export  freight. 

Cars. 

Export  freight  at  Hobokeu  terminal 2,500 

Domestic  freight  at  Hobolien  terminal 1,600 

Export  freight  on  line 2,000 

Domestic  freight  on  line 600 

Freight  for  New  York,  blockaded 6,700 

Embargo  caused  very  largely  by  lack  of  ships,  also  by  manufacturers  who 
have  taken  contracts  f.  o.  b.,  in  starting  the  freight  without  any  knowledge  as 
to  whether  it  could  be  handled  at  the  ports.  Embargo  on  domestic  tratiic  aa 
follows: 

January  12.  Hay. 

December  19.  I'ig  iron. 

January  11.  Iron  piping  for  New  York  piers. 

December  20.  Cyanimide. 

NEW   YORK   CENTRAL   RAILROAD  CO. 

Dates  when  embargoes  became  effective: 
December  11.  Declared. 
December  IG.  Extended. 
December  25.  Modified. 
January  6.  Modified. 
January  11.  Modified. 
January  12.  Modified. 

Reason:  Failure  of  consignees  to  remove  freight,  esi)ecially  for  delivery  to 
vessels,  both  for  export  and  coastwise. 
Cars  blocked,  January  13: 

Sixtieth  Street  Terminal 1,011 

Thirty-third  Street  Terminal 719 

Hudson  and  electric  divisions 335 

Total .L 2,065 

Marine  equipment:  Tugboats.  19;  lighters,  6;  car  floats,  52;  hoisting  barges, 
34;  scows  and  covered  barges,  219;  grain  boats,  133. 

Cars. 

Arriving 1, 189 

Forwarded    1, 162 

Released 416 

Capacity  of  terminals 4,939 

NEW  YORK,   NEW   HAVEN  &   HARTFORD  RAILROAD  CO. 

Embargo  issued  December  24,  1915,  against  its  Poughkeepsie  Bridge. 

December  27,  1915.  Against  all  business  via  gateways,  except  coal,  coke,  print 
paper,  perishable  property,  and  human  food,  when  coming  from  connecting 
lines. 

Reason  for  embargoes:  A  greater  volume  of  freight  offered  than  the  New 
Haven  could  handle  over  its  tracks  and  through  its  terminals.  Due  to  the  lack 
of  ships  in  so  far  as  the  congestion  on  other  roads  may  be  due  to  lack  of  ships. 

Statistics  of  total  system,  January  6,  1916: 

Miles  of  track 7,  592 

Cars  awaiting  unloading 13. 183 

Cars  awaiting  loading 3,  545 

Cars  set  out  between  terminals 2,063 

CENTRAL  RAILROAD  OF   NEW  JERSEY. 

Embargoes  declared :  Late  in  October,  on  export  freight.  Many  others  de- 
clared, .some  rescinded,  others  modified. 

Cause:  Shipping  for  export  without  securing  bottoms  for  such  export.  Lack 
of  ships  almost  entirely  the  cause  of  embargo  on  export  freight.  Storms,  etc., 
other  causes. 


370      SHIPPIXG  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

For  the  moiitli  of  December,  1915,  the  cars  standing  in  Jersey  City  yards 
varied  from  3,616  to  5,007,  averaging  daily  about  4,200  to  4,500;  cars  with 
export  freight  averaging  3,300  to  3,600  per  day,  as  high  as  4,010.  Local  delivery 
cars  averaging  about  800  per  day. 

Loaded  cars  standing  along  line  were  as  high  as  425  for  local  delivery  and 
512  for  export  per  day.    All  have  been  brought  in  by  December  31. 

On  December  31  cars  were  being  unloaded  on  the  ground  at  Jersey  City  for 
local  delivery,  and  1,750  cars  were  then  standing  for  export. 

Only  answer  as  to  when  congestion  and  embargoes  will  end  is  when  the 
supply  of  ships  in  the  carrying  trade  becomes  normal. 

PENNSYLVANIA  BAILBOAD  CO, 

Embargoes  declared: 

December  13,  1915.  No.  3457,  all  freight,  with  a  few  exceptions,  consigned  to 
New  York  lighterage,  whether  for  export,  coastwise,  or  domestic. 

No.  3458,  all  freight,  with  exceptions,  consigned  to  Waverly,  including  Newark 
and  points  east  thereof. 

Reason  for  embargoes :  Large  accumulation  of  loaded  cars. 

Conditions  December  21,  maximum  congestion  of  lighterage  freight : 

Cars. 

On  New  Jersey  division 2,  650 

On  other  divisions 4, 178 

On  piers 1,  987 

Open-car  freight  unloaded  on  ground 4,078 

Total 12,  873 

Conditions  December  19,  maximum  congestion  of  freight  for  delivery  to  or 
through  New  York: 

Cars. 

On  New  Jersey  division 5,  340 

On  other  divisions 12,  608 

Total 17,  948 

Conditions  had  impi-oved  January  5,  1916,  embargo  No.  3458  is  lifted  and  No. 
3457  modified. 

Cars. 
Condition  of  lighterage  freight :  Cars. 

On   wheels 4,  658 

On   piers 1,  800 

Unloaded  on  ground 3,  500 

Total 9,958 

Export  tonnage  has  greatly  increased.     Some  ship  brokers  claim  to  have 
enough  ships ;  others  ai'e  very  noncommittal. 
Estimated  tonnage  of  line  awaiting  foreign  shipment: 

Tons. 

In  cars  along  line  and  in  terminals 210,  000 

Coming  on  weekly : 84, 000 

Outgoing  weekly 34,  000 

EEIE  BAILBOAD  CO, 

February  11,  1916.  Conditions  have  not  changed  since  January  15,  Situation 
as  follows : 

In  cars,  Jersey  City  terminal 1,  615 

On  piers  or  in  warehouses 1,  373 

Unloaded  on  company's  property 515 

Held  on  line 1,405 

Total 4,908 

Exhibit  No.  7. 

The  following  are  extracts  from  newspapers  regarding  freight  congestion,  due 
primarily  to  the  lack  of  ships  to  handle  our  export  trade : 

[New  York  World.] 

Baltimoee,  Md.,  January  3. — The  Western  Maryland  Railroad  to-day  issued 
an  order,  effective  at  the  close  of  business  to-morrow,  placing  an  embargo  until 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.       371 

further  notice  on  all  shipments  of  grain  to  this  port  for  export.     There  are 
nearly  2,000,000  bushels  of  grain  in  storage  here  awaiting  ships. 

(New  York  Tribune,  Dec.  25,  1915.] 

A  coal  famine  confronts  New  York.  This  new  serious  aspect  of  the  temporary 
freight  embargo  that  is  cutting  New  York  off  from  everything  except  foodstuffs 
was  revealed  yesterday. 

Dealers  who  have  contracts  to  supply  public  institutions  call  the  situation 
desperate.  The  price  of  soft  and  anthracite  coal  is  going  up  rapidly,  and  is 
expected  to  double  within  two  weeks,  the  dealers  say,  unless  innnediate 
measures  are  taken  to  bring  additional  supplies  into  the  city. 

******* 

If  the  embargo  continues,  the  public  service  commission  was  informed  yes- 
terday, subway  construction  will  have  to  stop  and  18,000  men  will  be  thrown 
out  of  work.  It  is  estimated  that  full-y  600  cars  are  required  each  month  to 
bring  in  the  cement  used  by  contractors  building  the  dual  subway  system. 
There  is  only  a  small  supply  on  hand,  and  unless  new  shipments  come  in  all 
work  with  concrete  will  have  to  be  suspended.  Several  contractors  are  running 
low  on  structural  steel. 


[Louisville  Courier-.Tournal.] 

New  York,  December  21. — The  committee  representing  all  trunk  line  rail- 
roads leading  into  New  York  announced  to-day  that  the  freight  embargoes  de- 
clared by  the  many  roads  have  failed  to  ameliorate  the  traffic  congestion,  there 
being  approximately  50,000  cars  destined  for  New  York  on  lines  or  at  terminals. 

Acting  on  this,  the  Pennsylvania,  New  York  Central,  and  Lehigh  Valley  to-day 
declared  additional  stringent  embargoes  on  freight  consigned  to  New  York  for 
export  or  coastwise  shipment.  > 

The  Pennsylvania  extended  its  recent  embargo  on  virtually  all  freight  for 
export,  coastwise  or  domestic  deliveries,  except  dressed  meats,  other  perishable 
freight  and  food  products  to  include  shipments  originating  on  the  Pennsylvania, 
Philadelphia,  Baltimore  &  Washington,  and  West  New  Jersey  and  seashore 
railroads. 

The  New  York  Central  declared  an  embargo  on  all  carload  freight  except 
livestock,  grain,  fresh  meat,  provisions,  and  munitions. 

The  Lehigh  Valley  declared  an  embargo  on  all  eastbound  freight  from  con- 
necting lines  excepting  flour  and  grain  products,  livestock,  dressed  meats, 
perishable  freiglit,  coal,  coke,  fuel  oil,  and  provisions. 

[New  York  Commercial.] 

Pittsburgh,  December  26. — Freight  congestion  on  eastern  railroads  and  lack 
of  coke  at  the  mills  handicapped  the  steel  trade  during  the  past  week,  and  In 
several  instances  furnaces  had  to  be  banked  until  more  fuel  becomes  avail- 
able.    *     *     * 

[New  York  World.] 

The  New  Haven  Railroad  gave  notice  last  night  that,  owing  to  the  storm  and 
freight  congestion,  it  will  not  ship  to  New  York  City  for  the  time  being  any 
goods  except  live  stock,  perishable  food  for  human  consumption,  and  coal. 

Te  embargo  covers  all  points  on  the  system  west  of  New  London  and  Willi- 
mantlc  and  south  of  the  Boston  &  Albany  Railroad. 

[Herbert  T.  Wade  in  the  Scientific  American,  Dec.  25,  1915.] 

During  the  months  of  November  and  December  there  has  been  experienced  on 
the  eastern  seaboard,  and  especially  at  the  port  of  New  York  and  on  the  rail- 
ways entering  the  various  terminals  about  the  harbor,  a  serious  condition  of 
freight  congestion,  to  an  extent  never  before  realized.  At  the  middle  of  Decem- 
ber it  was  reported  that  some  4.5,000  cars — over  twice  the  amount  of  the  car- 
shortage  for  the  entire  United  States — were  tied  up  in  the  vicinity  of  New  York 
City,  and  that  there  was  ready  for  export  at  New  York  Harbor  five  times  as 
much  freight  as  the  available  vessels  could  take.     Grain  elevators  were  filled  to 


372      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

capacity,  piers  and  docks  were  piled  iiigli  with  mercliandise,  and  thousands  of 
cars  were  used  as  warehouses  at  a  time  when  there  was  a  general  shortage  of 
cars  throughout  the  United  States. 

[Chicago  Tribune,  Dec.  17.] 

Practically  every  railroad  connecting  Chicago  with  the  Atlantic  seaboard  yes- 
terday placed  an  embargo  on  all  shipments  for  export  purposes.  Only  perish- 
able goods,  such  as  fresh  meat  and  other  foodstuffs,  are  exempt. 

Lack  of  ocean-going  vessels  and  an  unparalleled  congested  condition  of  the 
freight  yards  and  docks  at  the  principal  seaports  in  the  East  are  given  as  the 
reason. 

Loaded  freight  cars  by  the  thousands  are  standing  on  every  available  siding 
for  miles  outside  of  New  York.  Warehouses  and  elevators  at  the  eastern  ports 
are  choked  up  with  grain  and  freight  houses  are  packed  to  the  roofs  with  ship- 
ments of  all  kinds. 

The  embargo  is  placed  principally  against  grain,  4,000  cars  of  which  are  said 
to  be  awaiting  sliipment  at  eastern  ports. 

Lines  affected. — The  railroads  wliich  have  issued  embargoes  out  of  Chicago 
are:  New  York  Central,  Lehigh  Valley,  Wabash,  Norfolk  &  Western,  Pennsyl- 
vania, Baltimore  &  Ohio,  Erie,  and  Lackawanna. 

Ocean  equipment  short. — "The  fault  does  not  lies  with  the  railroads,"  ex- 
plained J.  S.  Browne,  head  of  the  traffic  department  of  the  board  of  trade, 
**but  with  insufficient  ocean  shipping  facilities.  The  warehouses  and  elevators 
at  Philadelphia,  New  York,  Baltimore,  Buffalo,  and  Newport  News  are  over- 
loaded. The  eastern  terminals  are  so  choked  it  will  be  impossible  for  the 
railroads  to  handle  any  more  shipments  from  the  Central  West  until  things 
are  cleared  up.  The  embargo  not  only  applies  to  grain  but  has  been  extended 
to  steel,  flour,  and  other  exports  by  some  of  the  roads  as  well." 

[Newark  News,  Dec.  20.] 

With  the  Pennsylvania  Railroad  placing  an  embargo  to-day  on  all  freight, 
except  coal  and  foodstuffs,  shipped  from  the  West  to  Newark  and  other  points 
In  the  East,  the  local  freight  situation  is  classed  the  worst  in  railroad  history 
by  the  commercial  agents  of  the  railroads  entering  the  city.     *     *     * 

[New  York  World,  Nov.  30.] 

Baltimoke,  November  29. — On  account  of  large  freight  accumulation  at  its 
St.  George,  Staten  Island,  terminal,  the  Baltimore  &  Ohio  Railroad  placed 
an  embargo  on  iron  and  steel  articles  for  export  through  New  York.  It 
was  said  that  the  embargo  was  necessitated  by  congested  lighterage  conditions. 

[New  York  World,  Nov.  30.] 

Philadelphia,  November  29. — The  Pennsylvania  Railroad  announced  to-day 
that  it  had  placed  embargoes  on  export  flour  and  lumber  at  New  York  and  on 
all  export  grain  at  Philadelphia  and  at  Baltimore. 

[W^ashington  Star.] 

New  York,  December  27. — A  serious  congestion  of  foodstuffs  in  the  cold- 
storage  warehouses  of  New  York  and  New  Jersey  is  reported  by  John  E.  Starr, 
formerly  president  of  the  American  Society  of  Refrigerating  Engineers,  in  a 
statement  to  the  Chelsea  Association  of  Merchants.  Taking  his  figures  from 
the  reports  of  health  departments  of  the  two  States.  Mr.  Starr  says  that 
16,116,173  pounds  of  fresh  meat  was  in  cold  storage  in  New  York  City  last 
September,  an  increase  of  331  per  cent  over  the  amount  stored  here  two  years 
ago.  On  the  same  date  New  Jersey  warehouses  held  4,107,078  pounds  of  fresh 
meat,  an  increase  of  179  per  cent. 

In  addition,  Mr.  Starr  reported  that  thousands  of  tons  of  meats  are  held  in 
refrigerating  cars  on  sidetracks  awaiting  unloading.  He  declared  that  29,- 
377,590  dozens  of  eggs  were  in  cold  storage  here,  and  19,445,880  dozens  in  New 
Jersey,  in  September. 

*'  The  extent  of  the  cold-storage  business,"  said  IMr.  Starr,  "  may  be  indi- 
cated by  the  fact  that  there  were  9,000,000  barrels  of  apples  in  storage  in  the 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      373 

United  States  December  1.     They  were  awaiting  favorable  niarliet  conditions 
here  and  abroad  and  the  possibility  of  movement  over  the  congested  railroacls." 

[New  Yoi'k  Commercial,  Dee.  21,  1915.] 

Chicago,  December  20. — Business  is  so  heavy  for  this  season  of  the  year 
that  unless  there  is  a  speedy  change  in  the  conditions  of  eastern  lines,  due  to 
congestion  at  the  Atlantic  seaboard  and  Gulf  ports,  western  railroads  will 
soon  begin  to  slow  up.  Embargo  upon  embargo  have  been  placed  on  various 
classes  of  freight  destined  to  seaboard  that  it  has  kept  officials  of  western  rail- 
roads looking  after  them.  In  some  instances  the  railroads  have  appointed 
special  clerks,  with  the  title  of  "embargo  men,"  to  handle  the  business.  One 
road  had  no  less  than  eight  notices  in  one  day,  and  fully  as  many  in  another. 
Most  of  the  restrictions  are  on  export  business,  and  mainly  flour  and  grain. 

The  bad  feature  of  this  blockade  in  the  East  is  the  inability  of  western  roads 
to  get  their  cars  back.  At  the  same  time  eastern  roads  do  not  care  to  pay  40 
cents  per  diem  for  foreign  cars,  as  they  have  their  yards  and  sidetracks  full 
of  them  now,  and  to  stop  further  congestion  they  refuse  to  take  freight  from 
western  connections.  As  a  result,  western  roads  have  stopped  loading  fi-eight 
for  eastern  export,  as  to  do  so  would  tie  up  their  cars,  and  in  a  short  time 
congest  their  terminals,  making  it  almost  impossible  for  them  to  handle  their 
heavy  domestic  traffic,  which  at  present  is  being  moved  with  freedom. 

[The  National  Jeffersonian,  Dec.  18,  1915.] 

There  exists  at  the  present  time  a  condition  in  New  York's  export  trade  that 
was  never  known  before.  Manufacturers  throughout  the  country  are  pouring 
their  products  into  this  city's  railroad  terminals  at  breakneck  speed,  only  to 
see  them  lie  useless  in  freight  cars  or  sheds,  waiting  weeks  and  even  months 
for  a  chance  to  cross  the  ocean.  The  big  trunk  lines  are  considering  putting 
an  embargo  on  all  export  freight,  and  at  least  one  of  tliem  has  already  taken 
this  step.  New  York  and  other  traffic  centers  are  glutted  with  the  world's 
commerce  that  they  can  not  ilisgorge  into  the  proper  trade  channels. 

Ocean  freight  rates  have  gone  up  with  a  rush.  The  profits  of  shipowners 
are  indicated  in  the  story  of  tlie  schooner  Edward  J.  Lawrence,  which  cleared 
recently  from  Norfolk  with  5,000  tons  of  coal  for  Barcelona.  Her  owners  got 
$52,500  for  the  freight,  or  $10.50  a  ton.  And  this  was  in  an  old  sailing  vessel, 
which,  like  hundreds  of  other  vessels  of  the  same  class  now  in  demand,  could 
not  get  a  cargo  a  few  years  ago  in  competition  with  modern  steam  vessels. 

The  growing  scarcity  of  ships  is  the  underlying  reason,  it  seems,  both  for 
the  congestion  of  freight  in  this  city,  and  the  high  rates  charged.  The  war 
risk  is  another  factor  that  has  increased  the  cost  of  ocean  tran.sportation. 

Congestion  of  freight  on  eastern  railroads  grows  more  serious  daily.  On 
some  of  the  great  systems  it  amounts  virtually  to  an  absolute  embargo,  except 
upon  the  most  perishable  shipments.  The  railroads,  seemingly,  are  doing  the 
best  they  can  with  the  intricate,  perplexing  situation.  The  trouble  lies  with 
the  present  inadequacy  of  ocean  shipping  facilities.     (Pasadena  Star.) 

[New  York  Tribune.  Dec.  19,  1915.] 

Philadelphia,  December  IS. — The  Pennsylvania  Railroad  to-day  issued  an 
embargo  on  all  freight  destined  for  the  New  l^)rk  district,  with  tlie  exception  of 
foodstuffs  and  coal  for  "  necessary  purposes." 

[Philadelphia  Ledger,  Dec.  22,  1915.] 

The  Pennsylvania  Railroad,  realizing  that  New  England,  shut  off,  from  direct 
contact  with  the  food  markets  of  the  country,  was  fast  approaching  a  condition 
of  actual  want,  yesterday  raised  its  freight  embargo  to  the  extent  of  accepting 
live  stock,  foodstuffs,  and  perishable  freight  destined  for  that  section. 

That  the  railroad  officials  considered  immediate  measin*es  neces.^sary  was  borne 
out  in  an  official  statement  issued  last  night  opening  with  the  significant  words, 
"  Regardless  of  the  congestion  of  freight  which  exists  in  the  New  I'ork  district," 
The  railroad's  reports  of  the  number  of  cars  blocked  on  its  lines  awaiting  ship- 
ment at  New  York  show  the  congestion  has  increased  despite  an  embargo  levied 
last  Saturday  ,whichc  was  virtually  complete. 


374      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Exhibit  No.  8. 

Exhibits  Nos.  75  A,  B,  and  C  and  76  to  Document  673,  part  2,  Sixty-third 
CJongress,  third  session : 

(Exhibit  75,  Doc.  673,  pt.  2,  63d  Cong.,  3d  sess.) 

(Extract  from  telegram  to  Secretary  of  the  Treasury  from  B.  N.  Baker,  Baltimore,  Md., 

Dec.  24,  1914.] 

Have  a  cable  from  London  this  morning  offering  4  new  steamers,  immediate 
delivery,  one  12,000,  two  11,000,  and  one  8,000  tons,  dead-weight  capacity,  basis 
of  $40  a  ton  and  4  guaranteed  delivery  within  six  months  at  same  basis.  All 
English  or  French  built  or  building  now,  so  there  would  be  no  difficulty  in  secur- 
ing any  amoimt  of  tonnage. 

(Exhibit  75A,  Doc.  673,  pt.  2,  63d  Cong.,  3d  sess.) 

[Copy  of  cable  received  from  B.  N.  Baker,  Baltimore,  Md.,  Dec.  22,  1914.] 
CLT. 
Tarheel,  London: 

Can  j'ou  offer  sale  several  new  steamers  near  delivery  10  to  12  thousand  tons 
D.  W.  about  10  knots  immediate  cash  Panama  no  chance. 

Bernadine. 
(Exhibit  75B,  Doc.  673,  pt.  2,  63d  Cong.,  3d  sess.) 

[Copy  of  cable  sent  Dec.  23,  1914.] 
CLT. 
Bebnadine,  Baltimore: 

Can  offer  if  unsold  steamer  completing  stnazaire  12,000  tons  eleven  knots 
Lloyds  class  100  Al  sister  ship  ready  6/8  months  90,000  each  Andreas  built  Dox- 
ford  10,300  tons  ten  knots  Returning  maiden  voyage  New  York  Could  deliver 
February  85,000  AVould  five  8,000  ton  ten  knots  single  deck  building  interest 
Might  get  them  75,000  each  First  about  ready  All  delivered  six  months 
Feild. 

Bernard  N.  Baker 

Baltimore,  Md.,  U.  S.  A. 

(Exhibit  75C,  Doc.  673,  pt.  2,  63d  Cong.,  3d  sess.) 

London,  December  23,  lOlJf. 
B.  N.  Baker,  Esq., 

Baltimore,  Md. 

Dear  Bernard  :  I  confirm  cable  sent  to-night,  offering  you  the  three  boats, 
particulars  of  which  I  mailed  you  yesterday. 

As  stated  in  my  letter  yesterday,  all  available  tonnage  is  in  great  demand 
here  at  present,  and  up  to  this  evening  I  have  been  unable  to  get  anything  else 
to  offer.     At  the  same  time  I  shall  continue  my  search. 

I  included  in  my  cable  an  inquiry  as  to  whether  five  8,000-ton,  10-knot  boats 
would  interest  you. 

I  know  of  five  boats  of  these  dimensions,  which  are  being  built  for  one 
company. 

The  first  one  is  just  completing,  and  they  say  all  five  of  them  will  be  com- 
pleted within  six  months. 

The  builders  inform  me  that  they  think  they  could  get  the  owners  to  sell 
them  for  £75,000  each,  and  it  occurred  to  me  that  possibly  five  sister  boats, 
though  they  were  2,000  tons  below  the  capacity  you  want,  might  be  attractive 
to  you,  and  I  await  your  reply  before  further  considering  them. 

Unfortunately,  I  learn  that  the  steamer  Andreas  has  already  left  New  York, 
returning  from  her  maiden  voyage.  She  belongs  to  a  Greek,  who  is  simply 
willing  to  sell  her  for  cash  at  something  more  than  he  paid  for  her.  She,  of 
course,  is  a  new  steamer,  completed  in  November. 

I  was  very  much  in  hopes  you  could  see  her  while  she  was  in  New  York,  but 
the  owner  has  just  informed  me  that  she  has  left  New  York.  She  could  be 
delivered  on  this  side,  however,  in  February,  or  possibly  sooner,  if  she  has  fin- 
ished discharging. 

If  you  must  have  10,000  tonners,  she  strikes  me  as  being  a  suitable  boat. 
She  was  built  by  Doxford  &  Sons,  of  Sunderland. 

The  two  steamers  which  T  offer  you  built  at  St.  Nazaire  ought  to  be  attractive 
to  you.     They  are  not  dear  at  £90,000. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      375 

The  first  one  is  about  ready  for  delivery,  and  has  been  named  Ohio. 

Her  sister  ship,  they  say,  will  be  ready  in  about  six  or  eight  months. 

There  were  three  contracted  for  before  the  war.  The  contractor  has  failed, 
and  the  builder  is  offering  them  at  a  slight  profit  over  the  contract  price. 

The  builders,  Chantiers  &  Atteliers,  are  reputable  people. 

I  hope  in  your  letter  you  will  give  me  some  definite  information  as  to  what 
the  ships  are  wanted  for. 

If  they  wanted  to  run  from  New  York  to  Frisco,  I  think  the  Government  here 
could  easily  be  induced  to  allow  them  to  go  under  the  American  flag.  While 
if  they  are  intended  for  regular  tramp  business,  and  possibly  to  carry  cargo  to 
belligerent  countries,  they  might  possibly  place  some  difficulties  in  the  way  of 
the  builders  exporting  them  to  a  neutral  country.  At  the  same  time  I  believe 
this  difficulty  might  be  overcome. 

The  possibility  of  this  difficulty,  of  course,  would  not  arise  with  either  the 
French  or  the  Greek  boats. 

I  believe  I  can  offer  you  any  available  boats  to  be  had,  and  sincerely  hope 
we  may  be  able  to  do  some  business. 

Of  course,  when  it  comes  to  final  business,  all  of  these  prices  might  be  subject 
to  counter  offers. 

Owing  to  the  condition  of  the  market,  however,  ownei-s  will  not  mixke  firm 
offers  imtil  they  are  satisfied  it  means  business. 
Yours,  sincerely, 

Thomas  L.  Feild. 

(Exhibit  76,  Doc.  673,  pt.  2,  63d  Cong.,  3d  sess.) 

STEAMERS    FOR    SALE    BY    MERCHANT    MARINE    AGENCY,     1123    OLD    SOUTH    BUILDING, 
BOSTON,    MASS.,    J.    V.    M'CARTHY,    MANAGER. 

[We  can  not  make  the  prices  or  ofifers  of  the  steamers  as  firm  offers ;  they  are  subject  only 
to  being  still  available  on  receipt  of  your  reply.  We  will  not  be  responsible  for  errors 
in  description.] 

No.  1. — 8,880  tons  dead-weight,  including  bunkersj,  on  26^  feet  draft.     Built 

1912  of  steel,  100  Al  Lloyd's ;  dimensions,  412  by  52  by  30i  feet ;  molded,  cubic 
capacity,  535,000  cubic  feet ;  11^  knots  on  a  moderate  consumption ;  triple  en- 
gines, cylinders  28  inches,  46i  inches,  78  inches,  by  54-inch  stroke;  3  boilers,  200 
pounds  working  pressure ;  water  ballast  in  cellular  bottom,  peaks,  and  deep 
tank ;  6  hatches ;  11  winches ;  steam  steering  gear ;  'tween  decks,  9  feet  high ; 
bronze  propeller ;  electric  light ;  two  decks  laid,  with  complete  shelter  deck 
above  same.  Accommodations  for  a  few  first-class  passengers.  Bilge  keels  170 
feet  amidships ;  Crompton's  ash  hoist ;  ventilators  to  each  hold.  Gross  register, 
4,863;  net  register,  3,109.     Price,  $420,000. 

No.  2. — 7,800  tons  dead-weight,  including  bunkers,  on  23^  feet  draft.     Built 

1913  of  steel,  100  Al  Lloyd's;  dimensions,  390  by  50.6  by  30.4  feet;  molded, 
large  cubic  capacity ;  lOi  knots  on  31  tons'  consumption ;  triple  engines,  cylin- 
ders 26  inches,  43  inches,  71  inches,  by  48-incli  stroke;  3  boilers,  180  pounds' 
working  pressure ;  water  ballast  in  cellular  bottom  and  peaks ;  6  hatches ;  10 
winches ;  steam  steering  gear ;  'tween  decks,  8J  feet  high ;  powerful  derricks ; 
very  complete  specifications ;  4  ventilators  to  each  hold ;  telescopic  topmasts, 
and  special  ventilators  for  perishable  cargoes ;  two  decks  laid,  with  poop,  bridge, 
and  forecastle.  Accommodations  for  a  few  first-class  passengers.  Gross  regis- 
ter, 4,814 ;  net  register,  3,021.    Price,  $390,000. 

No.  3. — 7,300  tons  dead-weight,  including  bunkers,  on  23  feet  draft.  Built 
1913  of  steel,  British  corporation ;  dimensions  376  by  52  by  28  feet ;  molded, 
large  cubic  capacity ;  lOJ  knots  on  26  tons'  consumption ;  triple  engines,  cylin- 
ders 25  inches,  41  inches,  68  inches,  by  48-inch  stroke;  3  boilers,  180  pounds' 
working  pressure ;  water  ballast  in  cellular  bottom,  peaks,  and  deep  tank ;  6 
hatches ;  10  winches ;  steam  steering  gear ;  shafting  in  excess  of  Lloyd's ;  excep- 
tionally full  specifications,  'tween  decks,  8  feet  high ;  powerful  derricks ;  bronze 
propeller,  electric  lights,  clear  holds,  deep  bulb  angle  frames ;  two  decks  laid, 
with  poop,  bridge,  and  topgallant  forecastle.  Gross  register,  4,411 ;  net  reg- 
ister, 2,834.     Price,  $350,000. 

Above  boats  are  under  British  registry. 

No.  4  (withdrawn). — 8,200  tons  dead-weight,  including  bunkers,  on  24.6  feet 
draft.  Built,  1914,  of  steel ;  100  Al  Lloyds ;  dimensions,  400  by  52  by  30  feet ; 
molded ;  cubic  capacity,  440,839  cubic  feet ;  lO^-  knots  on  a  moderate  consump- 
tion ;  triple  engines ;  cylinders,  26  inches,  42  inches,  70  inches  by  48-inch  stroke ; 
3  boilers,  180  pounds  working  presure ;  water  ballast ;  1,222  t. ;  5  hatches ;  10 


376      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

winches ;  2  decks ;  steam  heating  ainidship ;  ice  room ;  steam  ash  hoist ;  wincli 
condenser.     Gross  register,  4,985;  net  register,  3,144.     Price,  $342,500. 

No.  5. — 8,700  tons  dead-weight,  including  bunliers,  on  2G.8  feet  draft.     Built, 

1912,  of  steel;  100  Al  Lloyd's;  dimensions,  423.6  by' 52  by  30.G  feet;  molded; 
cubic  capacity,  535,090  cubic  feet;  12^  knots  on  a  moderate  consumption;  triple 
engines;  cylinders,  28  inches,  46i^  inches,  78  inches  by  54-inch  stroke;  3  boilers, 
200  pounds  working  pressure;  water  ballast  in  cellular  bottom,  peaks,  and  deep 
tank  ;  G  hatches  ;  10  winches  :  steam  steering  gear  ;  'tween  decks,  10.1  feet  high  ; 
bronze  propeller ;  electric  light ;  three  decks  laid ;  shelter  deck.  Telescopic 
topmast.     Net  register,  3,095.     Price,  $350,000. 

No.  G  (two  steamers,  duplicates). — 9,000  tons  dead-weight, .including  bunkers, 
on  24.11  feet  draft.  Built,  1912,  of  steel;  100  Al  Lloyd's  dimensions,  420.2  by 
54  by  28.5  feet;  molded;  531,630  cubic  feet  capacity;  grain;  lOi  knots  on  a 
moderate  consumption;  triple  engines;  cylinders,  2G  inches,  43  inches,  70  inches 
by  48-inch  stroke;  2  double-end  boilers,  ISO  pounds  working  pressure;  water 
ballast  2,397  t.  in  cellular  bottom,  peaks,  and  deep  tank;  5  hatches;  10  steam 
winches ;  'tween  decks,  8  feet  beam ;  bronze  propeller ;  wireless ;  1  derrick  for 
3  t. ;  10  derricks ;  7-inch  gun-metal  liner  on  shaft ;  nautical  draft-plate  keel ; 
3  decks  laid ;  shelter  deck  8  feet  high ;  steam  steering  gear.  Two  staterooms 
for  4  or  6  passengers.     Net  register,  3,173.     Price,  $375,000. 

No.  7. — 11,780  tons  dead-weight,  including  bunkers,  on  28.3  feet  draft.  Built, 
1918,  of  steel ;  100  Al  Lloyd's ;  dimensions,  470.4  by  58  by  34.10  feet ;  molded ; 
cubic  capacity,  645,000  cubic-feet  bales;  12  knots  on  a  moderate  con.sumption ; 
triple  engines,  amidship ;  cylinders,  26^  inches,  45  inches,  75  inches  by  48-inch 
stroke;  2  boilers,  D.  E.  tubular,  200  pounds  working  pre.ssure;  water  ballast  in 
cellular  bottom  2,939  t.,  also  in  peaks  and  tanlcs ;  6  hatches ;  12  steam  winches ; 
steam  steering  gear;  two  decks  laid;  coeflicient  '75  nautical  draft;  side  lights 
on  poop,  bridge,  forecastle,  and  'tweens ;  14  derricks,  those  on  main  deck  for  10 
t.,  on  bridge  for  7  t. ;  electric  light ;  wireless.  Net  register,  4,625  t.  Price, 
$625,000. 

Above  steamers  are  under  British  registry. 

No.  8. — 10,570  tons  dead-weight,  including  bunkers,  on  26.9  feet  draft.  Built, 
1903,  of  steel ;  100  Al  Lloyd's  special  survey  No.  2,  1911 ;  dimensions,  455.8  by 
55.2  by  33.10  feet;  molded,  cubic  capacity,'605,045  feet;  10*  knots  on  38/40  tons 
con.'^umption  ;  triple  engines  amidship;  cylinders,  27  inches,  46  inche.s,  76  inches 
by  51-inch  stroke ;  three  boilers,  S.  E.  tubular,  200  pounds  working  pressure, 
water  ballast,  3,896  t.  in  cellular  bottom;  peaks  and  deep  tank;  6  hatches;  11 
steam  winches ;  and  16  derricks ;  steam  steering  gear ;  electric  light  and  wire- 
less; two  decks  laid.     Net  register,  4,286.     Price,  $4.50,000. 

No.  9. — 8,200  tons  dead-weight,  including  bunkers ;  25.4i  feet  draft.     Built, 

1913,  of  steel ;  dimensions,  380  by  53  by  28.6  feet ;  molded,  cubic  capacity  490.927 
grain,  453,791  cubic  feet  bale ;  lOi  knots  on  30  tons  consumption ;  triple  engines 
amidship ;  cylinders,  26  inches,  42  inches,  70  inches  by  48-inch  strike ;  two  S.  E. 
and  one  auxiliary  S.  E.  boilers,  180  pounds  working  pressure ;  water  ballast ; 
1,297  t.  in  C.  D.  B.  and  peaks;  6  hatches;  10  steam  winches;  and  steam  steering 
gear;  two  decks  laid,  one  of  which  is  steel;  shelter  deck,  part  steel  and  part 
iron;  plate  keel;  electric  light;  two  main  boilers;  forced  draft;  side  lights  in 
poop;  built  propeller,  with  mangane.«!e-bronze  blades;  spare  blades;  25  t.  evapo- 
rator.    Net  register,  2,778.     Price,  $380,000. 

No.  10. — 8,000  tons  dead-weight,  including  bunkers,  on  24.6  feet  draft.  Now 
building;  will  be  ready  for  delivery  in  February  or  March,  1915;  of  steel;  di- 
mensions, 401  by  52.1  by  30  feet ;  moldetl ;  triple  engines ;  cylinders,  27  inches.  44 
inches,  75  inches  by  48-inch  stroke ;  surface  condenser ;  10  to  11  knots.  Price. 
$370,000. 

No.  11  (withdrawn). — 8,575  tons  dead-weight,  including  bunkers,  on  24,10  feet 
draft.  Built,  1914,  of  steel ;  100  Al  Lloyd's ;  dimensions,  385.0  by  53.6  by  36  feet 
to  shelter ;  cubic  capacity,  503,520  cubic  feet ;  9*  knots,  loaded,  on  25  tons  con- 
sumption ;  triple  engines  amidship ;  cylinders,  25  inches,  42  inches,  68  inches  by 
48-inch  stroke;  three  boilers,  S.  E.  tubular,  180  pounds  working  pressure;  5 
hatches;  10  steam  winches;  steam  steering  gear;  steam  windlass;  two  decks 
lai'T   one  of  steel,  one  of  iron  ;  shelter  deck.    Net  register,  2.895.     Price,  $320,0(X). 

No.  12. — 10.320  tons  dead-weight,  including  bunkers  ,on  26  feet  draft.     Built, 

1914,  of  steel;  class,  British  corporation;  dimensions,  425  by  .55.5  by  30  feet; 
molded ;  two  decks  laid ;  shelter  deck ;  cubic  capacity,  597,710  ciibic  feet ; 
10*  knots  laden,  about  40  tons  consumption;  triple  engines  amidships:  cylin- 
ders, 28  inches,  45  inches,  75  inches  by  51-inch  stroke;  three  tubular  boilers, 
180  pounds  working  pre.ssure;  10  steam  winches;  10  derricks;  also  2  small  ones 
on    poop ;    coefficient,    '79.     Most   up-to-date   steamer,    with   desking,    telegraph, 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.       377 

shifting  boards,  cargo  battens,  telescopic  topmast,  witli  crosstrees  at  top  and 
tables  at  bottom.  All  holes  inside  coated  with  bitumastic  enameled  composite, 
etc.     Net  register,  3,500.     Price,  $400,000. 

Above  steamers  are  under  British  registry. 

No.  13. — 8,800  tons  dead-weight,  including  bunkers,  on  24.6  feet  draft.     Built 

1913  of  steel,  class  B.  S.,  British  corporation ;  dimensions,  402  by  54  by  27.6 
feet;  molded,  cubic  capacity,  540,442  cubic  feet;  10  knots  on  28  tons  consump- 
tion ;  triple  engines ;  cylinders,  26  inches,  42  inches,  70  inches  by  48-inch  stroke ; 
surface  condenser,  3  boilers,  S.  E.  tubular,  180  pounds  working  pressure,  water 
ballast,  C.  D.  B.,  F.  and  A.,  P.  T. ;  7  steam  winches,  1  deck,  and  shelter  laid. 
Net  register,  2,930.     Price,  $325,000. 

No.  14. — 8,036  tons  dead-weight,  including  bunkers,  on  24.5  feet  draft.     Built 

1914  of  steel,  100  Al  Lloyds' ;  dimensions,  385  by  52  by  29.6  feet ;  molded,  cubic 
capacity  432,979  cubic  feet;  10  knots  on  28  tons  consumption;  triple  engines, 
amidship ;  cylinders,  25  inches,  40  inches,  68  inches  by  48-inch  stroke;  surface 
condenser,  3  boilers,  S.  E.  tubular,  180  pounds  working  pressure ;  water  ballast, 
1,183  t.  in  C.  D.  B.,  F.  and  A.,  P.  T. ;  5  hatches,  10  steam  winches,  steam  wind- 
lass, steam-steering  gear ;  1  deck  laid,  steel,  'tween  deck,  7.6  feet ;  12  derricks, 
4  derrick  posts ;  wood-grain  divisions,  coefficient,  '783 ;  steam  heating,  bilge 
keels ;  four  18-inch  vents  each  hold ;  ice  room ;  steam-ash  hoist ;  Morrison  25  t 
evaporator ;  F.  water  condenser,  1,500  gallons,  etc.  Net  register,  2,955.  Price, 
$315,000. 

No.  15. — 8,150  tons  dead-weight,  including  bunkers,  on  24.3  feet  draft.  Built 
1913  of  steel,  highest  British  corporation ;  dimensions,  385  by  52.1  by  29.6  feet ; 
molded,  cubic  capacity,  430,208  cubic  feet  grain,  or  409,047  cubic  feet  bales; 
9.5  to  10  knots  on  27  tons  ordinary  consumption ;  triple  engines,  amidship ;  cyl- 
inders, 25  inches,  40  inches,  68  inches  by  48-inch  stroke;  surface  condenser, 
3  S.  E.  tubular  boilers,  180  pounds  working  presure;  water  ballast,  1,430  t., 
C.  D.  B.  and  peaks ;  6  hatches ;  10  steam  winches ;  steam  windlass ;  steam- 
steering  gear ;  1  deck  laid,  steel ;  1  spare  room  for  passenger  accommodation ; 

12  derricks  and  tables;  4  derrick  posts;  grain  divisions;  spare  propeller; 
shafts ;  evaporator  and  heater ;  also  winch  condenser.  Net  register,  2,954. 
Price,  $340,000. 

Above  steamers  are  under  British  registry. 

No.  16. — Steamship  built  of  steel,  to  carry  passengers  and  cargo ;  twin  screw ; 
built,  1894;  engines,  triple;  indicated  horsepower,  2,500;  length,  383.4  feet; 
breadth,  46  feet ;  depth,  27.2  feet ;  i-egistered  gross  tonnage,  4,761 ;  electric 
light ;  sub.  sig. ;  12  knots ;  arranged  to  carry  16  first  and  second  class  passen- 
gers, 1,000  steerage.     Price,  $375,000. 

No.  17. — Passenger  and  cargo  steamer  arranged  to  carry  137  first  and  second 
class,  1,260  steerage;  built  of  steel,  1894;  twin  screw;  engines,  triple;  in- 
dicated horsepower,  2,500 ;  length,  383.4  feet ;  breadth,  46  feet ;  depth,  27.2  feet ; 
registered  gross  tonnage,  5,640 ;  electric  light ;  sub.  sig. ;  12  knots.  Price 
$625,000. 

No.  18.- — Passenger  and  cargo  steamer  arranged  to  carry  120  first  and  second 
class,  1,344  steerage;  built  of  steel,  1899;  twin  screw;  engines,  triple;  speed, 

13  knots;  indicated  horsepower,  3,200;  length,  428.9  feet;  breadth,  54.3  feet; 
depth,  39.4  feet,  registered  gross  tonnage,  7,414 ;  electric  light ;  sub.  sig.  Price, 
$625,000. 

No.  19. — ^Passenger  and  cargo  steamer  arranged  to  carry  35  first  and  second 
<*lass,  206  third  class,  2,144  steerage;  built  of  steel,  1899;  twin  screw;  engines, 
quadruple ;  12^  knots ;  indicated  horsepower,  5,500 ;  length,  501  feet ;  breadth, 
58.1  feet ;  depth,  36.7  feet ;  registered  gross  tonnage,  10,058 ;  electric  light ; 
wireless  telegraphy  ;  sub.  sig.     Price,  $1,125,000. 

No.  20. — Passenger  and  cargo  steamer  arranged  to  carry  210  first  class,  224 
second  class,  1,343  steerage;  built  of  steel,  1896;  twin  screw;  engines, 
quadruple ;  speed,  16  knots ;  indicated  horsepower,  7,000 ;  length,  523  feet ; 
breadth,  60.1  feet ;  depth,  34.8  feet ;  registered  gross  tonnage,  10,695 ;  electric 
light;   Stone  Lloyd  bulkhead  doors;  sub.  sig.     Price,  $1,250,000. 

No.  21. — Passenger  and  cargo  steamer  arranged  to  carry  110  first  class,  175 
second  class,  252  third  class,  1,660  steerage;  built  of  steel,  1896;  twin  screw; 
engines,  quadruple;  speed  16  knots;  indicated  horsepower,  7,000;  length,  526.4 
feet ;  breadth,  GO  feet ;  depth,  34.6  feet ;  registered  gross  tonnage,  10,915 ; 
electric  light ;  Stone  Lloyd  bulkhead  doors ;  sub.  sig. ;  wireless  telegraphy. 
Price,  $1,250,000. 

No.  22. — Passenger  and  cargo  steamer  arranged  to  carry  133  first  and  second 
class,  1,450  steerage ;  built  of  steel,  1901 ;  twin  screw ;  engines,  quadruple ; 
speed,  13  knots;  indicated  horsepower,  3,400;  length,  429.3  feet;  breadth,  54.3 


378      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

feet ;  depth,  39.6  feet ;  registered  gross  tonnage,  7,524 ;  electric  light ;  sub.  sig. 
Price,  $812,500. 

Above  steamers  are  under  German  registry. 


Exhibit  No.  9. 

Statement  showing  vessels  purchased  by  the  Navy  during  the  Spanish- American 
War,  the  price  paid  for  each,  and  the  disposition  made  of  those  not  now  the 
property  of  the  Navy. 


Name. 


Purchase 
price. 


Sold  or  transferred  to- 


Selling  price. 


Abarenda . . . 

Accomac 

Active 

Aileen 

Aiax 

Albany 

Alexander... 

Alice 

Apache 

Arethusa 

Badger 

Brutus 

Buffalo 

Caesar 

Cassius 

Celtic 

Cheyenne 

Chickasaw. . . 

Choctaw 

Culgoa 

Dixie 

Dorothea 

Eagle 

East  Boston. 

Elfrida 

Enquirer 

Frolic 

Glacier 

Gloucester... 
Gov.  Russell. 

Hannibal 

Hawk 

Hector 

Hercules 

Hist 

Hornet 

Huntress 

Inca 

Iris 

Iroquois 

Justin 

Kanawha 

Lebanon 

Leonidas 

Manly 

Marcellus 

Massasoit 

Mayflower. . . 

Merrimac 

Modoc 

Mohawk 

Nanshan 

Nero 

New  Orleans 

Nezinscot 

Niagara 

Oneida 

Osceola 

Panther 

Pawnee 

Peoria 

Pjscataqua.. 

Pompey 

Pontiac 

Potomac 

Powhatan . . . 

Prairie 

Rainbow 

Resolute 


S175, 

40. 

75. 

55, 

267, 

1,207, 

206. 

19, 

54, 

218. 

367, 

215, 

550. 

175, 

160, 

340, 

19, 

15. 

82, 

247, 

575, 

187, 

110, 

57, 


000.00  i 
000.  00 
000. 00  I 
000.00  I 
657.50  I 
644.13  I 
825.25 
000. 00  1 
510.00  1 
992.50  I 
000.  00  1 
000. 00 
000. 00 
194. 00 
594.  50 
900. 00 
639.  05 
000.  00 
500. 00 
704.  85 
000.00 
500.  00 
000.  00 
500.  00 


50,000.00 
80,000.00 
115,000.00 

340, 550. 00 
225. 000. 00 

71,000.00 
147,941.60 

.50,000.00 
200. 000.  00 

40  000.  00 

65, 000.  00 
117,500.00 
275, 000. 00 

35,000.00 
145, 000.  00 
150,  aX).  00 
145,000.00 

50, 000. 00 
225,000.00 
147,941.60 

24, 2.50. 00 

90,000.00 

30,000.00 
430, 000. 00 
342, 000. 00 

30, 000. 00 

44, 000. 00 

1.5.5, 728. 00 

215,000.00 

1,4.30, 091.  .59 

30, 000. 00 
200,000.00 

60, 000. 00 
100, 000. 00 
375, 000. 00 

25, 000. 00 
100, 000. 00 
130,000.00 
111,929.50 

30,000.00 
125,300.00 

42, 500. 00 
575, 000. 00 
176, 250. 00 
47.5,000.00 


Madrigal  &  Co.,  Cavite,  P.  1. 


$17,400.00 


Transferred  to  War  Department . 


115,350.00 


Transferred  to  War  Department . 


160,594.50 


G.  D.  Kuper  &  Bros.,  New  York. 
Reichert  Towing  Line 


1,690.00 
2,550.00 


Andrew  J.  Phillips,  H.  L.  Maj-nard,  T.  J.  Wool, 
J.  L.  Watson,  Portsmouth,  Va. 


Transferred  to  War  Department 

Transferred  to  War  Department  without  reim- 
bursement. 


38, 091. 00 

'26,066.' 00 


City  of  Boston,  Mass. 


25, 000. 00 


Metropolitan  Coal  Co. 


65, 150. 00 


H.M.  Olsen 

Nathan  S.  Stern,  New  Orleans. 


2, 421. 00 
5, 100. 00 


E.  F.  Lucenbach,  BrookljTi,  N.  Y. 


1,800.00 


Transferred  to  War  Department. 


50,000.00 


H.  P.  Booth,  New  York. 


75,563.00 


Transferred  to  War  Department. 


311,400.00 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      379 


Statement  showing  vessels  purchased  by  the  Navy  during  the  Spanish-American 
War,  the  price  paid  for  each,  etc. — Continued, 


Name. 

Purchase 
price. 

Sold  or  transferred  to — 

Selling  price. 

$29,000.00 

200,000.00 

85,769.71 

300,000.00 

2S,000.00 

25,000.00 

24,000.00 

25,553.51 

40,000.00 

600,000.00 

72,997.50 

100,000.00 

190,000.00 

75,000.00 

325,000.00 

50,000.00 

25,000.00 

45,000.00 

170,  .327. 50 

75,  (XK).  00 

60,000.00 

30, 000. 00 

150,000.00 

350,000.00 

20,000.00 

24,000.00 

66,000.00 

95,000.00 

65,000.00 

575,000.00 

12.5,000.00 

575, 000. 00 

87, 597. 00 

$1,008.00 

Ludwig  Rubelli,  Philadelphia,  Pa 

41, 550. 00 

Sehago  . . 

Seminole 

Transferred  to  War  Department 

6, 500. 00 

Shearwater. 

Samuel  B.  Wilson,  Philadelphia,  Pa 

1, 536. 00 

Sioux... 

Siren ....              

New  Orleans  Foundry  &  Iron  Co 

2,352.50 

Soiithery 

Sterling 

Stranger 

SuddIv. 

sylJh ...   :......; 

Sylvia 

Tec-iimseh 

Topeka 

Transferred  to  War  Department 

30,000.00 

Vixen 

Viiloan 

Mii'hael  Jenkins,  Baltimore,  Md 

175, 750. 00 

Walian 

Water  Harge  1 

Water  Barge  75 

Wasp 

Wompatuck 

Yankee 



Wm.  W.  Wotherspoon 

2,010.00 

lioston  Iron  &  Metal  Works 

11,522.04 

Zftfiro 

Chirago  Junk  Co. ,  Seattle 

3,300.00 

Total 

18,243,389.29 

1,167,638.04 

Exhibit  No.  9A. 

List  of  vessels  purchased  by  United  States  Navy  during  the  Spanish-American 
War,  shelving  names  before  purchase,  dates  of  purchase,  and  names  of  pre- 
vious owners. 


Name  before  purchase. 


1  Columbia 

2  .\licia 

3  Almy 

4  Hermione 

5  D.C.Ivans 

P.H.  Wise 

Winthrop 

ElToro 

Wilmot 

Edward  Luckenback... 
Walter  A.  Luckenback, 

Atlas 

Josephine 

Mayflower 

Sovereign , 

16  I  Crsole , 

17  Diogenes , 

18  (Not  named) 

19   do 


Renamed. 


20  Saturn 

21  i  Lebanon 

22  I  El  Norte 

23  I  El  Rio 

24  I  El  Sol 

25  '  ElSud 

26  !  Nichteroy-El  Cid. 


Wasp 

Hornet 

Eagle 

Hawk 

Ne/.inscot 

Sioux 

Osceola 

Accomac 

Potomac 

Tecumseh 

Uncas 

Wampatuck.. 

Vixen 

Mayflower 

Scorpion 

Solace .".  .do. 

Topeka .\pr.     2,1898  ' 

Manly Apr.  13,1898 

Somers Mar.  26,1898  I 

Satiu-n Apr.     2,1898  I 

Lebanon Apr.     6,1898  I 

Yan  kee do ; 

Dixie ■  Apr.  15,1898  [ 

Prairie Apr.    6,1898  : 

Yosemite do | 

Buffalo July   11,1898 


Date  of 
purchase. 


Previous  owners. 


Mar.  26,1898 
Apr.  6,1898 
Apr.     2, 1898 

do 

-Mar.  2.5,1898 
Mar.  26,1898 
Mar.  31,1898 
Mar.  26,1898 
Apr.  14,1898 
Apr.     2, 1898 

do 

Apr.  4,1898 
.\pr.  9, 1898 
Mar.  19,1898 
Apr.  7, 1898 


J.  H.  Ladew. 
Henry  M.  Flagler. 
Frederick  Gallitin. 
H.  L.  Pierce  estate. 
Moran  &  Co. 

Do. 
Staples  Coal  Co. 
Southern  Pacific  Line. 
Ocean  Towing  &  Wrecking  Co. 
Luckenback  &  Co. 

Do. 
Standard  Oil  Co. 
T.  A.  B.  Widener. 
Ogden  Goelet  estate. 
M.C.  D.  Borden. 
Cromwell  Steamship  Line. 
Thames  Iron  Works  (London). 
Chas.  R.  Flint. 
Schichau   Iron   Works,   Elbing,   Gef- 

many. 
Boston  Towboat  Co. 
Philadelphia  &  Reading  R.  R.  Co. 
Southern  Pacific  Co. 

Do. 

Do. 

Do. 
Brazilian  Government. 


380      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


List  of  vessels  purchased  by  United  States  Navy  during  the  Spanish-American 
War,  showing  names  before  purchase,  etc. — Continued. 


Name  before  purchase. 


Renamed. 


Date  of 
purchase. 


Previous  owners. 


92 
93 
94 
95 
96 
97 
99 
00 
101 
102 


Amazonas 

Almirante  Abru... 

Merrimac 

Niagara 

Sterling 

Enterprise 

No.  18 

Nanshan 

Zafiro 

Alice 

C.  G.Coyle 

Pen  wood 

Fearless 

Vigilant 

Active 

Hercula? 

Southery 

Venezuela 

Yumuri 

Yorktown 

T.  P.  Fowler 

Thespia 

Restless 

Illawara 

Viking 

Chatham 

Penelope 

Right  Arm 

Philadelphia 

Corsair 

Menemsha 

John  D wight 

Justin 

Hortense , 

Aileen 

Scindia , 

Comanche 

Illinois , 

Kingstor , 

Dorothea 

Gov.  Russell 

East  Boston 

W.  H.  Brown 

J.  D.  Jones , 

Celtic  King 

Rhaetia 

A.  W.  Booth 

Joseph  Holland . . 
Atala 

Eliz.  Holland 

Harlech 

Abarenda 

(Not  known) 

Peter  Jebsen 

No.  55 

Whitgift 

Norse  King 

Enquirer 

Inca 

Huntress 

Stranger 

Kate  Jones 

Bristol 

Eugenia 

Elfrida 

No.  295 

Shearwater 

Sylvia 

Hercules 

Confidence 

Kanawha 

Pedro 

Port  Chalmers. .. 

Titania 

Refrigerating  ship 
Lucilene 


New  Orleans. 

Albany 

Merrimac 

Niagara 

Sterling 

Modoc 

No.  18 


Nanshan 

Zafiro 

Alice 

Choctaw 

Powhatan 

Iroquois 

Vigilant 

Active 

Hercules 

Southery 

Panther 

Badger 

Resolute 

Mohawk 

Hist 

Restless 

Oneida 

Viking 

Vulcan 

Yankton 

Pontiac 

Peoria 

Gloucester 

Iris 

Pawnee 

Justin 

Sebago 

Aileen 

Ajax 

Frolic 

Supply 

Caesar 

Dorothea 

Gov.  Russell. 
East  Boston. 
Piscataqua. . . 

Apache 

Celtic 

Cassius 

Massasoit 

Hannibal 

Alexander . . . 


Leonidas 

Pompey 

Abarenda 

Scipio 

Brutus 

Water  Barge  No.l 

Nero 

Rainbow 

Enquirer 

Inca 

Huntress 

Stranger 

Seminole 

Cheyenne 

Siren 

Elfrida 

Sylph 

Shearwater 

Sylvia 

Chickasaw , 

Waban 

Kanawha , 

Pedro , 

Glacier , 

Marcellus 

Culgoa 

Arethusa 


Mar.  16,1898 

do 

Apr.  12,1898 

Apr.  11,1898 

Apr.  16,1898 

Apr.  29,1898 

Apr.  18,1898 

Apr.  6, 1898 

Apr.  9,1898 

Mar.  26,1898 

Apr.  19,1898 

Apr.  8, 1898 

Apr.  18,1898 

Apr.  19,1898 

Apr.  18,1898 

Apr.  26,1898 

Apr.  16,1898 

Apr.  19,1898 

do 

Apr.  21,1898 

Apr.  23,1898 

Apr.  22,1898 

do 

May  31,1898 

Apr.  22,1898 

Mav  2, 1898 

May  20,1898 

Apr.  23,1898 

May  23,1898 

Apr.  23,1898 

May  25,1898 

May  6, 1898 

Apr.  23,1898 

Apr.  30,1898 

May  2, 1898 

Mav  12,1898 

May  28,1898 

Apr.  30,1898 

Apr.  21,1898 

Mav  21,1898 

Mav  11,1898 

June  2, 1898 

May  11,1898 

May  24,1898 

May  14,1898 

Mav  24,1898 

Apr.  25,1898 

Apr.  16,1898 

Apr.  25,1898 

Apr.  16,1898 
Apr.  19,1898 
May     5, 1898 

do 

June  3, 1898 
May  25,1898 
June  30,1898 
June  29,1898 

do 

June  13.1898 
June    7, 1898 


June 
June 
July 
June 


9, 1898 
6, 1898 
8, 1898 
9. 1898 


June  15,1898 

June  —.1898 

Mav  9, 1898 

June  13,1898 

June  25,1898 

do 

June  7, 1898 

June  —  1898 

July  —,1898 

June  13,1898 


Brazilian  Government. 

Do. 
Hogan  Line. 

Ward  Line  Steamship  Co. 
Black  Diamond  Transportation  Co. 
American  Towing  Co. 
Philadelphia  Transportation  &  Light- 
ering Co. 
Frank  Smythe  &  Co. 
China  &  Manila  Steamship  Co. 
John  M.  Worth. 
W.  G.  Coyle. 
Walsh  &  Doran. 
J.  D.  Spreckels  Bros.  Co. 

Do. 

Do. 
Standard  Oil  Co. 
Edw.  Luckenbach. 
Red  D  Line  Steamship  Co. 
Ward  Line  Steamship  Co. 
Old  Dominion  Steamship  Co. 
Cornell  Steamboat  Co. 
David  Dows,  Jr. 
Hiram  W.  Sidley. 
Eugene  Tompkins. 
Horace  A.  Hutchins. 
Merchants  &  Miners'  Line. 
H.  E.  Converse. 
Merritt  &  Chapman. 
Philadelphia  Pilot  Association. 
Pierpont  Morgan. 
Miami  Steamship  Co. 
George  T.  Moon. 
Bowring  &  Archibald. 
O'Connor  &  Smoot. 
Richard  Stevens. 
Henderson  Bros. 
H.  N.  Hanna. 

International  Navigation  Co. 
J.  Holman  &  Sons. 
Thos.  McKean  estate. 
Citv  of  Boston. 

"Do. 
W.  H.  Brown. 

Merritt  &  Chapman  Wrecking  Co. 
Federal  Line  (London). 
William  Lamb. 
Moran  Towing  Co. 
Francis  Stanley  Holland  (London). 
New  Blue  Star  Line  Steamers  (Lon- 
don). 
Francis  Stanley  Holland  (London). 
Jas.  &  Chas.  Harrison  (London). 
J.  Graham. 
Geo.  P.  Walford. 
L.  F.  Chapman  &  Co. 
Standard  Oil  Co. 
McCondray  &  Co. 
Thomas  Ronaldson. 
W.  J.  Conners. 
Frank  B.  McQuesten. 
F.  C.  Fowler. 
Mrs.  Mary  Lewis. 
Boston  Towboat  Co. 
J.  J.  Cummings. 
J.  G.  Cassatt. 
Dr.  Seward  Webb. 
John  Roach  &  Co. 
Henrv  R.  Wolcott. 
Edward  M.  Brown. 
M.  Revel. 

Do. 
John  P.  Duncan. 
(Prize.) 

Federal  Line  (London.) 
Wm.  Lamb. 


Aug.  12, 1898     Thos.  S.  Hopkins. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      881 

Exhibit  No.  10. 

Navt  Department, 
WasJiington,  November  15,  1915. 
Hon.  William  G.  McAdoo, 

Secretary  of  the  Treasury. 
My  Dear  Mr.  Secretary  :  1.  In  reply  to  your  letter  of  the  llth  instant  re- 
questing information  regarding  vessels  chartered  by  the  Navy  during  the 
Spani.sh-Anierican  War,  I  have  the  honor  to  advise  you  that  there  was  paid  to 
the  International  Navigation  Co.  for  charter  and  running  expenses  of  vessels 
belonging  to  that  company  as  follows : 

Steamship  St.  Paul $377,  552.  55 

Steam.ship  St.   Louis 475,  778.  46 

Steamship  New  York 377,891.44 

Steamship  Paris 334,  911.  05 

$1,  566, 133.  50 

In  addition  to  above  there  was  allowed  the  International  Navi- 
gation Co.  for  restoration  of  the  vessels  to  their  original  con- 
dition as  fir.st-class  transatlantic  passenger  ships 647,  000.  00 

Sixty  days'  charter  while  undergoing  repairs 540,  000.  00 

Underwater  repairs  to  steamship  St.  Paul  and  steamship  St. 
Louis 21,  369.  90 

Total  paid  to  International  Navigation  Co 2,  774,  .503.  40 

2.  There  was  also  chartered  from  the  Pacific  Mail  Steamship 
Co.— 

The  steamship  City  of  Peking,  for  31  days 31,000.00 

And  from  the  city  of  Philadelphia — 

Ice  boat  No.  3,  at  the  nominal  price  of 1.00 

Total — 2,  805,  504.  40 

Sincerely,  yours, 

JosEPHUs  Daniels,  Secretary. 


Exhibit  No.  11. 

Specimen  actual  sales  of  ships  in  March,  1915,  and  February,  1916,  as  taken  from 
Shipping  Illustrated,  a  monthly  publication. 


Name. 

Nation. 

Gross 
tons. 

Dead- 
weight. 

BuUt. 

SoldfoiV- 

March,  1915: 

British 

4,662 
4,904 
3,774 
4,217 

4,962 
2,084 
4,777 
4,267 

7,700 
8,000 
6,200 
6,900 

8,300 
3, 500 
7,850 
7,360 

1906 
1907 
1905 

1912 
1S96 
1911 
1906 

$345,000 

Falls  of  Orchy  1 

Apollo  • 

.    do 

360,000 

do 

205, 000 

German 

212,500 

February.  1916: 

British 

900,000 

Gesto' 

Bra-Kar'                            

Norwegian 

do 

2.50.000 
500,000 

Earl  of  Douglas  * 

British 

585,000 

32910—16- 


'  The  average  price  of  these  4  ships  was  $64  per  gross  ton. 
2  The  average  price  of  these  4  ships  was  $138  per  gross  ton. 

— 25 


382      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Exhibit  No.  12. 

Comparative  statement  of  ocean  freight  rates  on  grain  and  cotton,  as  of  July  1, 
1914  (before  the  outbreak  of  the  European  war),  and  Feb.  10,  1016. 


Rotterdam. 


Name  of  port. 


Baltimore: 

Cotton,  per  bale 

Wheat,  per  bushel 

Boston: 

Cotton .  per  bale 
AMieat,  per  bushel 

Charleston,  cotton,  per  bale 

Galveston: 

CoTton,  per  bale 
Wheat,  per  bushel 

New  Orleans: 

Cotton,  per  bale 

^\^leat,  per  bushel 

New  York: 

Cotton,  per  bale 
\M3eat,  per  bushel 

Norfolk: 

Cotton,  per  bale 

■\\lLeat,  per  bushel 

Philadelphia: 

Cotton,  per  bale 
Wheat,  per  bushel 

Savannah,  cotton,  per  bale 


Full  cargo. 


2  Other. 


-  Not  quoted. 


*  Plus 5 percent. 


Exhibit  No.  13. 

Citizens  arriving  and  departing,  shown  by  months,  during  the  seven  months 
ended  February,  1914,  1915,  and  1916,  respectively. 


August 

September. 

October 

November. 
Pereraber. . 

January 

February . . 

Total 


Arriving. 


1913-14       1914-15       1915-16 


29,771 
42,001 
23, 020 
10. 8.58 
8, 890 
0,428 
7,174 


31,850 
44, 55(; 
19,897 
8,080 
4,725 
3,710 
4,209 


128,748  I    117,039 


4,982 
4,720 
3,800 
3,453 
3,078 
3,050 
3,222 


Departing. 


1913-14       1914-15 


20, 278 
12,033 
20,055 
14,. 309 
10,304 
17,208 
12,851 


23,3.38 
4,981 
4,900 
4,790 
5,148 
0.703 
4,529 


20,377  I     113,158         54,389 


1915-16 


6,723 
4,523 
4,413 
4,4.tO 
4,073 
4,015 
4,&33 


33,435 


Exhibit  14. 


P.  H.  W.  Ross,  president  of  the  National  Marine  Lea^e  of  the  United  States 
of  America,  says : 

"  *  *  *  The  subject  of  a  national  merchant  marine  is  most  vital  to  the  indi- 
vidual business  man  for  the  reason  that  even  if  his  own  particular  business  is 
fairly  well  taken  care  of  by  the  existing  shipping  facilities  of  to-day,  it  is  by  no 
means  true  that  the  business  of  his  (home  market  or  American)  customers  is 
adequately  accommodated,  and  certainly  no  one  needs  telling  that  the  surest 
way  of  doing  good  business  is  to  have  a  prosperous  line  of  customers ;  and  we 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      383 

can  not  have  universal  prosperity  in  normal  times  unless  the  country  as  a  whole 
and  tiie  entire  ran^e  of  average  manufacturers  has  at  least  the  same  oppor- 
tunity for  the  conduct  of  f<H-ei;;n  trade  that  the  very  lar^e  industries  I  have 
refei-red  to,  by  force  of  circumstances,  have  been  compelled  to  create  for  them- 
selves. 

"  The  productive  capacity  of  our  manufacturing  establishments  throughout 
the  country  has  so  far  exceeded  the  absorptive  powers  of  the  home  market  that 
In  four  months  the  country  can  produce  as  nmch  as  the  home  market  can  coa- 
sume  in  a  year ;  consequently,  if  we  expect  to  keep  down  overhead  charges,  to 
run  our  mills  continuously,  and  to  hold  skilled  labor  in  place,  we  must  enor* 
mously  increase  the  sale  of  products  to  people  who  do  not  live  in  the  United 
Stales.  'England  sells  55  per  cent  of  her  manufactures  to  people  living  outside 
of  her  national  workshop ;  Germany,  45  per  cent ;  the  United  States,  only  5  per 
cent. 

"  Why  this  appalling  difference?  The  reason  is  very  clear;  it  is  because  En^ 
land  and  Germany  control  the  ocean  transportation  of  their  products  to  the 
ultimate  consumers  thereof;  we  do  not;  and  until  our  laws  are  such  that  the 
foreign-shipping  pmixtsition  becomes  attractive  enough  for  American  citizens  to 
Invest  their  lives,  their  labor,  and  their  savings  therein,  never  will  be. 

"It  was  Hismarck  who  said  of  Germany:  'The  merchant-marine  service  Is 
the  handmaid  of  all  other  industries,  and  of  agriculture,  manufactures,  and 
commerce.  On  the  day  when  the  freight  trade  is  given  over  to  foreigners  a 
mortal  blow  will  be  dealt  to  all  the  industries  of  the  country.' " 


CREATING  A  SHIPPLNG  BOARD,  A  NAVAL  AUXILIARY,  AND  A 
MERCHANT  MARINE. 


Committee  on  the  Merchant  Marine  and  Fisheries, 

House  of  Representatives, 
Thursday^  February  17^  1916. 
The  Chairman.  We  have  with  us  this  afternoon  the  Secretary 
of  Labor,  Mr.  Wilson,  who  has  been  a  Member  of  several  Congresses, 
and  for  two  Congresses  a  member  of  this  committee. 

STATEMENT  OF  HON.  WILLIAM  B.  WILSON.  SECRETARY  OF 

LABOR. 

Mr.  Wilson.  Mr.  Chairman,  I  have  no  desire  to  take  up  very 
much  of  the  time  of  the  committee.  If  I  did  undertake  to  do  so, 
it  would  simply  be  to  a  great  extent  a  repetition  of  that  which  has 
been  said  to  you  by  the  Secretary  of  the  Treasury,  Mr.  IMcAdoo. 

I  concur  very  generally  in  the  viewpoints  he  has  expressed,  and 
anything  that  I  may  have  to  say  will  be  principally  supplemental 
to  that  which  he  has  said. 

To  my  mind  this  is  a  very  important  measure,  by  virtue  of  the 
fact  that  you  are  dealing  with  a  line  of  commerce  that  is  not  en- 
tirely and  at  all  times  under  the  jurisdiction  of  our  Government.  It 
is  only  under  the  jurisdiction  of  our  Government  when  it  is  being 
carried  in  American  bottoms,  or  when  it  is  within  American  waters. 
At  all  other  times,  and  under  all  other  conditions,  it  is  out  from 
under  the  jurisdiction  of  our  Government,  and  can  not  be  dealt 
with  in  exactly  the  same  way  as  you  would  deal  with  purely  internal 
affairs. 

That  has  been  one  of  the  reasons  for  the  dwindling  of  an  American 
merchant  marine.  We  have  endeavored  to  deal  with  it  upon  the 
theory  that  we  could  handle  it  in  exactly  the  same  manner  as  we 
handle  internal  affairs,  and  yet  our  vessels  have  had  to  go  out  in 
competition  with  the  vessels  of  all  the  world. 

I  do  not  believe  that  we  will  be  able  to  build  up  an  American  mer- 
chant marine  at  an  early  period  unless  we  pursue  a  policy  similar 
to  the  one  outlined  in  this  bill.  I  believe  that  it  is  not  only  needed 
for  the  purpose  of  meeting  an  emergency,  but  is  needed  also  as  a 
permanent  institution.  It  is  an  emergency  measure,  because  capital 
invested  in  the  seagoing  trade  goes  there  for  exactly  the  same  reason 
that  it  goes  into  business  enterprises  on  land.  Capital  will  not  seek 
investment  on  the  sea,  even  when  it  can  find  profitable  investment 
there,  if  it  can  find  more  profitable  investment  somewhere  else. 
Capital  invested  in  vessels  will  not  engage  in  profitable  lines  of  trade 
in  any  one  given  direction  if  it  can  find  more  profitable  trade  to 
engage  in. 

385 


386      SHIPPING  BOAED,  NAVAL  AUXILIAKY,  AND  MERCHANT  MARINE. 

And  whenever  you  have  an  abnormal  condition,  such  as  we  are 
passing  through  at  the  present  time,  then  there  is  the  tendency  of 
invested  capital,  capital  invested  in  vessels,  to  seek  to  utilize  those 
vessels  in  the  most  profitable  trade  available. 

When  men  engage  in  transportation  of  material  by  sea  their  pri- 
mary interest  is  in  the  profits  from  the  transportation.  Their  inter- 
est in  the  trade  itself  is  but  secondary.  Their  interest  in  it  is  only 
in  so  far  as  it  affects  their  ability  to  secure  the  highest  possible 
profits  in  the  transportation  of  the  freight.  And  hence  when  abnor- 
mal conditions  arise,  instead  of  the  sea  business  of  the  United  States 
being  taken  care  of  in  accordance  with  the  best  interests  of  that 
business,  the  commerce  of  the  sea  is  taken  care  of  in  accordance  with 
the  best  returns  that  can  be  secured  from  the  handling  of  that  com- 
merce. That  has  been,  in  a  great  measure,  responsible  for  the  taking 
of  vessels  from  the  Pacific  to  the  Atlantic,  that  has  been  mentioned 
in  the  testimony  here  this  afternoon.  They  were  taken  from  the 
Pacific  not  because  they  could  not  be  operated  profitably  on  the 
Pacific,  but  because  they  could  be  operated  more  profitably  on  the 
Atlantic. 

If  you  provide  means,  such  as  you  provide  here,  b}'  which  a  cor- 
poration controlled  by  the  United  States  Government,  the  stock 
owned  by  the  United  States  Government,  can  oAvn  vessels  to  be 
utilized  in  such  trade  the  primary  object  of  which  would  be  to  take 
care  of  our  commerce  and  our  industrial  affairs  within  our  country 
rather  than  the  making  of  profits  out  of  transportation,  then  those 
vessels  could  be  utilized  whenever  an  emergency  arose,  such  as  we 
are  facing  at  the  present  time;  if  we  owned  them  at  the  present 
time,  they  could  be  utilized  in  the  present  emergency  in  taking  care 
of  transportation  on  the  Pacific. 

It  does  not  follow  that  if  the  Government  engages,  through  a  cor- 
poration, in  lines  of  trade  where  private  capital  has  not  been  profit- 
ably engaged  in  the  past  that  it  would  necessarily  be  unprofitable 
for  the  Government.  The  only  thing  that  is  sure  in  connection  with 
it  is  that  private  capital  is  not  engaged  in  it.  That  it  may  have  been 
able  to  engage  in  that  line  of  trade  profitably  or  may  not  have  been 
able  to  engage  in  it  profitably  has  not  been  demonstrated  and  can 
not  be  demonstrated  until  you  have  made  the  actual  experiment. 

It  is  not  to  be  expected  that  private  capital  will  engage  in  a  busi- 
ness enterprise  where  those  who  engage  in  it  have  not  at  least  the 
vision  that  it  can  be  engaged  in  pi'ofitably. 

The  Chairman.  If  I  understand  it.  your  thought  is  this :  That  the 
Government  might  operate  vessels  without  loss  in  trade  where  pri- 
vate parties  might  not  care  to  operate  vessels  because  the  vision  of 
profits  would  not  be  sufRcientl,y  inviting  for  them  to  provide  the 
service. 

Secretary  Wilson.  Exactly.  That  is  my  position — that  private 
capital  will  invest  where  it  believes  it  will  get  the  greatest  returns. 
Private  capital  would  not  invest  even  where  it  is  sure  it  can  secure 
a  return  of  1,  2,  6,  or  10  per  cent  upon  the  investment  if  at  the  same 
time  in  some  other  line  of  iiisestment  it  can  secure  returns  of  15  or 
20  per  cent.  So  that  it  does  not  follow  that  because  private  capital 
is  not  engaged  in  it  that  it  can  not  be  operated  profitably. 

I  think  it  is  aclcnowledged.  so  far  as  our  Naval  Reserve  is  concerned, 
that  is,  so  far  as  our  auxiliary  vessels  for  our  Navy  is  concerned, 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      387 

that  there  has  never  been  as  many  supplied  to  the  Xaw  as  are  needed 
during  periods  of  ^var.  It  has  not  been  deemed  advisable;  nor  would 
it  be  advisable  to  do  so  if  the  vessels  which  are  supplied  to  the  Navy 
in  times  of  peace,  sufficient  to  equip  it  in  time  of  war,  were  to  remain 
idle  during  all  the  periods  of  peace. 

We  never  know — we  never  can  know  for  any  great  length  of  time  in 
advance  just  when  we  may  be  forced  into  conflict.  Avhether  we  have 
the  present  size  of  Navy  or  a  larger  size  of  Navy;  and  one  of  the  first 
things  essential  for  us  to  do  Avill  be  to  furnish  the  necessary  auxiliary 
vessels  to  make  our  war  vessels  the  most  highly  efficient  possible.  If 
we  do  not  provide  by  these  means  the  necessary  auxiliary  vessels,  then 
we  will  have  to  do  in  the  future  as  we  have  done  in  the  past  when  war 
confronts  us — go  out  into  the  market  and  buy  the  vessels  that  are 
necessary,  and  equip  our  Navy  with  those  vessels  at  prices  which  are 
abnormal.  And  then,  if  we  continue  to  pursue  the  same  policy,  after 
our  use  of  them  is  over,  again  sell  them  at  a  loss.  I  submit  that  it  is 
better  economic  policy  to  provide  th(;se  auxiliary  vessels  during  peri- 
ods of  peace  when  the  costs  are  more  likely  to  be  normal,  to  be  utilized 
during  those  periods  of  peace  in  the  carrying  of  the  commerce  of  our 
country  in  the  manner  that  has  been  suggested  in  this  bill. 

So  far  as  the  bill  itself  is  concerned  generally,  I  concur  in  the 
princi])les  embodied  in  it.  IJut  there  are  some  suggestions  of  amend- 
ment that  I  desire  to  make  and  to  assign  my  reasons  for  them.  One 
of  those  has  been  discussed  by  Secretary  McAdoo  to-day.  In  section 
3,  page  4,  after  the  word  "  Tutuila  "  in  line  14,  I  would  insert  the 
words : 

"  or  in  the  coastwise  trade  in  connection  with  and  incident  to  the 
transportation  of  commerce  with  foreign  countries,  the  Philippine 
Islands,  the  Hawaiian  Islands,  or  the  islands  of  Porto  Rico,  Guam, 
and  Tutuila." 

And  I  would  do  that  for  what  seems  to  me  to  be  sound  economic 
priucii)les.  I  believe  that  privilege  should  be  given  to  all  vessels  that 
come  under  American  registry  for  the  same  reason  that  I  would  give 
it  to  these  vessels.  But  there  is  a  stronger  economic  reason  why  that 
privilege  should  be  given  to  these  vessels.  It  is  contemplated,  as  one 
of  the  purposes  of  this  act,  that  we  shall  go  out  into  all  parts  of  the 
world  and  build  up  commerce  with  other  nations.  The  building  up 
process  means  that  you  will  not  always  be  able  to  get  a  full  cargo 
from  port  to  port.  It  Avill  be  necessar}'^  during  the  building-up 
process  to  take  cargoes  from  various  ports  in  our  country  to  various 
ports  of  the  country  to  which  you  are  destined,  or  possibly  to  differ- 
ent countries;  and  in  coming  back  it  will  be  necessary  to  take  cargoes 
or  parts  of  cargoes  from  various  ports  of  the  country  from  which 
you  come  to  various  ]K)rts  in  this  country. 

If  your  vessel  starts  from  South  American  countries  with  cargoes, 
part  of  which  are  to  be  delivered  at  Galveston,  part  at  Charleston, 
part  at  Baltimore,  and  ])art  at  Boston,  when  it  reaches  Galveston 
and  discharges  a  part  of  its  cargo  destined  for  that  port  it  can  not, 
unless  you  adopt  an  amendment  of  this  Irind,  fill  up  the  balance  of 
its  cargo  space  with  cargo  from  Galveston  to  any  other  of  the  United 
States  ports.  When  it  goes  to  Charleston  the  same  situation  con- 
fronts it.  And  so  it  is  compelled  to  carry  a  part  cargo  from  the  first 
port  of  call  to  the  final  port  of  call  without  having  the  opportunity 
of  taking  on  coastwise  cargo,  which  should  bear  part  of  the  burden 


388      SHIPPIKG  BOARD,  KAVAI.  AUXIJJAKY,  AND  MEHCHANT  MARINE. 

of  transportation  when  it  is  traveling  in  that  direction  any  way. 
The  inevitable  result  will  be  that  if  it  is  operated  at  cost  even,  the 
inevitable  result  must  be  that  the  cargoes  carried  between  the 
different  ports  of  the  United  States  and  diiferent  foreign  ports  must 
bear  the  entire  burden  of  the  cost  of  the  vessel  plying  between  the 
different  ports,  but  with  a  part  cargo  between  those  points. 

Mr.  Hardy.  So  that,  Mr.  Secretary,  with  this  amendment  one  of 
these  vessels  might  be  a  profit-earning  venture  wliile  without  it  it 
might  lose  money. 

Secretary  Wilson.  Yes.  Suppose  you  had  a  vessel,  as  I  have 
stated,  that  has  the  right  which  will  be  granted  by  this  amendment; 
it  comes  to  Galveston  with  a  full  cargo  from  South  America 

Mr.  Hardy.  While  you  were  trying  to  establish  a  line. 

Secretary  Wilson.  While  we  were  trying  to  establish  a  line.  It 
comes  to  Galveston  with  a  full  cargo  from  South  America;  it  dis- 
poses of  part  of  its  cargo  there;  it  takes  on  cargo  from  Galveston  to 
Charleston  to  fill  in  that  portion  of  its  cargo  space  which  has  been 
vacated  by  the  cargo  it  discharged  at  Galveston.  It  charges,  as  a 
matter  of  course,  the  local  rates  for  transportation  of  that  cargo  from 
Galveston  to  Charleston.  Then  when  it  gets  to  Charleston  it  dis- 
charges another  portion  of  its  foreign  cargo ;  it  takes  on  another  por- 
tion of  domestic  cargo;  it  discharges  also  a  portion  of  its  domestic 
cargo:  it  takes  on  more  domestic  cargo  to  fill  in  the  space  vacated,  and 
goes  on  to  Baltimore,  does  the  same  thing  there,  and  then  goes  on  to 
Philadelphia,  to  Boston,  to  New  York,  to  Providence,  or  any  other 
point  along  our  coast.  The  entire  cost  of  operation,  so  far  as  that 
space  is  concerned,  is  borne  b}'^  the  coastwise  trade,  and  the  only  cost 
that  would  have  to  be  borne  by  the  foreign  commerce  would  be  the  por- 
tion of  the  space  that  it  actually  occupied.  Your  vessels,  operated 
under  those  circumstances,  might  very  readily  operate  at  a  profit, 
where  if  they  were  compelled  to  carry  complete  cargoes  between  port 
and  port  they  would  be  compelled  to  operate  at  a  loss. 

And  so,  for  the  purposes  of  this  act,  I  would  give  to  those  vessels 
the  right  to  engage  in  the  coastwise  trade  in  connection  with  and  in- 
cident to  the  trade  with  foreign  countries  and  with  the  insular 
possessions  which  have  been  enumerated  in  this  bill. 

Mr.  EoAVE.  But  that  only  affects  foreign-biiilt  ships;  domestic- 
built  ships  can  do  that  now? 

Secretary  Wilson.  Domestic-built  ships  can  do  that  now,  but  for- 
eign-built ships  can  not  do  that.  Those  are  the  ones  that  will  be 
affected,  the  foreign-built  ships. 

I  would  insert  a  similar  amendment  wherever  the  same  line  of 
statement  occurs  in  the  bill,  such  as  in  section  4,  on  page  5,  in  line  18, 
after  the  word,  "  Tutuila  "  I  would  insert  the  same  words,  and  in 
section  8,  on  page  10,  line  25,  after  the  word  "Tutuila  "'  I  would  in- 
sert the  same  language,  except  that  I  would  use  "  and "  instead 
of  "  or." 

Then,  in  section  11,  where  you  provide  for  a  naval  reserve,  I  would 
make  it  more  clear  than  it  now  is,  that  in  return  for  the  money  you 
undertake  to  give  to  those  who  join  the  naval  reserve  you  get  some 
returns  in  training.  It  is  possible  that  the  language  used,  "  under 
such  regulations  as  may  be  prescribed  by  the  Secretary  of  the  Navy, 
with  the  approval  of  the  board,"  could  be  construed  to  include  train- 


SinrPINO  BOARD,  XAVAI.  A  T  X  n.lAR\\,  AX  D  MERCHANT  MARINE.       389 

mg.  But  in  order  that  it  be  made  clear  that  it  woiihl  include  train- 
ing I  would  insert,  after  the  word  "  regulations,"  the  words  "  and 
with  such  requiiements  for  training,"  so  that  it  would  read,  "  Under 
such  regulations  and  with  such  requirements  for  training  as  may  be 
prescribed  by  the  Secretary  of  the  Navy,  with  the  approval  of  the 
board,"  in  order  to  make  the  paragraph  entirely  clear. 

I  listened  to-day  to  the  discussion  concerning  the  provisions  of 
section  6  of  this  bill,  and  particularly  with  regard  to  that  portion 
of  it  which  provided,  "  and  hereafter  no  vessel  registered  or  enrolled 
under  the  laws  of  the  United  States  shall  be  sold  to  any  person,  firm, 
or  corporation  other  than  a  citizen  of  the  United  States,  or  trans- 
ferred to  any  foreign  registry  without  the  approval  and  consent  of 
said  board,"  and  so  on.  1  think  I  understand  and  I  fully  sympathize 
with  the  purposes  of  that  section ;  but  I  fear  that  in  order  to  get  away 
from  one  difficulty  you  are  creating  another  economic  difficulty  which 
will  be  still  worse. 

Since  the  beginning  of  the  war  in  Europe  there  have  been  a  great 
many  vessels  that  have  come  under  American  registry.  Some  of 
them  will  undoubtedly  remain  whether  we  pass  this  measure  or  not. 
Some  of  them  may  leave  American  registry  as  soon  as  the  war  is 
over  if  a  measure  of  this  kind  is  not  adopted.  If  I  understand  the 
purpose  of  this  section,  or  this  portion  of  this  section,  it  is  to  make 
it  impossible  for  the  foreign  vessel  owners  to  take  refuge  under  our 
registry  during  periods  of  world  disturbances  and  then  after  the 
world  disturbance  is  over  to  leave  the  American  registry. 

Mr.  Greene.  Let  mo  ask  you  a  question  right  there:  Would  that 
provision  leave  it  in  the  discretion  of  the  board?  It  does  not  say 
that  they  shall  not  do  it  if  the  board  sees  fit  to  do  it. 

Secretary  Wilson.  I  am  coming  to  that  phase  of  it.  It  does  not 
make  it  impossible  for  the  vessel  under  American  registry  to  leave 
American  registry;  what  it  does  do  is  to  make  it  impossible  for  a 
vessel  to  leave  xVmerican  registry  without  first  having  secured  the 
consent  and  approval  of  the  board. 

Mr.  Greene.  Yes:  and  if  it  Avere  possible  then  they  could  not  do  it; 
if  they  could  not  get  their  approval  they  might. 

Secretary  Wilson.  Without  having  the  consent  or  approval  of 
the  board  it  would  not  be  possible  for  them  to  transfer  from  Amer- 
ican registry.  Now.  suppose  you  had  had  a  provision  of  that  kind  in 
existence  when  the  war  began ;  how  many  of  those  vessels  that  have 
come  imder  American  registry  since  then  woidd  have  come  under 
American  registr}'^  with  this  kind  of  a  provision,  that  they  could 
not  without  the  consent  of  the  board  leave  that  registry  ?  They  would 
have  remained  there  under  the  flags  under  which  they  were  operat- 
ing or  they  would  have  gone  under  some  other  neutral  flag  where  a 
complete  title  remained  to  their  vessel. 

Mr.  Curry.  There  are  very  few  foreign  countries  that  permit  that 
now. 

Secretary  Wilson.  There  are  quite  a  few  that  permit  it,  and  those 
that  do  not  permit  it,  in  my  judgment  (and  I  do  not  present  this  as 
a  hard  and  fast  idea  from  which  there  would  be  no  retreat  on  my 
part ;  I  am  presenting  the  thought  for  the  consideration  of  the  com- 
mittee, for  such  action  as  it  may  see  fit  to  give  it)  it  occurs  to  nie 
that  if  vou  undertake  to  limit  the  title  which  the  owner  has  to  his 


390      SHIPPING  BOARD_,  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

property,  by  saying  to  him  that  he  can  not  dispose  of  that  property 
except  by  and  with  the  consent  of  a  board  herein  created,  the  men 
who  are  going  to  engage  in  the  overseas  trade  may  have  their  ves- 
sels built  in  American  ports,  may  have  them  built  abroad,  but  wher- 
ever they  have  them  built  they  will  have  them  registered  where  they 
have  the  most  complete  title  to  their  vessels;  and  instead  of  building 
up  a  merchant  marine  it  would  simply  result  in  our  retaining  what 
we  already  have,  which  is  not  great,  and  prevent  us  from  securing 
more  in  the  future.  I  may  be  entirel}^  wrong  in  my  economic 
analysis  of  the  operation  of  that  section,  but  I  commend  it  to  the 
careful  consideration  of  the  committee. 

Now,  Mr.  Chairman,  I  said  when  I  started  in  that  what  I  had  to 
say  would  be  supplemental  to  what  the  Secretary  of  the  Treasury 
had  said.  I  merely  in  addition  want  to  call  attention  to  the  fact 
that  the  American  labor  movement,  which  comprises  a  very  large 
portion  of  our  citizenship,  is  interested 

Mr.  Hardy.  Before  you  leave  that  question  you  last  suggested. 
You  suggested  it  rather  as  a  fear  than  as  a  conclusion  ? 

Secretary  Wilson.  Yes. 

Mr.  Hardy.  Now,  as  to  American-built  vessels,  which  have  always 
had  the  privilege  of  the  coastwise  trade  when  under  our  flag  and  our 
register :  As  a  matter  of  conclusion,  do  you  think  that  there  would  be 
any  danger  with  that  provision  remaining  there  (and  I  am  like  you, 
I  have  the  fear,  but  I  have  not  decided),  any  likelihood  of  an 
American-built  vessel  prizing  so  highly  its  privilege  to  sell  abroad 
that  it  would  decline  to  come  under  this? 

Secretary  Wilson.  There  is  that  possibility.  You  limit  the  market 
by  this  provision.  You  limit  the  market  in  which  a  vessel  can  be  sold 
whenever  the  owner  desires  to  dispose  of  the  vessel.  It  is  limited  to 
purchasers  who  are  citizens  of  the  United  States.  By  limiting  the 
market  in  which  it  can  be  sold  you  thereby  decrease  the  possible  value 
of  the  vessel  itself,  and  that  would  apply  to  the  vessel,  whether  it 
were  an  American-built  vessel  or  whether  it  were  a  foreign-built 
vessel  that  had  once  come  under  our  registry. 

I  can  understand  fully  why  a  provision  of  this  kind  should  be 
placed  in  the  bill,  to  be  applied  to  all  vessels  which  are  leased  or  sold 
by  this  board,  because  one  of  the  purposes  of  this  board 

Mr.  Hardy.  Does  not  that  apply  here  to  the  same  extent? 

Secretary  Wilson.  Oh.  no;  it  does  more  than  that;  because  one  of 
the  puri^oses  for  the  creation  of  this  board  and  the  giving  to  them 
of  the  powers  which  they  have  is  to  give  tliem  control  over  vessels 
which  may  be  used  as  auxiliary  vessels  as  well  as  for  the  expansion 
of  our  commerce.  So  that  I  can  understand  fully  why  it  would  be 
necessary  to  have  a  provision  in  this  section  whereby  those  vessels 
which  are  leased  by  the  board,  or  sold  by  the  board,  would  still  re- 
main under  American  registry,  and  could  not  be  disposed  of  other- 
wise. But  this  goes  to  a  broader  field,  and  asserts  that  no  vessel  un- 
der American  registry  can  be  transferred  withoiit  the  consent  of  the 
board,  and  I  fear  the  economic  effect  of  a  provision  of  that  kind  in 
this  law. 

Mr.  Hardy.  Right  there.  Perhaps  you  are  right  about  this  bill, 
but  I  was  going  to  say  the  fear  you  express  is  probably  intended  to  be 
met  by  the  permisison  that  the  board  may  give  the  owner  of  the  ves- 
sel, so  that  I  apprehend  it  was  supposed  that  the  owner  of  the  vessel 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.       391 

could  always  get  the  consent  of  the  board  to  sell  the  vessel  unless  it 
was  in  time  of  war,  w'hen  the  needs  of  our  country  required  that  the 
owner  of  the  vessel  should  be  refused  the  permission.  In  other 
words,  in  normal  times  if  some  excessive  demand  somewhere  else 
should  enable  the  shipowner  to  go  elsewhere  and  get  a  price  for  his 
vessel  he  would  have  no  trouble  in  getting  permission  to  sell;  but  if 
we  had  a  condition  like  that  which  exists  now,  when  we  needed  the 
vessel  worse  than  any  other  country,  even  though  some  other  country 
might  in  stress  be  willing  to  pay  a  higher  price  for  the  vessel,  I  ap- 
prehend he  could  not  sell.  I  think  the  granting  to  the  board  of  the 
right  to  give  consent  was  intended  to  meet  the  objection  you  have  ex- 
pressed. 

Mr.  Curry.  In  other  W'ords,  put  it  this  way:  At  the  present  time 
we  are  losing  nearly  as  much  tonnage  as  we  are  gaining ;  that  is,  we 
have  gained,  under  the  law  passed  last  year,  some  tonnage,  but  we 
have  sold  a  great  many  ships  to  foreign  owners,  and  they  have  trans- 
ferred to  their  flag.  Don't  you  think  that  in  a  condition  like  that 
confronting  the  United  States  at  the  present  time  that  this  board  or 
some  other  board  ought  to  have  the  authority  to  say,  in  a  condition 
of  this  kind,  that  an  American  ship  ought  not  to  be  sold  to  a  foreign 
owner  ? 

'  Secretary  Wilson.  No;  I  do  not  think  so.  The  only  time  that 
such  power  should  exist  in  any  governmental  authority  as  applied 
to  our  vessels  is  during  a  period  when  the  President  has  declared  our 
neutrality  because  of  wars  existing  abroad  or  during  a  period  when 
we  are  at  war  ourselves;  and  I  do  not  believe  this  power  should  be 
granted  to  a  board  under  any  other  conditions  than  these  abnormal 
conditions. 

Mr.  Curry.  This  board  would  undoubtedly  authorize  the  sale  of 
American  ships  in  times  of  world  peace. 

Secretary  Wilson.  It  is  optional  with  them,  however 

Mr.  Curry.  Certainly. 

Secretary  Wilson  (continuing).  As  to  whether  they  Avill  or  not, 
and  it  will  depend  in  great  measure  upon  the  concept  that  the  board 
has  as  to  the  purpose  of  this  particular  act  as  to  whether  they  do  or 
not.  And  upon  the  face  of  it  it  seems  to  have  the  appearance  of 
endeavoring  to  retain  under  American  registry  every  vessel  that  takes 
out  American  registry.  And  by  virtue  of  the  fact  that  you  under- 
take to  retain  those  who  come  under  American  registry  you  are  apt 
by  that  very  act  to  prevent  them  from  taking  American  registry. 
That  is  the  thing  that  I  fear,  and  I  throw  it  out  merely  as  a  sugges- 
tion and  not  as  an  absolute  conclusion. 

Mr.  Curry.  I  am  sorry  I  broke  in  on  your  speech ;  but  that  is  one 
of  the  best  features  in  the  bill,  according  to  my  judgment,  and  I  am 
sorry  to  see  you  take  the  stand  you  do. 

Secretary  Wilson.  As  I  have  stated,  I  want  to  call  attention  to 
the  fact  that  the  American  labor  movement,  representing  a  large 
portion  of  our  citizenship,  is  interested  in  the  passage  of  a  measure 
of  this  kind. 

I  may  say  in  passing  that  while  I  have  suggested  some  amend- 
ments I  have  suggested  them  purely  because  I  believe  they  will  make 
a  more  perfect  bill  than  you  have  before  you ;  that  it  wdll  accomplish 
the  purpose  you  seek  to  accomplish  better  by  having  the  amendments 
I  have  suggested  introduced  than  it  would  otherwise.    But  whether 


392      SHIPPIXG  BOAED^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

the  amendments  are  accepted  by  the  committee  or  are  not  accepted 
by  the  committee,  I  believe  that  the  great  purpose  that  is  sought  to 
be  accomplished  by  the  bill  will  be  met  to  such  an  extent  by  the  bill 
as  it  stands  noAv  that  I  for  one  would  not  jeopardize  the  passage  of 
the  measure  by  insisting  upon  any  amendment  to  it. 

The  American  Federation  of  Labor  at  its  convention  in  San  Fran- 
cisco on  November  16,  1915,  adopted  a  resolution  (resolution  No.  33) 
indorsing  this  particular  kind  of  legislation,  and  I  would  like  to 
insert  the  preamble  and  the  resolutions  in  the  record,  if  I  may. 

The  Chairman.  If  there  is  no  objection,  that  may  be  done.  (The 
resolution  will  be  found  at  the  conclusion  of  the  Secretary's  state- 
ment.) 

Secretary  Wilson.  The  annual  convention  of  the  International 
Seamen's  Union  of  America,  in  convention  at  San  Francisco,  August 
4,  1915,  also  adopted  resolutions  favorable  to  this  kind  of  legislation, 
which  I  would  like  to  have  included  in  the  record.  And  the  thirty- 
third  annual  convention  of  the  Illinois  State  Federation  of  Labor 
adopted  similar  resolutions,  which  I  would  like  to  have  included 
in  the  record. 

The  Chairman.  It  will  be  so  ordered,  without  objection.  (The 
resolutions  will  be  found  at  the  conclusion  of  the  Secretary's  state- 
ment.) 

Mr.  Curry.  I  notice,  Mr.  Secretary,  that  you  and  the  Chief  of 
the  Bureau  of  Navigation  agree  on  the  proposition  that  this  bill 
is  providing  machinery  for  the  permanent  entry  of  the  Government 
into  the  shipping  business.  But  upon  that  proposition  you  and  the 
Secretary  of  the  Treasury  do  not  agree.  The  Secretary  of  the  Treas- 
ury says  that  this  is  a  temporary  emergency. 

Secretary  Wilson.  I  do  not  quite  understand  that  that  is  the  posi- 
tion of  the  Secretary  of  the  Treasury.  As  I  understand  the  Secre- 
tary of  the  Treasury's  position,  he  draws  a  distinction  between  the 
Government  going  into  the  shipping  business  and  a  corporation 
going  into  the  shipping  business  in  which  the  Government  OAvns  a 
majority  or  all  of  the  stock,  and  that  the  Secretary  of  the  Treasury 
makes  a  very  decided  distinction  between  the  two. 

I  feel  that  this  is  the  manner  in  which  this  matter  should  be 
handled:  It  should  be  handled  through  a  corporation  instead  of 
handling  it  directly  through  the  Government.  If  you  undertake  to 
handle  it  directly  through  the  Government,  then  you  would  have  to 
amend  your  laws  relative  to  going  into  the  Court  of  Claims.  As  it 
is  now,  no  one  can  sue  the  Government  without  going  into  the  Court 
of  Claims  and  having  an  adjudication  of  the  question  in  dispute. 
Then  before  you  can  recover,  no  matter  what  has  been  awarded  by 
the  Court  of  Claims,  you  have  to  come  to  Congress  and  secure  the 
passage  of  a  bill  authorizing  the  payment  of  the  amount  awarded  by 
the  Court  of  Claims.  That  machinery  would  have  to  be  amended 
entirely  before  the  Government  could  go  into  the  shipping  business 
direct.  But  when  you  undertake  to  organize  a  corporation  and  own 
a  majority  or  all  of  the  stock  of  that  corporation,  then  that  corpora- 
tion comes  under  the  same  laws  and  regulations  that  other  corpora- 
tions do,  and  can  sue  or  be  sued,  and  when  a  judgment  is  obtained  in 
the  courts  a  recovery  can  be  had  entirely  in  the  same  manner  as  re- 
covery is  secured  against  any  other  corporation. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      393 

Mr.  Curry.  That  statement  of  fact  and  law  is  understood,  I  think. 
I  was  very  careful  to  make  my  question  very  explicit  to  the  Secre- 
tary of  the  Treasury,  and  from  his  answer  I  think  he  disagrees  with 
you  in  your  conclusion.  I  asked  him  if,  in  his  opinion,  he  thought 
the  Government  at  any  time  in  the  future  would  be  called  on  to  ap- 
propriate more  than  this  $50,000,000  for  this  corporation,  and  he 
said  he  did  not  think  so.  Then  I  asked  him  if  it  was  a  temporary  in- 
vestment on  the  part  of  the  Government  in  this  proposition,  or 
whether  it  was  a  permanent  entry  by  the  Government  into  the  mer- 
chant marine  business,  through  this  corporation,  and  he  said  he  did 
not  think  it  was  a  permanent  entry.  You  and  the  Secretary  of  the 
Treasury  seem  to  disagree  on  that. 

Secretary  Wilson.  No  ;  I  do  not  think  we  disagree  at  all.  I  think 
I  understand  the  Secretary's  position,  and  I  don't  think  we  disagree 
whatever.  I  do  not  believe  that  any  man  (and  I  think  the  Secretary 
of  the  Treasury  takes  the  same  position)  can  at  this  time  say  what 
any  future  Congress  may  do,  or  what  any  future  administration  will 
recommend.  That  is  entirely  problematical,  and  there  is  no  man 
living  at  the  present  time  who  is  able  to  give  either  an  affirmative 
or  a  negative  answer  to  the  question  as  to  what  a  future  Congress  or 
a  future  administration  is  likely  to  do. 

Mr.  CuRKY.  But,  in  your  opinion,  it  is  a  permanent  entry  of  the 
Government  into  the  shipping  business  through  this  corporation? 

Secretary  Wilson.  If  this  bill  is  enacted  into  a  law  it  would  stand 
until  it  was  amended  or  repealed. 

The  CiiAiR^iAN.  Kight  (m  that  point,  ^h\  Curry,  if  the  Govern- 
ment was  going  into  the  business  permanently  to  supply  all  the  needs 
of  our  American  merchant  marine,  it  would  involve  the  expenditure 
of  much  more  than  $50,000,000,  would  it  not  ? 

Mr.  Curry.  Yes;  and  that  is  what  I  asked  the  Secretary  of  the 
Treasury. 

The  Chairman.  And  that  could  not  be  done  without  the  future 
action  of  Congress. 

Secretary  Wilson.  And  that  at  the  present  time,  Mr.  Chairman, 
does  not  seem  to  be  essential.  What  the  future  people  in  Congress 
or  the  future  people  administering  the  Government  may  look  upon 
as  being  essential  we  can  not  say,  of  course,  but  it  does  not  seem,  at 
the  present  time,  to  be  necessary  to  expend  more  than  is  proposed 
to  be  expended  in  this  bill.  As  was  so  clearly  stated  by  the  Secre- 
tary of  the  Treasury  the  influence  of  the  vessels  that  may  be  pro- 
vided b}'  this  bill,  although  the  number  may  be  small,  the  influence 
which  they  will  wield  upon  transportation  by  sea  is  incalculable; 
but,  at  this  time,  it  does  not  seem  to  be  at  all  necessary  to  provide 
for  the  expenditure  of  more  than  the  $50,000,000  already  provided 
in  this  bill. 

Mr.  Curry.  In  Great  Britain  they  construct  ships,  or  they  have 
constructed  ships,  or  did  construct  ships  before  this  war,  cheaper 
than  we  do  in  the  United  States.  I  do  not  think  there  is  any  par- 
ticular reason  why  the  difference  in  cost  should  be  so  great,  as  the 
material  in  the  ships  only  costs  about  three-eighths  of  1  per  cent 
more  than  in  this  country,  although  the  labor  is  considerably  higher. 
But  one  of  the  reasons,  in  my  opinion,  for  the  excessive  cost  of  ships 
in  this  country  over  Great  Britain  was  that  the  types  of  ships  are 
standardized  there. 


394      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE- 

Secretary  Wilson.  That  was  brought  out  very  clearly  in  the  in- 
vestigation by  the  committee  conducted  by  Judge  Alexander  in  the 
Sixty-second  and  Sixty-third  Congresses,  that  the  one  great  reason 
why  vessels  cost  more  for  building  in  this  country  than  they  do 
abroad  is  because  vessels  are  standardized  abroad.  The  different 
yards  build  certain  types  of  vessels  over  there,  while  in  our  yards 
they  build  various  types.  And  it  was  clearly  stated  to  our  committee 
during  the  bringing  out  of  that  testimony  that  men  may  go  to  the 
Clyde,  the  Tyne,  or  other  shipyards  there  and  ask  for  bids  for  build- 
ing certain  types  of  vessels  and  they  would  be  told  frankly  that  the 
yard  did  not  build  that  kind  of  vessel  and  they  would  not  bid  on  it, 
but  they  would  refer  them  to  some  other  yard  where  they  built  that 
particular  type  of  vessel.  We  have  not  been  doing  that,  which  is 
due  to  the  fact  that  we  have  had  a  very  small  merchant  marine,  and 
there  has  not  been  the  same  opportunity  for  expansion  of  our  yards. 
Now,  if  you  supplement  the  legislation  that  has  already  been  passed 
by  passing  legislation  of  this  character  and  build  up  a  big  merchant 
marine,  then  the  tendency  will  be  on  the  part  of  our  shipbuilders  to 
standardize  the  vessels  that  they  build  also. 

Mr.  Curry.  That  would  be  a  matter  of  business.  It  would  not  be 
necessary  to  pass  any  law  ordering  them  to  do  that.  I  have  a  con- 
crete case  in  point.  The  Union  Iron  Works,  in  San  Francisco,  three 
or  four  years  ago  constructed  a  ship  on  a  bid  of  $1,000,000.  They 
constructed  identically  a  sister  ship,  from  the  same  plans  and  speci- 
fications, at  a  saving,  if  I  remember  correctly,  of  $200,000  or 
$300,000.  In  this  country,  for  every  ship,  nearly,  that  is  constructed 
or  built,  they  draw  separate  plans  and  specifications;  they  have  not 
any  standard  form  or  type  of  ship,  but  when  they  do  build  more 
than  one  of  similar  type,  they  can  build  the  second  ship  cheaper 
than  the  first. 

Secretary  Wilson.  That  was  also  clearly  shown  to  the  committee, 
that  on  the  Lakes,  where  they  do  standardize,  we  build  ships  cheaper 
than  where  they  are  built  on  the  Clyde,  the  Tyne,  or  anywhere  else 
in  the  world. 

The  Chairman,  We  are  very  much  obliged  to  you,  Mr.  Secretary. 

Uksoit  riox  No.  8o,  Adopted  by  the  Amehican   Federatiox  of  Labor  at  Its 
Convention  in  San  Francisco,  Cal.,  November  16,  1915. 

Wlicreas  tlie  American  Federation  of  Labor  is  unalterably  opposed  to  ship  sub- 
sidies wliicli  take  public  moneys  for  the  imri)ose  of  pronintinj?  private  gain; 
and 

Whereas  an  American  merchant  marine  can  be  built  up  on  a  basis  that  will 
give  freedom  to  the  seamen  and  safety  to  the  traveling  public  without  re- 
sorting to  subsidies ;  and 

AVhereas  tlie  present  world  crisis  lias  demonstrated  that  the  building  up  of  an 
American  mercliant  marine  is  essential  for  the  extension  and  protection  of 
our  foreign  trade  and  vital  to  the  interests  of  all  classes  of  our  people;  and 

Whereas  an  American  merchant  marine,  with  an  American  personnel,  is  the 
only  safe  method  of  providing  an  effective  naval  auxiliary  which  will  pro- 
mote our  conuuerce  in  times  of  peace  and  furnish  us  the  means  of  defense  in 
times  of  danger;  and 

^\'hereas  private  capital  has  failed  during  the  past  50  years  to  develop  or  main- 
tain a  merchant  marine  luider  our  flag,  leaving  the  vital  interests  of  the 
country  unprotected  either  by  the  building  and  operation  of  the  necessary 
ships  or  the  creation  of  a  trained  body  of  seamen,  upon  whose  allegiance  the 
countiw  nuist  depend  in  a  crisis :  Therefore  be  it 
Resolved,  That  the  American  Federation  of  Labor  is  heartily  in  favor  of  the 

immediate  creation  by  the  United  States  Government  of  an  American  merchant 


SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      395 

marine  to  be  manned  by  American  seamen  under  conditions  that  will  make 
tliem  an  effective  naval  reserve,  and  recommends  to  the  Coni;;ress  of  the  United 
States  prompt  passage  of  legislation  for  the  establishment  of  a  shipi)iiig  board 
for  the  building  or  purchase  of  vessels  bv  the  ITnited  States  Government  to  be 
operated  for  the  development  of  our  foreign  trade  under  conditions  that  will 
give  safety  to  the  traveler  and  freedom  to  the  seamen  and  to  be  available  as 
an  effective  naval  auxiliary  for  the  protection  of  our  country  in  time  of  war; 
and  be  it  further 

Resolved,  That  the  executive  council  be  directed  to  present  this  resolution  to 
the  President  and  Congress  of  the  United  States  and  that  all  affiliated  bodies 
be  advised  to  adopt  and  submit  the  substance  of  this  resolution  to  their  re- 
spective Senators  and  Congressmen. 


flESOLUTioN  No.  11,  Adopted  by  the  Nineteenth  Annual  (Convention  of  the 
Internationai,  Seamen's  Union  of  America. 

August  4,  1915. 
Whereas  shipowners  and  their  associates  insist  that  they  can  not  operate 
vessels  under  the  American  (lag  in  competition  with  vessels  under  the  Hag  of 
some  other  nation  uidess  they  be  permitted  to  run  their  vessels  in  their  own 
way  without  being  hampered  by  laws  and  rules  that  exist  for  the  purpose  of 
protecting  the  freedom  of  the  seamen  and  the  lives  of  pas.songers ;  and 
Wliereas,  after  more  than  one  century  of  practically  such  condition,  the  United 
States,  at  the  opening  of  the  present  war  in  Europe,  found  itself  with  very 
few  vessels  in  the  foreign  trade,  ami  practically  no  native  or  naturalized 
seamen  in  any  trade :  Therefore, 

Rcnolvcd  bii  the  International  Seamen's  Union  of  Anteriea  in  eonvention 
assembled.  That  we  favor  the  so-called  McAdoo  shipping  bill  and  urge  itf« 
enactment  into  law. 

Resolved,  That  a  copy  of  these  resolutions  be  forwarded  to  Mr.  McAdoo, 
Secretary  of  the  Treasury;  to  the  proper  committee  of  Congress;  and  to  the 
Ijress ;  and  further 

Rexolred,  That  these  resolutions  be  submitted  to  the  convention  of  the  Ameri- 
can Federation  of  Labor  for  a<l()ption,  and  our  delegates  there  be  instructed 
to  do  all  in  their  power  to  furnish  said  convention  with  all  the  facts,  to  the 
end  that  the  labor  movement  of  the  country  be  fully  informed. 


Resolutions  Adopted  by  the  Thikty-Thhjd  Annual  Convention  of  the 
Illinois  State  Federation  of  Lahok  re  Sihp-Purchase  Bill. 

October  22, 1915. 

Whereas  after  21  years  had  elapsed  since  the  seamen's  bill  was  first  placed 
before  Congress,  after  testimony  tilling  many  printed  volumes  had  been  heard, 
in  the  taking  of  which  the  shipowners,  including  representatives  of  foreign 
shiiti)ing  interests  in  person  and  liy  attorneys,  were  given  every  opportunity  to 
disi)n»ve  the  claims  of  the  seamen,  after  careful  consideration  by  the  Com- 
mittee on  the  Merchant  Marine  and  Fisheries  of  the  House  of  Representatives 
and  the  Committee  on  Commerce  of  the  Senate,  and  after  having  been  the  sub- 
ject of  debate  in  both  Houses  on  numerous  occasions,  the  Sixty-third  Congress 
enacted  the  bill  into  the  law  now  known  as  the  seamen's  act;  and 

Whereas  the  said  act  provides  freedom  and  an  opportunity  to  secure  justice  for 
the  sailor,  promotes  safety  of  life  at  sea  for  the  traveling  public,  and  will 
make  possible  the  upbuilding  of  the  American  merchant  marine  without  the 
aid  of  subsidies  ;  and 

Whereas  the  shipping  interests  are  clamoring  for  a  repeal  of  this  act,  the  ship- 
owners of  foreign  countries  using  their  American  partners  as  press  agents  to 
influence  the  public  mind  against  the  law,  and  the  shipowners  in  tlie  American 
coastwise  trade  who  1kiv(>  a  monopoly  by  law  (no  foreign  vessels  being  allowed 
to  enter  the  coastwise  trade,  although  there  is  no  such  restrictions  as  to  the 
nationality  of  the  men  employed  on  such  vessels)  are  opposed  to  the  upbuild- 
ing of  American  merchant  marine  in  tlie  over-sea  trade  because  more  Ameri- 
can vessels  means  more  competition  in  the  coastwise  trade ;  and 


396      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Whereas  the  shipping  interests,  both  American  and  foreign,  continue  to  insist 
upon  the  repeal  of  the  law  and  the  reestablishment  of  the  slave  system  under 
which  seamen  can  be  and  are  forced  to  endure  involuntary  servitude,  the  ship- 
ping interest  claiming  that  such  slave  system  is  necessary  to  their  business; 
and 
Whereas  there  is  now  before  the  country,  introduced  in  the  last  Congress  and 
will  be  reintroduced  in  the  next  Congress,  a  bill  known  as  the  ship-purchase 
bill  providing  for  the  purchase  and  operation  of  merchant  ships  by  the  United 
States  Government ;  and 
Whereas  private  shipowners,  by  their  insistent  demand  for  the  repeal  of  the 
seamen's  act  and  the  continuation  of  the  slave  system  on  board  ship,  have 
again  furnished  proof  that  they  are  unfit  to  control  the  sea  commerce  of  the 
United  States:  Therefore,  be  it 

Resolved,  That  the  Illinois  State  Federation  of  Labor  in  convention  assembled 
protest  any  and  every  attempt  to  repeal  or  emasculate  the  seamen's  act:  And 
further 

Resolved,  That  this  convention  also  hereby  urges  upon  Congress  the  necessity 
for  the  enactment  of  the  ship-purchase  bill,  providing  for  the  operation  by  the 
Government  of  properly  constructed,  equipped,  and  manned  vessels  in  the  mer- 
chant trade,  as  a  safeguard  to  the  Nation,  to  the  traveling  public,  and  to  the 
seamen,  against  the  greed  of  private  shipowners :  And  further 

Resolved,  That  copies  of  this  resolution  be  sent  to  the  President  of  the  United 
States,  to  the  members  of  the  President's  Cabinet,  and  to  the  Senators  and  Con- 
gressmen from  the  State  of  Illinois. 

(Thereupon,  at  5.15  p.  m.  the  committee  adjourned  to  10  o'clock 
a.  m.  Friday,  February  18,  1916.) 


I 


CREATING  A  SHIPPING  BOARD,  A  NAVAL  AUXILIARY,  AND  A 
MERCHANT  MARINE. 


Committee  on  the  Merchant  Marine  and  Fisheries, 

House  of  Representatives, 
Friday^  February  18,  1916. 
The  committee  met   at   10  o'clock  a.   m.,  Joshua   W.   Alexander 
(chairman)  presiding. 

The  Chairman.  We  have  with  us  this  morning  Mr.  Devereux  Lake, 
manager  of  the  export  sales  office  of  the  American  Cast  Iron  Pipe 
Co.,  of  Birmingham,  Ala.,  whose  address  is  No.  41  Broadway,  New 
York  City.  He  will  call  our  attention  to  a  very  exasperating  condi- 
tion in  the  matter  of  the  transportation  facilities  in  the  foreign 
trade. 

STATEMENT    OF    MR.    DEVERETJX    LAKE,    41    BROADWAY,    NEW 
YORK,    MANAGER    OF    THE    EXPORT    AND    EASTERN    SALES 
OFFICE    OF   THE    AMERICAN   CAST   IRON  PIPE    CO.,    OF   BIR- 
MINGHAM, ALA. 

Mr.  Lake.  Mr.  Chairman  and  gentlemen,  I  am  here  as  the  repre- 
sentative of  the  American  Cast  Iron  Pipe  Co.,  of  Birmingham,  Ala. 

The  Chairman.  I  will  say  at  this  point  that  a  letter  was  written 
to  the  Secretary  of  Commerce  by  the  representative  of  this  firm. 
That  letter  was  placed  in  the  record  February  10  (p.  126),  and  this 
gentleman  refers  to  the  same  matter. 

Mr.  Lake.  I  want  to  say  at  the  outset  that  I  did  not  come  to  Wash- 
ington to  advocate  nor  to  oppose  the  shipping  bill.  Through  the 
courtesy  of  Secretary  Redfield,  of  the  Department  of  Commerce,  I 
was  introduced  to  your  chairman,  Avho  invited  me  to  place  our  trouble 
before  you  gentlemen.  We  had  already  appealed  to  the  Department 
of  Commerce  for  assistance  and  relief  in  the  face  of  a  business 
dilemma  with  which  we  are  confronted  at  the  present  time. 

In  order  to  get  the  facts  before  you  in  a  salient  form,  I  am  going 
to  ask  the  privilege  of  referring  to  some  notes  which  I  have  made, 
inasmuch  as  I  am  not  accustomed  to  appearing  in  public  meetings. 
And  I  must  confess  that  my  knees  are  a  little  weak  and  my  mind 
does  not  work  as  well  at  first. 

I  am  here  as  a  last  resort  asking  you,  if  possible,  to  help  us  solve 
the  problem  which  we  are  powerless  to  solve  ourselves.  As  we  say 
down  in  Alabama  "  there  ain't  no  nigger  in  this  woodpile."  We  are 
laying  our  cards  on  the  table  before  you.  And  I  would  like  to  say, 
in  the  beginning,  that  we  have  no  quarrel  Avith  any  steamship  owner 
or  steamship  company  of  this  countiy.  We  are  good  friends  of  the 
ship  companies,  as  we  are  also  of  the  railroads,  and  it  is  to  our  in- 
terest to  work  harmoniously  with  them.     As  the  largest  individual 

32910—16 26  397 


398      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

pipe  foundry  in  the  United  States,  with  a  daily  ca[)acity  of  400  tons  of 
pipe,  we  turn  over  to  the  transportation  lines  a  good  many  thousand 
tons  per  month  and  per  year.  If  our  steamship  companies  could 
give  us  relief  or  handle  the  business  we  have  to  offer  them  to-day  on 
anything  like  reasonable  terms,  we  would  not  be  here  now. 

In  order  to  introduce  this  situation,  I  am  going  to  refer  to  the 
letter  Avhich  the  chairman  has  mentioned.  Some  10  days  ago  I  wrote 
to  Dr.  Pratt,  Chief  of  the  Bureau  of  Foreign  and  Domestic  Com- 
merce, Avho  has  rendered  us  invaluable  assistance  in  getting  us  in 
touch  with  the  export  field.  The  letter  to  Dr.  Pratt  was  prompted 
by  a  cable  which  I  received  from  our  agents  in  Buenos  Aires,  advis- 
ing us  that  the  Argentine  Kepublic  would  receive  proposals  on  the 
14th  day  of  March,  next,  for  approximately  28,000  tons  of  cast- 
iron  water  pipe.  In  view  of  the  abnormal  freight  situation,  I  Avrote 
to  Dr.  Pratt,  putting  this  matter  before  him  and  advising  him  of 
the  situation.  I  told  him  that  within  a  short  time  the  president  of 
our  company,  Mr.  G.  R.  McWane,  would  arrive  in  Buenos  Aires, 
find  that  I  expected  a  cable  from  Mr.  McWane  on  his  arrivel  which 
I  felt  sure  he  Avould  send  in  order  to  find  out  what  we  might  do  in 
the  way  of  getting  freight  rates.  I  told  Dr.  Pratt  that  we  had  in- 
vestigated the  situation  and  there  seemed  to  be  absolutely  no  chance 
for  us  to  get  any  regular  steamship  line  to  make  us  a  definite  freight 
rate  on  this  movement.  In  view  of  that  situation  I  asked  Dr.  Pratt 
to  bring  the  matter  before  the  Department  of  Commerce  and  the 
Congress  of  the  United  States,  in  order  to  ascertain  if  any  help 
could  be  given  us  from  these  sources. 

Now  this  we  consider  a  unique  opportunity  could  Ave  take  ad- 
vantage of  it.  Practically  all  of  the  water  pipe  for  the  Argentine 
Pepublic  has  been  furnished  by  European  foundries;  but  on  ac- 
count of  the  war  in  Europe  the  French,  Belgian,  and  Germans  are 
now  out  of  that  field.  Our  only  competition  to-day  in  this  business 
w^ill  be  with  the  British. 

Last  spring  I  had  the  pleasure  of  making  a  six  months'  visit  to 
South  America,  visiting  all  the  capitals  of  the  various  countries.  The 
principal  obstacle  that  I  found  in  the  way  of  our  being  able  to 
introduce  our  water  pipe  Avas  due  to  the  fact  that  heretofore  our 
American  specifications  have  been  unknoAvn.  It  is  specifically  pre- 
scribed in  the  official  publications  of  those  countries  in  AA'hich  they 
advertise  for  bids  that  pipe  shall  come  from  well-knoAvn  European 
foundries.  They  have  not  even  recognized  the  fact  that  Ave  have 
foundries  in  this  country,  and  are  in  a  position  to  furnish  pipe  as 
they  want  it.  Furthermore,  European  foundries  have  furnished 
pipe  according  to  European  standards,  that  is,  French,  German,  and 
Belgian  standards,  to  Avhich  the  British,  in  recent  years,  have  also 
conformed.  Their  measures  are  all  in  the  metric  system,  and  our 
chief  difficulty  Avas  in  getting  them  to  see  that  our  American  specifi- 
cations Avere  as  good  as  the  standards  that  they  had  adopted.  I 
may  say  that  it  was  Avith  great  difficulty  and  only  Avith  the  assist- 
ance of  the  commercial  attaches  in  Chile  and  Argentina  that  we 
were  able  to  get  the  public  Avorks  officials  to  let  down  the  bars  for 
us  and  for  our  specifications;  and  now  that  the  bars  are  doAvn  this 
is  the  first  opportunity,  in  the  Argentine  Republic  at  least,  for  us 
to  make  good. 


SHIPPING  BOARD,  NAVAL  AUXlLlAKi  ,,  AND  MERCHANT  MARINE.      399 

Mr.  Curry.  Right  there,  if  you  have  no  objection:  It  has  been 
my  opinion  and  my  experience  that  on^  of  the  great  reasons  that 
the  United  States  has  not  more  commerce  with  South  America  is 
that  we  will  not  and  do  not,  and  the  business  men  of  the  United 
States  w411  not  and  do  not  comply  with  the  plans  and  specifications 
that  are  desired  by  the  South  American  people.  It  would  be  just 
as  easy  for  you  to  make  that  pipe  according  to  the  metric  system 
as  it  is  in  feet  and  inches,  but  you  will  not  do  it.  xVnd  why  do  you 
wish  to  force  the  South  American  people  to  take  our  standard  when 
they  want  the  metric  system?  You  go  down  there  and  want  them 
to  dress  as  you  dress,  and  they  don't  want  to  dress  that  way. 

You  go  down  there  and  want  them  to  take  your  system  of  feet 
and  inches  and  yards,  and  they  want  the  metric  system.  It  would 
cost  you  possibly  a  little  more  to  start  manufacturing  according  to 
the  metric  system,  but  Great  Britain,  Germany,  and  France  do  it. 
But  we  have  the  double  system  here,  and  why  do  you  want  to  force 
them  to  take  ^-our  system  when  you  could  sell  by  the  metric  system? 
That  is  the  reason  they  do  not  buy  from  3^ou. 

Mr.  Lake.  I  agree  with  you  perfectly,  sir.  The  metric  system  is 
undoubtedly  superior  to  the  one  we  have  adopted,  and  I  wish  the 
Congress  of  the  United  States  or  some  other  authority  would  make 
the  metric  system  the  legal  system  of  this  country. 

Mr.  Curry.  The  metric  system  is  the  legal  system;  so  is  the  other. 
If  you  want  to  deal  according  to  the  metric  system  with  the  people 
who  use  it,  you  can  do  so. 

Mr.  Lake.  I  will  say  further,  however,  that  we  have  agreed,  as  far 
as  we  are  able,  to  conform  to  the  demands  of  those  South  Americans. 
We  have  agreed  to  make  pipe  in  metric  diameters,  which  we  have 
never  done  before.  We  can  not,  however,  make  the  pipe  in  metric 
lengths  without  really  building  our  foundries  over.  It  would  in- 
volve the  expenditure  of  a  great  amount  of  money,  many  millions 
of  dollars — as  many  millions  of  dollars  as  are  invested  at  the  present 
time  in  these  foundries.  I  hope,  however,  that  the  time  will  come 
when  the  business  that  w^e  can  build  up  in  this  country  will  justify 
those  dianges. 

Mr.  Curry.  You  would  not  have  to  build  the  foundries  over,  would 
you?  In  Great  Britain  they  do  not  build  them  over,  and  why  build 
them  over  here?  To  conform  to  the  metric  system  you  do  not  have 
to  have  any  other  foundries  as  far  as  the  length  is  concerned. 

]\Ir.  Lake.  We  would  have  to  build  entire  new  equipment;  we  have 
to  have  new  flasks  and  new  pits,  and  we  can  not  do  that  without 
practically  rebuilding  our  foundries. 

Mr.  Curry.  It  has  only  been  recently  that  you  have  not  had  all 
the  ships  you  want  to  take  everything  you  could  sell  to  South  Amer- 
ica. The  trouble  with  the  trade  to  South  America  is  that  you  people 
have  not  given  those  ships  enough  commerce  to  make  it  profitable. 

Mr.  Lake.  Very  true. 

Mr.  Curry.  And  the  reason  3'ou  have  not  been  able  to  sell  to  South 
America  is  because  you  won't  manufacture  according  to  the  metric 
system;  and  then  you  come  to  Congress  to  get  Congress  to  do  some- 
thing. You  have  the  South  American  Republics  up  here  talking 
about  the  great  opportunities  between  the  United  States  and  South 
America,  and  vet  the  business  men  will  not,  do  not,  and  have  not. 


400      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

and  under  the  present  conditions,  when  the  trade  is  open,  will  not, 
manufacture  according  to  fhe  way  those  people  want,  and  you  won't 
pack  the  goods  the  way  the  people  want  them  packed.  And  then 
you  wonder  why  it  is  that  they  go  over  to  Great  Britain  and  to 
France  and  Germany  to  buy  those  goods. 

Now,  it  is  not  the  ships  to  South  America;  you  have  had  those. 
You  do  not  have  the  ships  now,  at  this  minute,  because  of  the  war. 
But  the  reason  why  South  America  wants  to  buy  over  there  is  be- 
cause they  can  not  buy  anywhere  else ;  and  the  moment  they  can  buy 
the  goods  tlie  way  they  want  them,  even  if  you  had  a  thousand  ships 
running  between  here  and  South  America,  if  you  do  not  build  the 
goods  right  they  will  not  buy  them,  and  you  know  it. 

Mr.  Lake.  Speaking  for  the  American  Cast  Iron  Pipe  Co.,  I  will 
say  that  we  have  already  spent  a  good  many  thousands  of  dollars, 
and  we  propose  to  go  further,  in  order  to  do  those  things  that  you 
say  we  have  not  done. 

Mr.  Curry.  I  do  not  mean  your  compan}'^  alone;  what  I  mean  is 
the  American  business  men  and  manufacturers. 

Mr.  Lake.  I  think  that  is  true.  We  are  infants  in  the  game;  we 
have  not  been  in  the  business  long,  and  now  that  we  have  the  oppor- 
tunity to  get  in  the  business  we  ai'e  not  able,  on  account  of  lack  of 
tonnage  and  bottoms,  to  do  ttiose  very  things  that  you  say  we  have 
not  up  to  the  present  time  done.  The  business  of  the  Argentine 
Republic  is  very  large  in  this  particular.     In  1914 

Mr.  Hardy.  Will  you  let  me  ask  you  a  question  along  there? 

The  Chairman.  I  suggest  that  j^ou  allow  the  gentleman  to  get 
through  with  his  statement  first. 

Mr.  Lake.  I  would  prefer,  if  it  is  the  same  to  you  gentlemen,  that 
I  should  conclude  first. 

Mr.  Hardy.  It  was  with  reference  to  Mr.  Curry's  question  that  I 
wanted  to  ask,  but  I  will  reserve  it. 

Mr.  Lake.  In  1914  the  Argentine  Republic  bought  200,000  tons  of 
pipe  and  in  1913,  100,000  tons.  The  British  furnished  53,000  tons  in 
1914,  delivering  those  pipe  on  a  freight  rate  of  about  $6.50  per  ton 
from  British  ports  to  the  Argentine  ports. 

The  Chairman.  What  year  was  that? 

Mr.  Lake.  1914.  As  we  anticipate,  our  president  has  cabled  us  to 
find  out  wdiat  can  be  done  in  the  way  of  freights,  so  that  he  can  make 
quotations.  In  order  to  know  what  we  have  to  do  to  meet  compe- 
tition Secretary  Redfield,  at  our  request,  cabled  to  Mr.  Baldwin,  our 
commercial  attache  in  London,  to  ascertain  what  the  freight  rates 
are  on  cast-iron  pipe  from  British  ports  to  Argentina  at  the  present 
time.  Mr.  Bakhvin  cabled,  in  reply,  that  the  basic  rates  prevailing 
are  from  $14  to  $15  a  ton.  Since  this  cable  was  received  our  Mr. 
McWayne  has  cabled  that  the  British  foundries  were  working  with 
British  steamship  lines  and  would  keep  us  out  if  they  could. 

Since  this  situation  has  come  up  we  have  canvassed  the  field  with  a 
fine-tooth  comb.  We  have  been  to  several  of  the  steamship  lines 
that  travel  from  our  country  to  South  American  countries,  and  yet 
none  of  them  are  willing  to  name  us  freight  rates  on  any  future 
movements.  We  have  gone  further;  we  have  taken  this  matter  up 
with  all  of  the  private  companies,  like  the  United  States  Steel 
Products  Co.,  the  du  Pont  Powder  Co.,  Wessel,  Duval  &  Co.,  and 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      401 

others,  and  none  of  them  offer  us  any  encouragement.  They  have 
more  tonnage  of  their  own  to  move  than  they  can  possibly  accommo- 
date. Thus,  being  unable  to  get  accommodations  through  the  regular 
channels,  the  next  question  before  us  was  to  find  out  what  rates  we 
could  get  for  time  charter. 

The  Chairman.  At  that  point,  did  you  investigate  the  Lamport  & 
Holt  Line? 

Mr.  Lake.  Yes,  sir. 

Mr.  Greene.  From  what  ports  do  you  ship? 

Mr.  Lake.  We  ship  from  New  Orleans  or  Mobile  from  our 
foundry.  The  following  cable  was  received  from  Mr.  McWane 
while  we  were  working  Avith  the  regular  steamship  lines : 

Charter  or  buy  steamer.    Control  imperative.    Frame  up  on  pai't  of  opposition. 

I  interpret  that  to  mean  "  frame  up,"  what  we  have  known  all 
along,  that  the  British  foundries  are  working  on  a  cooperative  basis 
with  the  British  steamship  lines  to  prevent  us  from  entering  this 
field.  In  view  of  those  explicit  instructions  from  our  president,  you 
would  naturally  ask,  then,  "  Why  do  you  not  buy  or  charter  vessels ; 
there  are  plenty  of  vessels  on  the  market  to-day?  "  We  have  gone  into 
this  question  thoroughly,  and  also  this  question  of  chartering,  and  to 
reduce  our  conclusions  to  a  concrete  basis  I  w'ill  say  that  the  best 
rate  obtainable  for  charter  is  approximately  $10  per  dead-weight  ton 
per  month,  on  a  12-months'  time-charter  basis,  or  $100  per  dead- 
weight ton  if  we  buy  a  vessel.  In  other  words,  a  5,000-ton  vessel 
would  cost  us,  to  charter,  $50,000  per  month ;  and  if  we  bought  that 
same  vessel  it  would  cost  us  around  $500,000.  On  the  time-charter 
basis  $50,000  per  month  for  three  months,  which  would  be  necessary 
in  order  to  make  a  voyage  for  this  movement,  would  be  $150,000  for 
5,000  tons  of  pipe,  v>'hich  this  vessel  would  carry,  amounting  in  round 
figures  to  $30  per  ton. 

Before  the  war  the  charter  rates  on  this  same  vessel,  as  far  as  we 
can  learn,  were  from  $2  to  $3  per  ton  per  month.  And  bj  this  same 
vessel  before  the  war  it  would  have  been  from  $20  to  $30  per  dead- 
weight ton. 

Now,  as  manufacturers  and  not  as  steamship  operators,  to  go  into 
this  charter  business  at  the  abnormal  prices  and  rates  would  be  a 
gamble  pure  and  simple.  If  the  war  lasted  for  12  months,  maybe 
we  would  come  out  even ;  if  it  ended  tomorrow  the  chances  are  we 
would  be  stuck  for  more  money  than  we  could  make  in  the  pipe 
business  in  a  mighty  long  time.  Now,  we  can  not  blame  the  ship- 
owners for  getting  all  they  can  out  of  their  ships.  Most  of  us  would 
do  the  same  thing,  and  are  sorry  we  can  not  do  it.  It  is  human  nature, 
and  human  nature  turned  loose  runs  riot ;  and  it  is  obvious  that  while 
the  shipowners  may  not  need  some  sort  of  checkrein,  conditions 
which  make  it  possible  to  cripple  business  do  need  some  sort  of  gov- 
ernmental supervision.    I  am  not  suggesting  the  manner  of  it. 

I  will  give  you  some  concrete  examples  of  the  increase  in  rates  on 
cast-iron  pipe  during  the  last  18  months.  The  freight  rate  published 
before  the  war  and  during  the  early  months  of  the  war  to  Habana, 
Cuba,  was  17.5  cents  per  100  pounds,  or  $3.50  per  ton.  In  the  spring 
of  1915  the  rate  was  raised  $1  per  ton.  The  rates  effective  under  the 
latest  notice  sent  out  are  224  cents  plus  5  cents  handling  charge,  or 
$5.50  per  ton.    I  am  speaking  of  the  rates  from  Gulf  ports  to  Habana. 


402      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MAEINE. 

The  Chile  rate  from  Gulf  ports  to  Valparaiso  has  jumped  from  a 
rate  of  $8  or  $9  to  $12.50  and  $15  per  ton— from  $12.50  on  4-inch 
pipe  to  $15  on  larger  sizes. 

To  San  Juan,  Porto  Rico,  for  instance,  the  rates  have  advanced 
from  $3.25  to  $6. 

The  only  foreign  port  to  which  rates  have  not  been  raised,  so  far 
as  I  know,  is  Colon,  Panama. 

The  Chairman.  And  that  is  where  we  have  a  Government-owned 
steamship  line? 

Mr.  Lane.  That  is  where  the  Government  owns  the  steamship  line 
and  is  operating  it.  And  I  have  been  told — I  would  prefer  that  this 
should  not  go  into  the  record — by  one  of  the  important  officials  of 
the  United  Fruit  Co.  that  this  is  the  reason,  and  the  only  reason, 
that  the  rates  have  not  been  raised  to  Colon,  Panama. 

The  Chairman.  That  is  a  very  valuable  fact  to  go  into  the  record. 

Mr.  CuERY.  I  think  it  ought  to  go  into  the  record,  Mr.  Chairman. 

Mr.  Lake.  I  merely  requested  that  it  be  not  put  in  because  I  did 
not  want  to  use  anything  that  might  possibly — while  it  was  not  stated 
confidentially^ — be  considered  of  a  confidential  nature.  However,  I  am 
perfectly  willing  it  should  go  into  the  record. 

I  have  brought  to  your  attention  this  situation,  as  far  as  the  Ar- 
gentine proposition  goes.  I  mentioned  that  first,  because  it  was 
the  largest  and  most  important  from  a  commercial  standpoint.  We 
have  another  proposition  in  Chile.  We  already  have  orders  upon  our 
books  for  furnishing  water  pipe  for  three  cities  in  Chile,  the  first 
American  water  pipe  that  was  ever  booked  for  Chile,  and  those  are 
Arauco,  Tocopilla,  and  Antofagasta.  I  had  the  honor  to  secure  this 
business  myself  last  summer.  AVe  have  nine  months  in  which  to 
make  delivery  of  this  pipe.  There  were  quite  a  number  of  details 
to  be  closed  up,  and  while  w^e  have  done  everything  we  could  to 
arrange  for  the  freight  end  of  it,  and  while  we  have  had  the  matter 
up  for  several  months  with  the  LTnited  Fruit  Co.  and  with  other 
steamship  companies  in  order  to  find  out  what  we  could  definitely 
figure  on  this  movement,  we  have  really  only  been  in  a  position  dur- 
ing the  last  few  weeks  to  say  just  how  soon  we  could  furnish  or  ship 
this  pipe,  and  we  have  not,  therefore,  been  in  a  position  to  close  the 
business.  The  United  Fruit  Co.,  I  will  say,  has  made  every  effort  to 
accommodate  us  and  it  has  nothing,  therefore,  to  do  with  the  fact 
that  we  are  up  against  an  apparently  hopeless  situation  with  respect 
to  this  matter.  A  few  days  ago,  as  a  matter  of  fact,  Mr.  Rodney,  the 
traffic  manager  of  the  United  Fruit  Co.,  told  us  definitely  that  he 
would  book  this  business  for  us  based  on  rates  effective  on  the  19th 
of  March — I  believe  it  was  approximately  the  19th  of  March — and 
would  hold  those  rates  for  us  for  the  next  90  days.  That  is,  $12.50 
per  ton. 

Mr.  Rodney  said,  however,  that  he  could  not  speak  for  the  steam- 
ship lines  operating  on  the  Pacific  on  the  other  side  of  tlie  canal,  and 
I  requested  that  he  cable  the  agent  of  the  Chilean  line  in  Valpairaiso, 
in  order  to  get  the  Chilean  line  to  agree  to  work  with  the  United 
Fruit  Co.  on  this  basis  of  $12.50,  and  to  protect  us  on  that  end  of  it. 
From  my  New  York  office  I  have  just  had  repeated  by  Mr.  Sweeney 
a  cable  which  was  addressed  to  us  by  Mr.  Rodney,  which  says: 

111  the  present  situation  of  affairs  on  tlie  Istlimus  prospects  for  the  near  future 
not  favorable  for  inducing  to  make  engagements  to  the  extent  proposed.  You 
must  not  book  for  Tocopilla.    Time  is  limited  to  Antofagasta. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      403 

That  means  that  the  Chilean  line,  1  take  it,  absolutely  declines  to 
handle  the  Tocopilla  part  of  our  tonnage,  and  declines  to  commit 
itself  to  protect  the  rates  which  the  United  P^'ruit  Co.  have  made  us. 
I  can  not  say  as  yet  what  the  effect  of  it  will  be.  My  private  opinion 
is  that  the  Chilean  line  is  part  of  the  British  steamship  combination 
and  that  the  parent  company  is  the  Pacific  Steam  Navigation  Co.  or 
the  Eoyal  Mail.  I  believe  the  Pacific  Steam  Navigation  Co.  is  wdiat 
they  call  it.  The  Royal  Mail  is  a  well-known  subsidiary  and  the 
Chilean  line  is  controlled,  as  I  understand  it,  by  the  same  British 
interests.    Therefore  I  do  not  hope  for  very  much  from  this  source. 

Upon  my  return  from  Chile — and  our  competition,  by  the  way,  in 
Chile  was  with  the  British— the  first  thing  that  I  learned  on  my 
arrival  in  this  country  after  securing  this  business  in  Chile  was  that 
the  freight  rates  had  been  advanced.  I  will  not  go  so  far  as  to  say 
that  the  fact  that  we  did  secure  this  business  was  behind  that  ad- 
vance, because  in  the  light  of  recent  events  all  rates  have  been 
advanced. 

Another  proposition  that  is  before  us  is  the  city  of  San  Juan,  P.  R., 
has  voted  to  issue  $1,700,000  of  bonds  for  the  purpose  of  extending 
and  improving  their  waterworks  system.  This  involves  the  pur- 
chase of  11,000  tons  of  pipe — between  11,000  and  12,000  tons  of  pipe. 
I  do  not  mean  to  say  that  we  will  not  be  able  to  ship  this  pipe  to 
Porto  Rico,  because. this  is  a  future  matter;  but  I  simply  call  your 
attention  to  the  fact  that  here  is  11,000  tons  of  pipe  to  be  moved  and 
the  capacity  for  bottoms  with  the  present  shortage  seems  to  leave  a 
doubt  as  to  our  being  able  to  move  this  pipe  at  a  reasonable  rate.  It 
would  be  quite  mortifying,  and  I  hope  that  we  shall  not  see  it  come 
to  pass,  to  have  the  British  foundries  furnish  pipe  for  San  Juan, 
P.  R.  Such  a  thing,  however,  is  not  improbable.  They  have  fur- 
nished a  great  deal  of  pipe  in  Mexico.  Costa  Rica,  and  other  coun- 
tries right  at  our  door. 

Another  proposition  is  Salto,  Uruguay,  for  5,000  tons  of  pipe. 
This  pipe  will  be  bought  through  a  contracting  firm  in  Chicago.  We 
have  reasonable  assurance  of  securing  a  part  of  this  business. 

And  I  might  say  right  here,  in  this  connection,  that  only  a  few  of 
the  pipe  foundries  in  this  countvy  are  in  a  position  to  enter  the  ex- 
port field.  While  I  am  speaking  entirely  for  the  American  Cast 
Iron  Pipe  Co.  and  have  no  authority  to  speak  for  these  other  gentle- 
men, I  will  say  that  we  have  discussed  among  ourselves,  those  of  us 
who  are  in  a  position  to  go  after  this  export  business,  the  feasibility 
of  whether  or  not  it  would  not  be  proper  for  us  within  legal  bounds 
to  Avork  together  on  this  South  American  business.  And  we  have 
already  discussed  it.  I  won't  say  that  the  other  foundries  would  be 
with  us  in  our  appeal  to  you  to-day,  but  I  believe  they  would,  and  I 
hope  they  would. 

Mr.  Lazaro.  Is  it  your  opinion  that  if  you  can  get  your  goods  in 
there  during  the  war  that  you  can  hold  this  business  after  the  war? 

Mr.  Lake.  Yes,  sir ;  we  hope  so.  But  we  certainly  feel  that  if  we 
do  not  get  our  goods  in  now  we  will  never  have  an  opportunity  to  do 
so  again. 

Mr.  Curry.  Do  you  not  know  that  if  you  do  get  your  goods  in  now 
and  have  a  monopoly  of  the  South  American  trade,  without  you 
manufactured  according  to  their  system  you  could  not  hold  it? 


404      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr,  Lake.  Not  at  all ;  no,  sir.  We  have  already  gotten  the  Chilean 
Government  to  accept  our  water-works  specifications,  and  instead  of 
excluding  us  they  are  receiving  alternate  bids  for  the  American 
water-works  specifications.  We  have  also  done  the  same  thing  in 
Brazil.  The  fact  that  European  specifications  have  been  so  far  ac- 
cepted is  because  British  capital  is  largely  interested  in  South  Amer- 
ica and  we  are  not.    We  have  simply  been  in  the  field  alone. 

Mr.  Hardy.  Can  not  your  people  convert  your  measurements  into 
the  others  and  offer  them  in  parallel  columns  by  the  English  measure- 
ment and  the  metric  system  ? 

Mr.  Lake.  I  did  not  get  that. 

Mr.  Hardy.  Is  it  not  possible  for  you,  in  making  your  contracts, 
simply  to  convert  the  English  measurements  into  the  metric  measure- 
ments? 

Mr.  Lake.  Yes,  sir;  it  is  very  easy  to  convert  them,  but  it  is  a 
question  of  manufacture.    It  is  not  easy  to  manufacture. 

Mr.  Hardy.  I  mean  for  you  to  manufacture  just  as  you  are  now, 
but  in  making  your  contracts  to  make  them  in  terms  which  are  in 
use  in  that  country — into  metric  terms? 

Mr.  Lake.  It  is  very  simple. 

Mr.  Hardy.  That  is  very  simple? 

Mr.  Lake.  It  is  a  very  simple  matter;  yes.  Along  that  line  we 
have  gotten  up  a  Spanish  edition  of  our  little  pipe  catologue,  con- 
verting those  measurements  for  convenience  along  those  lines. 

Mr.  Hardy.  I  thought  surely  you  must  have  that. 

Mr.  Lake.  Now,  gentlemen,  we  are  pipe  manufacturers,  and  we 
do  not  want  to  go  into  the  ship  business.  But  if  we  have  got  to  do 
it,  if  we  can  snuggle  ujd  under  the  protecting  arm  of  Uncle  Sam 
while  we  are  learning  the  rudiments  of  the  game,  you  can  believe 
me  that  we  want  to  do  it. 

Mr.  Greene.  I  can  not  carry  out  all  the  realty  operations  in  my 
mind  which  I  should  if  the  Government  would  say,  "  Here  is  the 
money ;  you  go  and  speculate  with  it." 

The  Chairman.  I  hope  the  gentleman  from  Massachusetts  heard 
the  statement  that  the  only  route  on  which  freight  rates  have  not 
been  increased  has  been  in  the  trade  where  the  Panama  steamships 
operate. 

JNIr.  Greene.  Oh,  yes;  my  hearing  is  good  so  far. 

Mr.  Byrnes.  Let  me  ask  j^ou  this  question:  What  did  you  mean 
by  the  last  statement  of  yours  that  j^ou  would  like  to  snuggle  up 
under  the  protecting  arm  of  the  Government  ?  That  might  be  mis- 
construed in  some  way.  and  I  wish  you  would  give  us  clearly  what 
you  do  mean  by  that,  whatever  it  is  ? 

Mr.  Lake.  I  mean  that  if  this  ship  bill  passes,  or  if  any  other 
similar  measure  passes,  by  which  the  Government  of  the  United 
States  builds  and  operates  these  ships,  or  will  build  them  and  turn 
them  over  to  us  at  a  reasonable  price,  that  we  would  take  advantage 
of  that  price  and  that  we  would  take  advantage  of  the  facilities 
and  of  the  other  advantages  which  we  believe  we  would  get  by  hav- 
ing the  Government  supervise  or  act  as  a  guardian  over  these  ships. 

Mr.  Edmonds.  You  represent,  I  believe,  a  pipe  company? 

Mr.  Lake.  Yes.  sir. 

Mr.  Edimonds.  Do  all  the  pipe  companies  want  to  snuggle  under 
Uncle  Sam's  shoulders,  too? 


SHIPPING  BOARD^  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE.      405 

Mr.  Lake.  I  could  not  speak  for  the  others. 

Mr.  Hardy.  Mr.  Lake,  a  question  arose  which  I  wished  to  ask  you 
while  you  were  speaking  about  snuggling  up  to  Uncle  Sam.  In  the 
testimony  here  yesterday  as  to  these  vessels  being  built  by  the  Gov- 
ernment and  offered  for  private  charter  or  sold  to  a  private  corpora- 
tion tliere  were  a  good  many  questions  propounded  to  find  out  why 
private  companies  would  charter  these  vessels  in  preference  to  the 
vessels  of  private  owners.  And  let  me  ask  you  if  this  would  not 
probably  be  the  situation:  If  the  Government  built  these  vessels,  it 
Avould  only  be  desired  by  the  Government  to  make  at  the  most  a 
reasonable  profit,  and  if  the  Government  had  these  vessels  to  offer 
for  charter  would  they  not  now  and  apparently  within  the  next  two 
or  three  years  have  bidders  coming  to  them  in  competitive  lots  to 
get  these*  vessels,  and  is  it  not  altogether  probable  that  if  the  Gov- 
ernment had  50  or  GO  vessels  instead  of  having  difficulty  in  leasing 
them  on  favorable  terms  they  would  be  run  after? 

Mr.  Lake.  As  far  as  we  can  say,  as  I  have  stated,  we  are  in  the 
market  to-day  for  a  vessel,  and  we  would  prefer  and  we  would  imme- 
diately enter  into  a  contract  with  the  Government  to  buy  such  a 
vessel  as  they  might  have  for  sale. 

Mr.  Hardy.  I  just  wanted  your  opinion.  Is  it  not  probable  that 
they  would  have  competitive  bidders  for  all  the  vessels  they  could 
furnish  ? 

Mr.  Lake.  Yes;  without  a  doubt,  in  my  opinion. 

Mr.  Hardy.  At  any  reasonable  figures? 

Mr.  Lake.  Without  a  doubt. 

Mr.  Edmonds.  You  mean,  of  course,  only  at  the  present  time? 
You  do  not  mean  that  that  condition  would  exist  after  this  war  is 
over  and  things  returned  to  a  normal  state? 

Mr.  Lake.  I  can  not  speak  for  the  future,  of  course.  I  would 
say,  though,  that  in  my  judgment  there  will  be  an  increased  demand 
on  the  part  of  manufacturers  for  such  vessels  as  can  be  furnished. 

Mr.  Edmonds.  In  ordinary  normal  times,  though.  Of  course,  you 
mean  that  the  manufacturer  is  going  to  get  the  cheapest  charter  in 
which  he  can  carry  his  freight,  is  he  not? 

Mr,  Lake,  Certainly. 

Mr.  RowE.  And  if  j^ou  could  buy  cheaper  in  Scotland,  you  would 
buy  there,  would  you  not? 

Mr.  Lake.  Of  course;  any  business  man  would  buy  to  the  best 
advantage. 

Mr,  EowE.  Certainly.  I  am  not  criticising  you  at  all ;  I  am  just 
saying  what  would  happen. 

Mr.  Lake,  Certainly, 

Mr.  Hardy.  That  is  the  reason  I  wish  the  Government  to  have  the 
same  privilege. 

Mr.  Lake.  Now,  gentlemen,  I  have  given  you  these  ■•facts  as  to  the 
relief  which  you  gentlemen  can  give  us  from  this  situation.  I  talked 
to  Secretary  Eedfield.  to  Dr.  Pratt,  and  others,  and  it  has  been  sug- 
gested to  me  by  no  less  an  official  than  Secretary  Eedfield  that  it 
might  be  possible  to  have  a  joint  resolution  introduced  in  Congress 
and  that  there  seems  to  be  no  other  way  possible  by  which  relief  could 
be  afforded  us.  As  to  this  joint  resolution,  I  will  not  undertake  to 
say  what  it  might  be  or  how  it  might  be  drawn. 

Mr.  Greene.  You  might  let  Mr.  Eedfield  draw  it. 


406      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Lake.  Yes;  I  would  be  glad  to  have  anyone  do  so  who  is  pre- 
pared. It  has  been  suggested  that  the  Government  might  have  some 
Army  transports  not  in  actual  use,  or  in  such  use  that  they  could  be 
converted  to  this  purpose.  This  proposition  is  more  than  the  ordi- 
nary mercantile  proposition.  I  almost  feel  like  going  so  far  as  to 
say  that  the  commercial  integrity  of  our  United  States  is  at  stake 
in  this  matter.  We  have  an  emergency  that  faces  us,  and  I  am  confi- 
dent that  you  gentlemen  can  help  us  in  some  way  to  solve  it. 

The  Chairman.  As  I  understand  you,  the  suggestion  made  by  the 
Secretary  of  Commerce  was  that  if  there  were  any  Army  or  Navy 
transports  or  naval  cruisers  that  might  be  used  for  this  purpose,  they 
might  be  made  available  by  a  joint  resolution  authorizing  the  War 
Department  and  the  Navy  Department  to  turn  them  over  to  the 
Department  of  Commerce  temporarily  to  meet  this  emergency? 

Mr.  Lake.  Yes,  sir. 

The  Chairman.  I  will  say,  in  that  connection,  that  that  subject  is 
being  investigated  at  this  time.  The  suggestion  was  made  the  other 
day,  I  think  by  Mr.  Edmonds  and  also  by  Mr.  Byrnes  and  other 
members  of  the  committee,  and  we  are  investigating  the  question 
right  now,  with  a  view  to  seeing  if  it  is  practicable  to  do  anything 
along  that  line. 

Mr.  Lake.  I  anticipate  that  it  might  be  said  at  once  that  the  Gov- 
ernment has  no  Army  or  Navy  transports  that  could  be  available 
immediately.  But  this  tonnage  of  ours  is  not  to  be  booked  immedi- 
ately, and  if  such  a  resolution  could  be  passed  I  would  much  prefer 
to  take  a  chance,  if  it  comes  down  to  a  gambling  proposition,  on 
the  good  will  of  you  gentlemen  here,  who  have  the  situation  in  hand, 
and  to  take  a  chance  of  getting  the  assistance  of  the  Army  and  Navy 
officers  who  might  have  these  vessels  in  hand,  rather  than  to  gamble 
on  paying  the  tremendous  prices  that  we  would  have  to  pay  for 
ships  now  and  possibly  have  them  on  our  hands  at  sacrifice  values 
in  a  short  time.  I  do  not  know  that  it  is  proper  to  say  what  we 
would  be  willing  to  pay.  I  am,  of  course,  running  a  little  ahead, 
but  I  imagined  that  question  would  be  asked  me. 

The  Chairman.  That  would  be  a  matter  of  negotiation. 

Mr.  Lake.  Then  I  will  not  go  into  that.  That,  gentlemen,  gives 
you  a  pretty  good  idea  of  the  problem  that  we  have  to  solve,  and  that 
we  are  powerless  to  solve.  Here  is  the  matter  in  the  Argentine 
Republic,  which  I  think  offers  us,  as  I  have  stated,  a  unique  oppor- 
tunity, if  we  could  take  advantage  of  it.  We  are  put  to  the  test, 
and  the  question  is:  How  are  we  going  to  measure  up;  can  some 
way  be  devised  to  back  up  our  manufacturers  who  have  gone  down 
into  those  countries  and  are  blazing  the  way,  or  have  we  got  to  back 
down  and  to  admit  that  we  are  not  big  enough  and  ingenious  enough 
to  surmont  our  difficulties? 

Mr.  RowE.  rf  you  got  that  contract  in  Argentina  how  soon  would 
you  want  to  move  the  pipe? 

Mr.  Lake.  The  general  conditions  under  which  proposals  are  re- 
ceived usually  give  from  six  to  nine  months  for  delivery.  We  would 
probably  be  in  a  position  to  commence  the  shipments  in  30  days  and 
make  them  at  the  rate  of  5,000  tons  a  month,  I  should  say,  ap- 
proximatel}^ 

Mr.  Edmonds.  The  only  real  relief  that  you  could  get  now  would 
be  an  arrangement  giving  you  the  use  of  the  naval  auxiliaries  or 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MEECHANT  MARINE.      407 

the  Army  auxiliaries.  That  is  the  only  way  we  could  give  yon  re- 
lief now.  This  bill  will  not  be  passed  in  time  to  help  yon  out  on 
this  contract  at  all. 

Mr.  Lake.  No.  As  I  have  already  stated,  I  do  not  come  here  to 
advocate  this  shipping  bill.  As  a  matter  of  fact,  although  I  am 
ashamed  to  confess  it,  I  had  never  read  this  bill  myself  until  wdthin 
the  last  few  Aveeks,  although  we  are,  as  manufacturers,  vitally  inter- 
ested in  this  question.  And  I  will  go  further  and  say  that  I  have 
shared  personally  the  innate  prejudice  or  antipathy  to  the  idea  of 
Government  ownership  of  steamships;  but  I  have  never  had  occa- 
sion to  have  this  question  brought  before  me  in  just  this  concrete 
way.  We  are  now  here  as  business  men  asking  you  gentlemen  for 
help  and  not  advocating  the  ship-purchase  bill  or  any  other  bill. 
If  it  will  help  us  we  want  it ;  but  we  want  help  of  some  sort. 

Mr.  Greene.  May  I  ask  you  a  few  questions? 

Mr.  Lake.  Certainly. 

Mr.  Greene.  Your  statement  seems  to  bear  something  on  the  line 
of  protection  to  American  industries.  How  would  you  feel  about 
that?  This  is  a  sort  of  protection  of  American  industries  that  you 
are  asking  us  for.  You  are  asking  us  to  furnish  you  w-ith  conven- 
iences that  were  furnished  under  the  policy  of  protection.  How  do 
you  feel  toward  that? 

The  Chairman.  I  beg  your  pardon ;  we  do  not  furnish  any  protec- 
tion to  American  shipping. 

Mr.  Greene.  All  right.  I  am  asking  the  question.  Anybody  can 
criticize  anything  I  do  at  any  time  they  please,  but  I  haA^e  asked  him 
that  question  and  would  like  to  have  him  say. 

Mr.  Lake.  If  you  will  pardon  me,  I  do  not  feel  competent  to 
answer  the  question. 

Mr.  Greene.  All  right.  Now,  you  went  down  in  the  Argentina 
and  Chile  and  around  through  that  section.  You  never  had  been 
there  before,  had  you? 

Mr.  Lake.  Never. 

Mr.  Greene.  Why  did  you  want  to  enter  that  traffic  when  freight 
rates  were  high,  when  conditions  Avere  not  pleasant.  Why  were 
you  so  anxious  to  get  in  the  traffic  as  to  go  down  there  now  and 
study  up  the  trade? 

Mr.  Lake.  At  the  time  I  went  down  there  the  freights  were  not 
high;  and  w^e  were  impelled  by  the  same  spirit  of  ambition  and  de- 
sire for  expansion  of  our  business  as  liaA^e  been  most  Americans,  I 
take  it,  wdio  haA'e  gone  into  these  fields — a  trade  ambition. 

Mr.  Greene.  You  never  had  undertaken  to  exploit  this  business 
previous  to  the  unsettled  conditions  of  freights  and  the  impossibility 
of  getting  freights? 

Mr.  Lake.  The  American  Cast  Iron  Pipe  Co.  is  only  10  years  old, 
sir.  We  have  never  been  in  a  position  until  the  last  two  years  to 
undertake  a  program  so  ambitious. 

Mr.  Greene.  I  know,  but  the  conditions  here  at  the  time  you  went 
out  to  exploit  this  trade  were  very  fair,  and  previously  you  had  not 
gone  out  to  exploit  it  and  tried  to  get  vessels  to  go  there  or  tried  to 
get  accommodations.  Now,  you  say  you  ship  from  New  Orleans  and 
Mobile  when  you  ship? 

Mr.  Lake.  Yes. 


408      SH1PPJN(J  BOARD,  NAVAT.  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Greene.  I  was  going  to  ask  you  this  question,  which  has  been 
brought  out  before:  You  realize  it  aa^ouIcI  be  some  time  before  these 
steamers  authorized  under  the  proposed  bill  would  be  completed 
and  before  you  could  be  furnished  with  these  accommodations 
which  you  want. 

Mr.  Lake.  If  you  will  allow  me  to  say  right  there,  if  we  wait  nntil 
the  passage  of  this  bill,  sir,  it  would  be  too  late  for  our  immediate 
necessities. 

Mr.  Greene.  There  was  another  point  that  you  raised.  You  are 
very  much  stirred  up  about  the  commercial  integrity  of  the  United 
States  now,  but  the  commercial  integrity  of  the  United  States  was 
in  the  same  position  even  before  the  outbreak  of  the  war,  was  it  not? 
We  ought  to  have  had  this  southern  trade,  but  we  did  not  get  it ;  no 
effort  was  made  to  get  it  and  no  attempt  made  to  meet  the  conditions 
that  existed  there  in  the  way  of  shipping  material  or  manufacturing 
material'^  I  want  to  say  that  this  is  not  a  new  subject.  Nearly  40 
years  ago  some  of  the  manufacturers  of  my  own  city  went  down 
into  the  South  American  countries  for  the  purpose  of  building  up 
trade  and  selling  cotton  goods.  Their  attempt  to  go  there  then  was 
because  of  the  dullness  of  trade  at  home,  and  they  were  seeking  an 
outlet  for  their  goods  in  the  South  American  countries.  The  report 
came  back  as  to  the  method  in  which  they  would  have  to  pack  their 
goods  and  to  ship  their  goods  in  order  to  meet  the  trade  demands 
and  to  make  their  goods  acceptable,  and  they  would  have  to  make 
them  in  a  certain  way.  And  under  the  business  conditions  at  home 
the  profits  were  so  large  that  they  said,  "  Well,  it  is  hardly  worth 
while  to  go  into  anything  of  that  kind."  Was  there  not  something 
of  that  condition  with  you,  that  your  profits  were  so  large  in  your 
own  business,  and  the  demand  so  great,  that  you  did  not  think  of  ex- 
ploiting this  trade  before? 

Mr.  Lake.  No.  As  I  have  already  stated,  my  company  has  never 
been  big  enough  or  strong  enough  until  Avithin  the  last  two  years  to 
venture  into  this  trade.  The  opening  of  the  Panama  Canal  afforded  a 
stimulus  to  many  of  our  manufacturers.  The  fact  that  the  com- 
mercial bodies  all  over  the  United  States  have  been  very  much 
interested  in  this  export  question  and  the  opening  of  the  Panama 
Canal  stimulated  our  efforts  to  establish  trade  relations  in  the  Latin- 
American  fields.  Many  of  the  railroads  of  the  country  have  estab- 
lished publicity  bureaus.  The  Southern  Railway,  I  might  mention, 
has  a  man  in  charge  of  a  department  who  has  been  all  over  this  coun- 
try to  try  to  arouse  the  interest  of  manufacturers.  Public  schools  all 
over  the  country  have  employed  Spanish  teachers  for  the  purpose  of 
teaching  Spanish  as  a  part  of  their  curiculum.  The  impetus  which 
was  startecl  about  the  time  and  before  the  opening  of  the  Canal  was, 
of  course,  emphasized  by  the  outbreak  of  the  European  war.  We 
have  all  realized  that  it  gave  us  an  opportunity  that  we  neA'er  had 
before  and  possibly  may  never  haA^e  again,  and  we  haA^e  simpl;^  en- 
deavored, as  prooressive  business  men,  to  put  ourselves  in  a  position 
to  take  advantage  of  this  opportunity. 

Mr.  Greene.  And  proA^ided  you  would  be  more  disposed  to  do  it  if 
the  Government  would  help  you  ? 

The  Chairman.  "Wliitout  caring  where  the  help  comes  from,  just 
so  you  get  the  ships? 

Mr.  Lake.  Yes. 


N       SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      409 

Mr.  Greenf.  Yes;  that  comes  from  the  policy  of  protection  in  an- 
other way.  Any  kind  of  a  plan  that  would  give  you  the  help  you  are 
willing  to  take? 

Mr.  Edmonds.  I  think  the  gentleman  from  Massachusetts  realizes 
we  are  all  glad  they  did  go  down  and  try  to  build  up  this  business 

Mr.  Greene.  Yes ;  I  am  not  finding  any  fault. 

Mr.  Edmonds  (continuing).  And  they  deserve  all  the  help  this 
committee  can  give  them. 

Mr.  Greene.  I  am  not  finding  fault.    I  want  to  get  the  idea. 

Mr.  Lake.  I  will  say  this,  that  this  company,  the  youngest  com- 
pany in  this  country,  is  the  first  company  in  this  line  of  business  to 
send  a  representative  to  that  country ;  and  it  is,  of  course,  costing  us 
quite  a  large  sum  of  money  to  blaze  the  way. 

Mr.  Edmonds.  The  opportunity  was  there,  and  you  took  advan- 
tage of  the  opportunity? 

Mr.  Lake.  The  opportunity  was  offered  and  we  tried  to  take  ad- 
vantage of  it. 

Mr.  Edmonds.  And  you  have  been  unfortunate  enough  to  run  up 
against  bad  conditions? 

Mr.  Lake.  Yes,  sir. 

Mr.  Hardy.  Mr.  Lake,  along  this  line,  if  I  may  be  permitted  to 
ask  some  questions,  is  it  not  a  fact  that  until  recent  years  the  iron 
and  steel  industry  confined  its  efforts  largely  to  our  domestic  trade, 
not  much  seeking  to  compete  abroad  with  England  and  the  other 
European  countries;  but  that  recently,  in  the  last  few'  years,  the 
supply  has  increased  beyond  the  demands  of  this  countr}^  and  they 
have  to  go  out  into  foreign  fields;  that  before  they  went  into  the 
foreign  fields  they  neither  had  nor  needed  means  of  transportation; 
but  that  since  they  have  started  into  foreign  fields  they  have  begun 
to  need  transportation?  And  just  as  you  were  getting  started,  this 
war  came  on  and  our  want  of  an  American  merchant  marine  be- 
came more  apparent  than  ever  before.     Is  not  that  true? 

Mr.  Lake.  I  think  that  is  true. 

Mr.  Hardy.  Now  you  are  in  a  situation  where  you  can  more  than 
supply  the  domestic  trade  and  you  are  able  to  compete  with  the 
foreigner  in  the  foreign  trade,  but  you  have  no  merchant  marine? 
That  is  substantially  the  situation,  is  it  not? 

Mr.  Lake.  We  certainly  have  no  ships  available  right  now. 

Mr.  Hardy.  And  now  our  shipbuilders  are  busy  to  the  extent  of 
their  present  capacity,  with  contracts  ahead  ? 

Mr.  Lake.  Yes;  I  have  appealed  to  the  shipbuilders  and  three  of 
them  have  told  me  they  could  not  entertain  any  proposition. 

Mr.  Hardy.  And  is  it  not  a  fact,  also,  that  capital  is  timid,  not 
liking  to  venture  beyond  its  depth  or  into  the  unknown  future; 
but  if  the  Government  of  the  United  States,  in  one  proposition, 
builds  40  or  50  ships,  that  that  amount  would  likely  stimulate  or 
cause  the  shipbuilders,  with  renewed  confidence,  to  expand  and 
enlarge  their  shipbuilding  capacity — that  one  act  of  the  Government, 
would  it  not,  in  your  opinion,  have  that  effect  ? 

Mr.  Lake.  Yes;  possibly. 

Mr.  Hardy.  So  that  if  this  bill  should  be  passed  and  it  accom- 
plished nothing  else,  it  would  be  likely  to  accomplish  a  substantial 
enlargement  of  our  shipbuilding  facilities,  would  it  not? 


410      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MKKCHANT  MARINE.       / 

Mr.  Lake.  Apparently. 

The  Chairman.  There  is  one  feature  of  your  statement  I  think 
should  be  emphasized,  and  it  is  this,  the  British  manufacturers  of 
pipe  cooperating  with  the  British  steamship  interests  are  able  to  get 
what  might  be  regarded  now,  with  war  conditions  existing,  a  very 
reasonable  rate;  and  while  there  is  an  English  steamship  line,  a 
regular  line,  between  New  York  and  Buenos  Aires  (the  Lamport  & 
Holt  Line),  their  ships  are  under  the  British  flag  and  we  can  not 
obtain  the  same  advantage;  is  not  that  true? 

Mr.  Lake,  Yes. 

The  Chairman.  But  if  you  had  the  same  rate  that  the  British 
manufacturers  can  get  to-day  from  the  British  steamship  com- 
panies or  if  the  British  steamship  lines  trading  from  our  ports  to 
South  America  would  quote  the  same  rates  to  you,  you  could  com- 
pete with  the  British  manufacturers  in  Buenos  Aires  for  this  twenty- 
odd  thousand  tons  of  pipe? 

Mr.  Lake.  Absolutely. 

The  Chairman.  And  hence  under  the  provisions  of  this  bill, 
which  provide  that  foreign  steamship  lines  trading  from  our  ports 
should  treat  our  commerce  with  the  same  care  and  give  us  the  same 
treatment  that  they  do  the  foreign  commerce,  it  might  be  worked 
out  if  we  had  some  law  under  which  these  various  interests  could 
be  brought  under  Governmental  control.    Is  not  that  true? 

Mr.  Lake.  Apparently ;  yes. 

The  Chairman.  And  that  is  the  purpose  of  section  9  of  this  bill, 
I  think,  on  which  we  are  all  practically  agreed,  as  far  as  that  fact  is 
concerned. 

Mr.  Edmonds.  Did  you  look  into  the  reason  why  they  made  lower 
freights  from  England  to  Argentina?  Is  it  not  because  they  are 
bringing  quite  a  large  quantity  of  meats  and  grain  from  Agentina, 
and  they  are  looking  for  return  freights? 

Mr.  Lake.  Yes;  I  think  that  has  a  large  bearing  on  the  fact  that 
they  do  make  cheaper  freight  rates  than  we  do.  They  carr}''  coal,  for 
instance,  from  Britain  down  there  and  take  grain  back.  And  they 
take  other  products,  too. 

Mr.  Edmonds.  There  is  far  more  tonnage  going  from  Argentina 
to-day  than  they  can  get  return  tonnage,  and  that  is  one  reason 
that  they  are  very  glad  to  get  return  tonnage? 

Mr.  Lake.  Yes. 

Mr.  Edmonds.  I  understood  that  was  the  case  and  thought  that 
perhaps  you  had  investigated  to  find  out. 

Mr.  Curry.  And  there  is  another  reason,  and  that  is  because 
every  manufacturer,  exporter,  and  importer  of  Great  Britain  has  a 
direct  investment  in  the  British  merchant  marine  according  to  the 
volume  of  his  business  and  his  trade.  The  manufacturer  and  the 
exporter  and  importer  in  Great  Britain  who  has  not  money  invested 
in  the  merchant  marine  does  not  have  any  consideration  at  all. 
Those  men  who  have  their  money  invested,  of  course,  can  get  prefer- 
ential rates ;  but  if  the  man  has  not  any  money  invested  in  the  mer- 
chant marine  he  can  not  ship  goods  or  import  in  the  ships,  because 
the  ships  are  always  filled. 

The  Chairman.  I  think  there  is  very  much  in  that  suggestion. 


STTTPPING  B(>ARD,  NAVAL  AUXILIARY^  AND  MERCHANT  MABINE.      411 

STATEMENT  OF  MR.  WESTERN  STARR,  OF  MARYLAND. 

Mr.  Starr.  I  am  here  in  the  capacity  of  a  farmer  to  express  the 
views  of  the  farming  community  with  reference  to  this  bill. 

The  Chairman.  Do  you  hold  any  official  relation  to  any  farmers' 
organization  ? 

Mr.  Starr.  Yes,  sir.  While  it  would  be  unfair  to  say  that  I  have 
a  special  license  to  represent  the  grange ;  still,  I  am  a  member  of  the 
grange,  and  know  the  sentiment  of  the  grange,  and  think  I  can 
state  safely  as  to  its  views. 

I  would  say,  further,  that  the  master  of  the  Pennsylvania  State 
Grange  is  here  in  the  room,  and  he  is  also  a  member  of  the  State 
Grange  legislative  committee  of  the  State  of  Pennsylvania,  and  he 
will  be  able  to  tell  you  the  official  feeling  with  regard  to  the  grange. 
This  bill  has  come  up  so  recently  that  it  has  never  had  an  opportunity 
to  be  officially  passed  upon  b}^  the  organized  granges  of  the  country. 
There  are  a  few  local  granges  who  have  considered  it.  The  previous 
bill  of  two  years  ago  was  considered  b}"  the  grange. 

The  Chairman.  Just  at  this  point,  did  3^ou  say  those  other  gen- 
tlemen are  here? 

Mr.  Starr.  Mr.  McSparran,  the  master  of  the  Pennsylvania  State 
Grange,  is  here,  and  he  is  also  a  member  of  the  legislative  committee, 
and  he  will  speak  for  them  if  you  care  to  hear  him. 

It  is  merely  a  question  of  fundamental  principles,  Mr,  Chairman 
and  gentlemen.  There  seems  to  be  a  situation  under  which  there  is 
a  lack  of  commercial  tonnage— a  lack  of  naval  auxiliaries  and  mat- 
ters of  that  kind — which  makes  this  an  opportune  time  to  secure 
advances  and  increases  in  both  of  those  directions.  The  fundamental 
principle  lying  at  the  bottom  of  it,  to  the  ordinary  granger,  the 
ordinary  farmer,  is  an  attempt  to  make  competition  with  the  Ship- 
ping Trust,  if  such  a  thing  exists.  There  seems  to  be  an  impression  in 
the  mind  of  the  average  farmer  that  there  is  a  shipping  trust  and  that 
he  is  the  principal  victim  of  its  operations. 

Now,  the  question  of  how  to  build  up  an  American  merchant  ma- 
rine, to  the  average  farmer,  seems  to  be  a  very  simple  one,  and  that 
is  to  simply  wi])e  off  of  oin'  statute  books  all  of  those  laws  v/hich  have 
imposed  a  penalty  upon  the  American  shipmasters  in  favor  of  Amer- 
ican shipbuilders,  so  there  will  be  no  trouble  about  securing  all  the 
ships  we  wash.  As  the  gentleman  at  the  other  end  of  the  table  sug- 
gested a  little  while  ago,  if  the  American  Government  had  the  right 
to  buj'  ships  in  the  cheapest  markets  it  could  buy  all  of  the  ships  that 
it  wanted,  and  if  the  American  manufacturer  who  desired  ships  to 
help  in  his  business  could  buy  ships  wherever  he  could  buy  them  the 
cheapest,  he  would  have  all  of  the  ships  that  he  needs. 

But  it  would  be  impossible  to  predicate  general  conditions  upon 
the  conditions  as  they  exist  at  this  time.  It  is  an  extremely  abnor- 
mal situation.  A  deluge  of  uncertainties  have  flooded  the  whole 
commercial  world  so  that  there  is  no  one  in  private  pursuits  of  any 
mind  to  venture  beyond  the  shoal  waters. 

It  is  scarcely  possible  that  a  man  would  buy  ahead  enough  to  make 
up  a  cargo  of  shoes  until  he  had  the  shoes  already  sold  and  knows 
what  he  is  going  to  get  from  them.     We  are  living  from  hand  to 


412      SHIPPING  BOARD,  NAVAI.  AUXILIARY,  AND  MERCHANT  MARINE. 

mouth  during  this  period  of  uncertainty,  and  I  want  to  call  your  at- 
tention to  this  fact,  of  how  it  affects  the  farmer.  I  am  speaking  to 
you  of  a  condition  which  existed  seme  very  few^  years  ago  and  I  do 
not  presume  to  say  that  present  conditions  would  bear  it  out,  except 
in  principle.  About  5  per  cent  of  the  total  commerce  of  our  Republic 
is  international;  95  per  cent  of  the  commerce  of  our  Republic  is 
pureh^  domestic.  Fifty  per  cent  of  the  international  commerce  of 
our  Republic  consists  in  the  handling  of  agricultural  products;  that 
is  to  say,  2^  per  cent  of  our  total  commerce  is  international  commerce 
based  on  agricultural  products.  The  grinding  feature  of  the  matter 
is  that  the  24  per  cent  of  our  commerce  which  is  international,  fixes 
the  values  for  the  whole  of  the  balance  of  our  commerce,  and  one  of 
the  large  elements  in  fixing  these  values  is  the  cost  of  transportation. 
The  Dakota  farmer  gets  the  Liverpool  price  for  his  wheat  less  the 
cost  of  transportation,  and  anything  which  adds  to  that  cost  of  trans- 
portation simply  comes  out  of  the  Dakota  farmers'  pocket.  And  if  the 
American  shipmasters  have  got  to  support  a  capital  of  40  per  cent  of 
which  is  dead  capital,  being  the  excess  prices  which  they  have  had  to 
pay  for  ships,  there  is  a  constant  drain  on  the  American  producers 
to  keep  that  capital  afloat.  And  it  is  utterly  impossible  to  expect 
that  American  merchants  and  American  producers  Avill  go  into  the 
field  and  buy  ships  at  40  per  cent  excess  price — dead  capital — to 
compete  with  ships  that  do  not  have  that  dead  capital  to  meet.  In 
other  words,  aside  from  special  privilege,  5  and  6  per  cent  money 
<'an  not  compete  with  3  per  cent  money.     That  is  one  of  the  reasons. 

The  farmers,  as  a  rule,  are  committed  to  the  support  of  this  bill, 
with  two  exceptions.  One  of  those  exceptions  is  with  reference  to 
the  coastwise  trade.  The  other  exception  is  with  reference  to  the 
granting  or  the  possibility  of  granting  preferences  in  railroad  rates 
to  ports  of  export.  There  is  not  a  line  of  road  in  the  country  that 
would  not  be  a  part  of  the  haul  to  export  ports ;  not  one.  That  would 
simply  mean  that  we  are  granting  special  privileges  to  railroads  in 
order  to  sell  to  foreign  consumers  at  lower  prices  than  we  are  selling 
to  our  domestic  consumers  and  our  own  families.  That  is  the  prin- 
cipal growl  that  the  farmer  has  had  in  this  country  for  20  years^ 
that  lie  has  had  to  pay  for  his  rails  $25  to  $28  when  Australia  and 
South  America  could  get  their  rails  from  $18  to  $22,  made  in  pre- 
cisely the  same  mill. 

Mr.  Curry.  Do  you  know  that  to  be  true? 

Mr.  Starr.  I  have  never  heard  it  denied. 

Mr.  Curry.  If  you  know  anything  of  that  kind  I  would  like  to 
have  it  put  in  the  record. 

Mr.  Starr.  Let  me  make  this  statement,  that  I  have  never  heard  it 
denied  by  responsible  authorities  that  lower  prices  were  made  on 
many  of  our  manufactured  products. 

Mr.  Curry.  This  is  not  a  captious  statement.  If  you  know  of  any- 
thing of  that  kind  I  would  like  to  have  you  put  it  in  the  record.  If 
it  is  a  bare  reckless  statement  I  do  not  think  it  ought  to  go  in. 

Mr.  Starr.  It  may  not  be  in  this  record,  but  it  is  in  other  official 
records. 

Mr.  Curry.  I  would  like  to  know  where  they  are.  I  have  never 
seen  it. 

Mr.  Starr.  I  have  not  the  papers  here. 


SHIPPING  BOAED^  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE.      413 

Mr.  CuRRT.  You  may  have  all  the  time  you  want  to  put  it  in  the 
record. 

Mr.  Starr.  I  will  endeavor  to  satisfy  the  gentleman  of  those  facts. 

The  Chairman.  The  gentleman  might  not  be  able  to  vindicate  the 
exact  prices,  but  I  think  there  is  an  abundance  of  authority  as  to  the 
facts. 

Mr.  Starr.  Here  [exhibiting]  is  a  watch  that  was  made  only  40 
miles  from  my  old  home— Chicago.  That  watch  was  bought  in  Liv- 
erpool for  $7.50  at  retail  and  reshipped  to  America  and  sold  at  a 
big  profit ;  and  yet  you  could  not  go  to  the  place  where  it  was  made, 
to  Elgin,  111.,  and  bu}^  a  carload  of  them  for  less  than  $10,50. 

Mr.  Curry.  That  is  governed  by  patents. 

Mr.  Starr.  Patents  have  not  anything  to  do  with  it ;  it  is  governed 
by  the  tariff. 

Mr.  Curry.  It  is  governed  by  patents. 

Mr.  Starr.  In  answer  to  the  question  there,  a  gentleman  from 
Connecticut  two  years  ago,  in  the  Committee  on  Ways  and  Means, 
asked  whether  the  watchmakers  were  making  unusual  profits.  If  the 
committee  had  simply  called  for  the  books  of  the  Elgin  Watch  Co. 
it  would  have  seen  that  the  stocks  representing  the  original  invest- 
ment, which  cost  $100,  were  paying  more  than  $100  dividends  a  year. 

Mr.  Curry.  I  do  not  think  that  has  anything  to  do  with  this  ques- 
tion. The  watches  are  governed  by  patents,  and  it  is  a  different  ques- 
tion entirely. 

Mr.  Starr.  They  are  governed  by  two  things;  they  are  governed 
by  patents  and  they  are  governed  by  a  trust. 

Mr.  Hardy.  I  think  if  you  will  get  Mr.  Rainey's  speech  you  will 
find  the  record  referred  to  about  steel  rails. 

Mr.  Edmonds.  Was  the  Liverpool  watch  made  here  or  in  England? 

Mr.  Starr.  There  is  no  Liverpool  watch  about  it;  it  is  an  Elgin 
watch. 

Mr.  Edmonds.  Was  it  manufactured  in  England? 

Mr.  Starr.  No,  sir;  it  was  made  in  Elgin,  111.,  and  shipped  to 
Enffland  and  then  shipped  back.    It  is  made  in  America. 

Mr.  Loud.  Did  you  buy  the  case  at  the  same  time  as  the  movement? 

Mr.  Starr.  Sure. 

Mr.  Loud.  At  the  same  discount? 

Mr.  Starr.  I  suppose  so;  I  do  not  know  about  that.  I  am  not  a 
watchmaker.  I  only  know  that  I  had  to  tell  them  that  I  could  not 
take  a  locomotive  with  me  in  my  vest  pocket,  but  I  could  bring  a 
little  watch,  which  would  illustrate  the  principle. 

The  farmers  are  thinking  about  these  things,  and  they  are  trying 
to  get  at  the  fundamentals.  They  are  opposed  to  special  privileges. 
If  we  are  going  to  have  preferences,  let  us  all  have  preferences,  and 
that  makes  no  preference,  and  let  us  buy  ships  just  as  we  buy  shoes. 

Mr.  Curry.  You  can  do  that  now.  You  can  buy  a  ship  or  you  can 
manufacture  a  ship  and  build  it  anywhere  on  the  face  of  the  earth. 

Mr.  Starr.  That  is  all  right;  but  how  long  has  that  been  possible? 

Mr.  Curry.  You  are  talking  about  it  now. 

Mr.  Starr.  This  bill  extends  that  principle. 

The  Chairman.  We  can  buy  foreign-built  ships  and  put  them 
under  American  registry,  but  they  are  limited  to  the  foreign  trade. 

Mr.  Starr.  I  understand  that ;  they  are  not  free. 

32910—16 27 


414      SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Curry.  They  are  free  in  the  oYer-seas  trade.  That  is  what 
you  are  talking  about. 

Mr.  Starr.  That  is  not  free.  If  a  man  is  free  to  change  his  boss 
only  he  is  not  free;  if  a  man  is  free  to  walk  south  and  in  no  other 
direction,  he  is  not  free. 

Mr.  Curry.  But  you  are  talking  about  the  export  trade. 

Mr.  Starr.  I  am  talking  about  ships,  and  we  want  free  ships  to 
be  used  in  the  export  trade  and  in  all  trade  where  traffic  monopoly 
exists,  or  to  be  used  in  any  other  trade.  If  I  buy  a  horse  and  want 
to  go  to  town,  I  want  to  be  able  to  use  him  to  go  to  town,  or  if  I 
want  to  put  him  to  a  plow  I  want  to  be  able  to  do  it. 

Mr.  Hardy.  And  you  would  not  buy  a  horse  if  you  could  not  use 
it  in  any  place  you  w'anted  to? 

Mr.  Starr.  I  would  not  buy  a  horse  unless  I  could  use  it  any  place 
I  wanted  to. 

Mr.  1\0WE.  Then,  in  this  bill  you  would  give  the  Government  a 
right  to  go  out  and  buy  a  ship  either  here  or  abroad? 

Mr.  Starr.  Precisely.  I  am  w^illing  to  take  a  chance  on  this  Gov- 
ernment aiding  us  in  a  disastrous  situation. 

Mr.  Edimonds.  You  made  a  statement  a  minute  ago  that  the  price 
of  grain  was  fixed  by  the  Liverpool  board.  Is  it  not  a  fact  that  the 
price  of  grain  is  fixed  by  the  Chicago  board? 

Mr.  Starr.  Pardon  me;  I  do  not  think  you  have  quoted  me  ex- 
actly. I  said  the  price  is  fixed  in  Liverpool;  is  fixed  in  the  market 
of  consumption.  I  did  not  use  the  word  "  board,"  although  I  am 
perfectly  willing  to  accept  it.  The  price  is  fixed  at  the  point  of 
consumption  and  not  at  the  point  of  production.  The  price  of  the 
whent  crop  is  fixed  by  the  export  price  of  the  surplus.  If  a  farmer's 
wife  has  only  half  a  dozen  eggs  to  send  into  town  and  she  wants  to 
set  another  dozen  under  a  hen,  she  knows  what  those  she  sets  under 
the  hen  are  worth  by  Avhat  she  gets  for  the  eggs  she  sends  to  town. 

Mr.  Edmonds.  Does  not  the  grain  farmer  of  the  West  sell  his  grain 
by  the  price  quoted  on  the  Chicago  board  ? 

Mr.  Starr.  The  Chicago  board  is  the  halfway  station  between 
Dakota  and  Liverpool  and  the  Minneapolis  board  is  the  quarter-way 
station. 

Mr.  Edinfonds.  The  difference  between  the  Liverpool  price  and  the 
Chicago  price  is  the  cost  of  transportation? 

Mr.  Starr,  The  difference  between  the  Liverpool  price  and  the 
Chicago  price  is  the  cost  of  transportation;  yes. 

Mr.  Edmonds.  Who  pays  the  freight? 

Mr.  Starr.  The  farmer  pays  the  freight. 

Mr.  Ed:monds.  The  farmer  pays  the  freight? 

Mr.  Starr.  The  farmer  pays  the  freight  and  he  pays  for  every- 
thing.    The  farming  industry  pays  for  all. 

Mr.  ED:\roNDs.  In  other  words,  do  you  mean  to  tell  me  on  the 
grain  that  is  shipped  to  England  that  the  farmer  pays  the  freight? 

Mr.  Starr.  Absolutely.  He  does  not  draw  a  check  for  it,  but  he 
takes  that  much  less  for  what  he  sells. 

Mr.  Greene.  He  gets  the  price  at  the  seaboard  and  the  man  who 
buys  the  grain  on  the  other  side  pays  the  freight. 

The  Chairman.  When  you  say  at  the  seaboard,  does  it  cost  any- 
thing to  get  his  wheat  to  the  seaboard?     It  used  to  cost  twice  as 


SHIPPING  BOARD,  NAVAL  AUXILIABY,  AND  MERCHANT  MARINE.      415 

much  to  get  it  to  the  seaboard  as  it  did  to  transport  it  across  the 
water. 

Mr.  Greene.  Oh,  yes;  but  the  freight  is  paid  by  the  man  on  the 
other  side. 

Mr.  Starr.  I  haAe  noticed  frequently  in  recent  magazines  the 
statement  in  certain  centers  that  the  American  dollar  now  had 
climbed  to  the  top;  that  it  was  now  the  chief  monetary  unit  of  the 
world?  Why?  Because  heretofore  when  we  sent  goods  over  we 
had  to  send  a  check  over  there  or  the  money  to  pay  the  freight  after 
it  got  there.  Now  they  are  coming  over  here  and  buying  at  our  own 
doors.  That  is  the  condition  now;  and  this  condition  is  absolutely 
artificial;  it  is  not  normal.  But  you  can  not  measure  the  level  of 
the  sea  by  measuring  the  waves  at  the  top  in  a  storm ;  you  have  got 
to  take  the  level  to  do  it. 

Mr.  Edmonds.  As  to  the  Liverpool  price,  I  would  like  to  get  a 
little  more  information  on  that.  Is  that  Liverpool  price  in  such 
shaps  that  the  farmer  gets  less  for  grain  he  ships  to  Liverpool  than 
he  does  for  grain  he  ships  to  Chicago,  Philadelphia,  or  New  York? 
Mr.  Starr.  If  I  can  make  myself  clear,  he  gets  exactly  the  same 
price  at  Fargo,  in  Wisconsin,  or  Dakota  that  it  brings  at  Liverpool 
less  the  cost  of  transportation. 

Mr.  Edmonds.  In  other  words,  if  wheat  is  a  dollar  a  bushel  in 

Fargo 

Mr.  Starr.  That  would  be  a  very  unusual  condition. 
Mr.  Edmonds.  I  know ;  but  if  it  is  and  he  sends  his  wheat  to  Liver- 
pool, and  the  freight  is  55  cents,  then  he  only  gets  45  cents  for  it? 
Mr.  Starr.  I  did  not  quite  catch  that. 

Mr.  Edmonds.  If  grain  is  a  dollar  a  bushel  at  Fargo  and  the 
farmer  ships  his  grain  to  Liverpool,  and  the  freight  is  55  cents,  then 
he  only  gets  45  cents  for  that  grain;  whereas  for  the  grain  he  sells 
at  Fargo  he  gets  a  dollar? 

Mr.  Starr.  I  think  3^ou  have  the  process  absolutely  inverted.  If 
wheat  brings  $1  at  Fargo,  on  your  example,  it  will  bring  $1.55  at 
Liverpool. 

Mr.  Edmonds.    That  is  your  suggestion,  as  I  understood  it. 
Mr.  Starr.    No,  sir. 

The  Chairman.  Of  course,  the  matter  under  consideration  now 
is  this  bill,  and  that  is  the  matter  to  which  we  desire  your  atten- 
tion addressed.  If  you  have  given  your  statement  as  to  the  gen- 
eral principles,  and  have  nothing  further  to  submit,  there  is  another 
gentleman  here  who  wishes  to  be  heard. 

Mr.  Starr.  I  am  reminded  that  the  gentleman  asked  the  ques- 
tion. Why  it  was  that  the  farmer  wanted  Government-owned  ships? 
For  preciselv  the  same  reason  that  the  farmer  wants  a  gun  behind 
his  door  loaded  with  a  cartridge  with  a  ball  on  the  end  of  it.  Poten- 
tial competition  is  the  equal  of  actual  competition.  If  they  know 
the  Government  of  the  United  States  has  the  ships  and  that  it  will 
use  them,  it  will  put  an  end  to  monopoly  and  extortion  in  ocean 
traffic. 

Mr.  Hardy.  Did  you  hear  the  testimony  a  little  while  ago  of  the 
gentleman  who  said  the  Panama  freights  were  the  only  ones  that 
had  not  been  increased? 


416      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Starr.  Yes ;  and  I  think  that  is  the  best  point  that  has  been 
brought  out  in  this  hearing.  I  stand  absokitely  committed  to  that 
principle  of  Government  ownership. 

ISIr.  Greene.  Why  not  have  the  Government  take  hold  of  the 
farm  products  and  dispose  of  them? 

Mr.  Starr.  My  dear  sir,  let  me  make  this  suggestion:  There  are 
two  types  of  mind  and  two  phases  of  philosophy  on  that  question 
and  there  is  just  one  little  line  that  distinguishes  the  two.  One 
set  claims  that  every  enterprise  and  every  business  in  which  there 
is  a  profit  to  be  made,  the  Government  can  not  touch;  but  if  there 
are  services  to  be  performed  at  an  actual  loss^  expenditures  without 
return,  why  naturally  that  is  the  business  the  Government  has  to 
do.  Let  me  give  you  one  illustration:  The  city  of  New  York  has 
«pent  hundreds  of  millions  of  dollars  cleaning  its  streets  during 
the  last  two  generations.  Today  private  contractors  are  paying 
the  city  of  New  York  enormous  sums  of  money  for  the  privilege  of 
cleaning  the  streets  and  keeping  the  sweepings.  Now  that  is  the 
line  of  distinction.  If  it  is  a  question  of  profit  to  be  made,  why,  then, 
the  Government  has  got  to  keep  its  hands  off.  The  GoA'ernment  is 
the  biggest  business  corporation  in  the  world;  but  you  are  only 
permitted  to  do  the  sewage  work,  the  scavenger  work  and  the  expen- 
sive work,  and  you  see  that  it  would  not  make  a  profit.  We  don't 
want  it  to  make  profits;  but  we  do  want  it  to  stand  ready  to  strike 
a  blow  at  monopoly.  The  real  trouble  with  the  whole  situation  is 
that  we  made  a  blunder  in  the  beginning,  and  we  have  been  making 
other  blunders  ever  since  trying  to  wipe  out  the  original  blunder 
and  waiting  for  it  to  adjust  itself. 

Mr.  McSparran,  of  Pennsylvania,  is  here.  He  is  master  of  the 
State  Grange  of  Pennsylvania  and  chairman  of  the  legislative  com- 
mittee. If  the  committee  wishes,  I  think  he  would  be  glad  to  be 
heard. 

STATEMENT  OF  MR.  JOHN  A.  McSPARRAN",  SECRETARY  OF  THE 
LEGISLATIVE  COMMITTEE  OF  THE  NATIONAL  GRANGE  AND 
MASTER  OF  THE  STATE  GRANGE  OF  PENNSYLVANIA. 

Mr.  McSparran.  I  want  to  say  that  I  was  not  informed  when  I 
came  to  Washington  that  this  hearing  was  on  in  this  shape,  and  there- 
fore I  am  not  prepared  to  offer  the  testimony  in  the  completeness 
that  I  w^ould  have  liked  to  offer  it  at  this  time. 

The  resolution  of  the  National  Grange  upon  this  question  I  do 
not  have  with  me,  but  I  would  like  to  haA^e  the  privilege  of  putting 
that  resolution  into  the  record,  if  I  may  be  allowed  that  privilege. 

Mebchant  Mabine. 
resolution  adopted  by  the  national  grange  annual  meeting,  wilmington, 

DEL. 

Resolved,  That  if  Government  funds  are  to  be  used  to  aid  in  building  up  an 
American  merchant  marine  that  it  should  be  for  ships  to  be  owned  and  operated 
by  the  Government. 


SHIPPING  BOAKD_,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      417 

KESOLUTIONS  PASSED  BY  PENNSYLVANIA  STATE  GRANGE  AT  ANNUAI.  MEETING,   STATE 
COLLEGE,  DECEMBEB  22,   1915. 

Whereas  our  ports  are  so  crowded  with  exports  that  millions  of  d(jllars'  worth 
of  farmers'  products  are  held  in  storage  for  the  want  of  proper  shipping  facili- 
ties, that  it  is  not  a  question  any  more  of  high  freight  rates  hut  what  will 
you  pay  the  shipowner  to  transport  your  products,  and  since  the  prices  of 
some  of  our  agricultural  products  are  fixed  in  the  markets  of  the  world,  it 
follows  that  exorbitant  freight  rates  not  only  reduce  the  price  to  the  farmer 
of  his  products  which  he  sends  abroad  but  those  which  are  consumed  in  this 
country ;  or,  in  other  words,  to  illustrate  this  point,  an  increase  in  ocean 
freight  rates  of  10  cents  a  bushel  on  wheat  not  only  means  that  much  less 
for  the  wheat  shipped  abroad  but  on  all  the  wheat  in  the  country :  Therefore 
be  it 
Resolved,  That  in  order  to  stabilize  such  rates  we  favor  the  building  up  of  a 

Government  owned  and  operated  merchant  marine,  with  free  ports  of  entry  to 

all  ships  of  such  merchant  marine. 

Resolved,  That  we  I'eiterate  our  opposition  against  ship  subsidies. 
Adopted. 

Had  I  known  a  few  hours  sooner  that  you  were  having  this  hear- 
ing at  this  time  and  in  this  shape  I  would  have  been  here  with  the 
resolutions;  but  I  was  just  in  town  and  stumbled  upon  it  and  came 
around  to  the  hearing. 

I  simply  want  to  emphasize  what  Mr.  Starr,  of  Maryland,  has 
testified  to  here  as  a  general  proposition.  The  farmers  have  been 
complaining  for  a  great  many  years,  and  I  think  justly,  that  we  are 
abused  by  the  fact  that  there  is  not  a  liberty  of  operation  in  regard 
to  the  shipping  facilities  that  we  have  a  right  to  expect.  And  the 
prices  of  those  shipping  facilities  are  increased  by  regulations  all 
the  way  down  the  line.  The  original  cost  is  enlarged  by  the  fact  that 
they  can  not  buy  the  ships  wherever  they  please,  and  it  is  enlarged 
by  the  fact  that  our  registry  regulations  are  not  as  liberal  as  they 
ought  to  be.  And,  in  addition  to  this,  the  big  shipping  combine  has 
practically  driven  the  tramp  steamer  out  of  business  by  having  so- 
called  fighting  ships  that  follow  the  tramp  into  port  and  underbid 
it  for  its  cargo.  All  these  things,  in  connection  with  the  juggling 
of  rates  from  day  to  day,  make  a  situation  that  is  very  unjust  to 
food  producers. 

We  feel  and  we  have  so  acted,  and  our  resolution  will  indicate  it, 
that  Government  ownership  of  some  merchant  ships  will  act  on  the 
principle  of  a  regulation;  that  it  will  have  a  tendency  to  Avork  out 
everywhei-e,  as  has  been  admitted  here  this  morning  it  has  worked 
out  in  Colon,  in  conjunction  with  shipping  to  other  southern  points. 
And  for  that  reason  we  believe  that  the  Government  of  the  United 
States  can  very  well  enter  this  field  to  a  sufficient  extent  to  provide 
that  regulation,  especially  when  a  large  number  of  such  vessels  are 
needed  as  an  auxiliary  to  the  Navy.  Some  do  not  seem  to  under- 
stand that  we  have  to  pay  those  freights.  There  is  not  any  doubt 
about  that.  Every  cent  that  you  add  to  the  cost  of  transportation, 
either  in  added  cost  of  a  ship  or  in  regulations  that  infringe  upon  its 
liberty  of  action  on  the  seas  or  in  monopoly  of  the  shipping  busi- 
ness, creates  a  bill  that  the  farmers  have  to  pay. 

Mr.  Byrnes.  You  do  not  believe,  then,  that  the  consumer  pays  the 
freight? 

Mr.  McSparran.  No  ;  not  in  this  case,  for  this  reason :  The  prices 
of  the  food  products  of  the  world  are  fixed  by  what  we  call  the  world 


418      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

prices;  that  is,  the  average  consumer's  price,  of  course.  Now,  the 
farmers  of  the  United  States  have  throughout  all  the  years  created 
or  raised  a  surplus  that  was  a  perishable  commodity,  and  there- 
fore we  have  always  been  compelled  to  put  that  surplus  on  the  mar- 
kets of  the  world  at  the  world's  prices.  And  it  can  be  taken  for 
granted  that  the  millers  in  this  country  are  not  fools,  so  they  natu- 
rally offer  us  exactly  the  same  price  as  we  can  get  for  our  surplus  on 
the  markets  of  the  world,  less  the  cost  of  transportation  and  insurance. 

Mr.  Byrnes.  You  believe  that  the  charges  of  all  the  middlemen, 
then,  are  borne  by  the  producers,  too? 

Mr.  McSparran.  No;  it  depends.  As  a  general  principle  the  con- 
sumer pays  the  charges.  But  I  think  you  must  realize  (and  that  is 
the  point  I  want  you  to  get)  that  when  you  place  on  the  market  a 
perishable  product,  as  is  the  case  with  practically  all  the  farmer's 
products,  that  therefore  any  surplus  which  is  created  must  go  im- 
mediately on  the  market.  We  can  not  hold  this  year's  wheat  back 
indefinitely  and  sell  it  here  in  this  country  at  a  future  time.  And 
this  surplus  year  after  year  we  are  compelled  to  put  on  the  markets 
of  the  world,  and  the  moment  you  get  outside  of  the  tariff  wall  it 
goes  on  the  market  on  the  basis  of  the  world's  prices. 

]\Ir.  Hardy.  You  never  have  been  able  to  go  in  a  trust  and  demand 
fixed  prices? 

]\Ir.  McSparran.  No;  and  we  hope  we  never  will. 

Mr.  Byrnes.  You  limit  that,  though,  to  perishable  products,  you 
say? 

Mr.  McSparran.  Yes;  though  the  same  principle  holds  with  any 
commodity  that  must  be  sold  at  once. 

Mr.  Byrnes.  For  instance,  with  cotton,  which  comes  from  Texas, 
the  State  of  my  good  friend.  Judge  Hardy,  you  do  not  think  it  applies 
to  that  ? 

Mr.  McSparran.  I  have  not  worked  it  out  in  regard  to  that.  I 
won't  answer  simply  because  I  do  not  know. 

Mr.  Hardy.  I  might  suggest  to  you  that,  even  if  it  is  not  perish- 
able, if  you  are  forced  to  sell  it  the  same  conditions  apply  ? 

Mr.  McSparran.  If  you  were  forced  to  sell  it,  the  same  conditions 
would  hold  true. 

The  Chair]\[an.  Have  you  read  this  bill,  and  has  your  grange,  or 
the  organization  which  you  represent,  considered  this  legislation? 

Mr.  McSparran.  No;  we  have  not  had  any  meeting  since  this  bill 
was  whipped  into  its  present  shape.  The  general  principle  has  been 
indorsed  for  years. 

The  Chairman.  The  bill  which  was  pending  in  the  last  Congress, 
did  you  consider  that  bill? 

]\Ir.  McSparran.  No;  not  as  a  bill. 

Mr.  Greene.  Do  you  know  anything  about  the  lake  commerce? 

Mr.  McSparran.  No. 

Mr.  Greene.  For  instance,  all  of  those  vessels  are  built  in  Ameri- 
can shipyards  by  American  labor.  Do  you  know  anything  about  the 
freight  on  wheat,  for  instance,  from  Diiluth  to  Buffalo? 

Mr.  McSparran.  From  Duluth  to  where? 

Mr.  Greene.  From  Duluth  to  Buffalo,  N.  Y.,  on  the  Lakes. 

ISIr.  McSparran.  No  ;  I  do  not. 

Mr.  Greene.  I  am  informed  by  credible  authority  that  the  rate  of 
freight  on  those  American-built  steamers,  the  finest  to  be  found  any- 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      419 

where,  while  there  is  practically  no  foreign  competition  there,  is 
about  half  a  cent  to  a  cent  a  bushel  from  Duluth,  Minn.,  to  Buffalo, 
N.  y.    You  would  not  want  it  much  cheaper  than  that? 

Mr.  McSparkan.  What  is  your  point? 

Mr.  Greene.  From  Duluth  to  Buffalo? 

Mr.  McSpaaran.  I  say,  what  is  your  point?    I  do  not  see  it. 

Mr.  Greene,  The  point  you  want  to  make.  You  are  talking  about 
the  shipping  opportunities  and  about  the  lack  of  opportunity  to 
ship  the  grain  that  you  raise,  or  whatever  you  raise — the  lack  of 
opportunity  to  ship  it.  Is  not  that  a  pretty  good  opportunity  to 
ship  ?    That  is  the  point  I  want  to  make. 

Mr.  Burke.  But  that  lake  traffic  does  not  reach  Liverpool. 

Mr.  Greene.  Oh,  no;  and  you  can  not,  with  this  shipping  bill, 
reach  Liverpool  Avithout  having  something  to  pay  for  it. 

The  Chairman.  Fifty  or  sixty  years  ago  it  cost  from  25  to  30  cents 
a  bushel  to  ship  a  bushel  of  wheat  from  Duluth  to  Liverpool.  I  do 
not  know  whether  you  accept  the  theory  that  the  farmer  should  be 
indifferent  to  the  cost  of  transportation. 

Mr.  Greene.  Oh,  no.    I  think  he  should  not  be  indifferent. 

The  Chairman.  That  is  the  only  principle  that  the  gentleman  is 
contending  for.  When  it  cost  30  cents  a  bushel,  of  course,  to  ship  a 
bushel  of  wheat  from  Duluth  to  Liverpool,  I  suppose  it  affected  ma- 
terially the  price  of  Minnesota  wheat.  But  now,  as  you  say,  the  price 
on  the  Great  Lakes  has  been  reduced  to  a  very  low  rate. 

Mr.  Greene.  And  without  Government  interference  or  Govern- 
ment construction. 

The  Chairman.  Before  the  war  in  Europe,  I  think  the  rates  from 
Boston,  on  our  Atlantic  seaboard,'  to  European  points  was  about  2^ 
pence  or  5  cents  a  bushel,  and  now  it  is  65  and  70  cents  a  bushel. 

Mr.  Greeke.  Yes:  and  the  parties  who  buy  the  grain  across  the 
water  have  to  pay  the  freight.  They  get  their  price  cash  in  hand 
here  before  the  stuff  is  delivered  on  board  the  steamer. 

The  Chairman.  But  the  man  in  Europe,  who  has  to  buy  that  wheat 
knows  that  he  must  pay  that  60  or  65  cents  a  bushel,  and  I  expect 
he  will  have  that  in  mind  in  determining  what  he  will  pay  for  it  on 
the  Atlantic  seaboard. 

Mr.  Greene.  Yes;  ])ut  he  has  to  pay  it  or  else  starve. 

Mr.  Byrnes.  But  when  a  man  has  to  pay  more  for  a  commodity  he 
will  buy  less.  If  you  have  to  pay  more  to  buy  a  suit  of  clothes,  in- 
stead of  buying  two  suits  you  will  buy  one. 

Mr.  Greene.  According  to  your  theory.  But  the  })rice  of  suits  has 
been  going  down  all  the  time,  and  I  can  buy  clothes  cheaper  now  than 
I  ever  could  before;  and  I  can  buy  shoes  cheaper,  and  I  can  buy 
BA^erything  that  is  made  to-day  cheaper  than  I  could  when  I  was  a 
boy. 

iVIr.  Edmonds.  I  would  like  to  correct  Mr.  Greene.  He  says  that  he 
can  buy  everything  cheaper  than  he  could  when  he  was  a  boy.  That 
is  not  so,  because  for  the  farmers'  products  we  are  paying  a  great 
deal  more  than  we  ever  had  to  pay  before. 

Mr.  McSparran.  The  gentleman  from  Massachusetts  speaks  of  the 
foreign  shipper  paying  the  freight  from  New  York.  Why,  of 
course,  he  does.    That  is  an  incident  in  his  shipping. 

Mr.  Greene.  No  ;  he  does  not  pay  the  freight.  The  man  who  buys 
the  grain  on  the  other  side  pays  the  freight. 


420      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MEECHANT  MAEINE. 

Mr.  McSparran.  Is  not  that  the  shipper?  That  is  the  foreign 
man,  it  is  not, 

Mr.  Greene.  The  foreign  shipper;  yes. 

Mr.  McSparrax.  Why,  of  course  he  does,  and  that  is  an  incident  of 
commerce.  But  that  is  not  the  principle  we  are  talking  about.  The 
moment  he  pays  that,  he  adds  it  as  a  charge  on  the  goods  and  he  has 
to  meet  the  world's  price  when  he  takes  the  goods  home,  and  every 
one  of  those  things  is  reflected  in  the  price  that  is  quoted  the  next 
day  in  Chicago,  and  that  is  the  way  the  farmer  pa^^s  it.  Of  course, 
he  takes  into  account  what  he  pays  when  you  ship  the  goods  across 
the  ocean  and  that  reflects  itself  the  next  day  in  the  price  of  wheat 
in  Chicago. 

Mr.  Greene.  Do  you  sell  your  farm  products  that  go  abroad  at  less 
than  3^ou  sell  them  at  home? 

Mr.  McSparran.  Of  course  not.    But  that  is  not  the  point  at  all. 

Mr.  Greene.  Certainly  it  is. 

Mr.  ISIcSparran.  Certainly  it  is  not. 

Mr.  Hardy.  Let  me  suggest  that  neither  one  of  you  gentleman  can 
convince  the  other. 

Mr.  Greene.  No;  I  understand  that. 

Mr.  Edmonds.  The  gentleman  here  from  Pennsylvania,  represent- 
ing the  grange,  is  making  the  best  argument  for  protection  I  have 
heard  for  some  time,  and  I  am  very  glad  to  hear  it. 

Mr.  Hardy.  I  understand  you  now  to  say  that  the  consumer  pays 
the  cost,  but  when  you  argue  for  protection  you  say  the  producer  pays 
the  cost? 

Mr.  Greene.  That  argument  was  the  objection  of  the  farmer  to 
building  up  a  merchant  marine.  The  farmer  objected  to  having  a 
merchant  marine  built  up  because  it  would  raise  the  price  of  freight 
on  the  products  of  the  American  farmer,  and  we  have  always  had 
opposition  from  the  farmer  to  building  up  a  merchant  marine. 

^Ir.  Hardy.  The  point,  I  suggest,  is  you  are  now  contending  the 
consumer  on  the  other  side  pays  all  the  freight.  When  you  argue 
for  protection,  you  say  the  consumer  does  not  pay  any  of  the  freight. 
The  truth  between  the  two  is  that  sometimes  the  consumer  and  some- 
times the  producer  pavs  it :  but  generallv  both  of  them  pav  some 
of  it. 

Mr.  Greene.  And  when  you  get  free  trade,  ships,  and  everything 
else,  who  pays  it  ? 

Mr.  Hardy.  When  you  cut  down  the  cost,  nobody  pays  it. 

Mr.  McSparran.  You  are  talking  about  the  consumer.  The 
world's  price,  the  proposition  I  am  talking  about,  is  a  different 
pro]jOsition  than  the  consumer  back  of  the  tariff  wall.  That  is  the 
vital  point. 

The  Chairman.  This  gentleman  is  not  from  the  West,  Mr.  Greene, 
he  is  from  Pennsylvania. 

Mr.  Greene.  I  understand,  and  I  bet  he  votes  for  protection,  too. 

Mr.  McSparran.  I  bet  I  don't. 

Mr.  Greene.  All  right,  you  are  one  of  the  few,  then,  who  do  not 
in  Pennsylvania. 

Mr.  McSparran.  You  are  at  liberty  to  inquire  into  that,  if  you 
wish  to. 

Mr.  Edmonds.  No;  because  the  law  of  Pennsylvania  preserA^es  the 
secrecy  of  the  ballot. 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      421 

Mr.  Curry.  I  do  not  think  that  anyone  will  controvert  the  fact 
that  the  farmer  is  getting  more  for  his  products  now  than  he  ever  got 
before.  But  that  is  not  the  question;  the  proposition  is  how  they 
are  going  to  get  these  products  across  the  Atlantic  to  the  European 
markets,  and  the  cost  of  transportation.  The  low  freight  rates  on  the 
Lakes  prove  that  the  high  freight  rates  on  the  Atlantic  are  not  on 
account  of  a  shipping  trust;  but  that  the  excessive  rate  that  we 
have  to  pay  at  the  present  time  on  all  products  shipped  abroad  is  on 
account  of  the  war  risk.  Of  course  any  man  who  is  in  business 
crossing  the  Atlantic  with  merchant  ships  will  have  to  have  a  larger 
amount  of  money  paid  to  him  for  taking  that  stuff  across  to-day  than 
he  would  before  the  war.  It  is  a  question  of  the  Government  now 
helping  to  meet  this  situation.    That  is  the  way  you  look  at  it? 

Mr.  McSparrax.  Yes. 

Mr.  Curry.  Until  recently  the  farmers  absolutely  did  not  care  any- 
thing about  the  merchant  marine.  Anything  that  was  tried  to  be  done 
for  the  merchant  marine  they  stopped.  All  they  cared  about  was  to 
ship  their  goods  as  cheap  as  possible  in  any  ship;  the  cheaper  the 
ship  the  better  pleased  they  were.  But  a  condition  comes  now  where 
you  can  not  get  the  ships.  If  this  bill  was  enacted  it  would  not 
relieve  the  situation  or  condition  at  all  now.  The  only  way  I  can 
see  for  the  Government,  if  it  is  to  help  at  all,  is  to  put  the  transports 
and  the  colliers  that  are  not  in  use  into  this  overseas  trade.  It  is 
possible  that  a  joint  resolution  might  be  passed  through  Congress 
to  give  temporary  relief,  not  putting  those  ships  into  the  overseas 
trade  entirely,  but  to  relieve  the  temporary  condition.  If  this  situa- 
tion did  not  confront  the  American  people,  if  there  was  peace 
throughout  the  world  at  the  present  time,  would  the  farmers — I  am 
not  talking  about  you,  but  those  you  represent — take  an  interest  in  a 
merchant  marine,  and  would  they  be  willing  for  the  United  States 
Government  to  go  into  this  business  at  a  loss  and  to  appropriate 
$50,000,000  in  the  first  instance  and  to  increase  that  as  time  advanced 
and  more  money  was  needed? 

Mr.  McSparrax.  I  think  the  start  of  this  was  before  the  war.  I 
think  you  are  mistaken  entirely  in  saying  the  farmers  have  never 
taken  any  interest  in  this. 

Mr.  Curry.  All  the  farmers  wanted,  particularly  from  the  Middle 
West,  was  to  ship  their  goods  just  as  cheap  as  they  could  possibly 
ship  them  on  any  ship — whether  Japanese,  German,  British,  Ameri- 
can, or  anything  else.  They  were  not  even  in  favor  of  the  United 
States  Government  giving  preferential  rates  on  mail  matter. 

Mr.  McSparrax.  Why  should  they? 

Mr.  Curry.  That  is  all  I  want;  I  am  through.  I  hope  you  do  not 
represent  the  opinion  of  the  American  farmer  on  this  subject. 

Mr.  Burke.  Mr.  Chairman,  I  do  not  understand  whether  the  gen- 
tleman was  granted  his  request  to  include  in  his  remarks  a  copy 
of  the  resolutions  passed  by  the  National  Grange.  I  would  like  to 
ask  that  he  be  granted  that  permission. 

Mr.  Greexe.  There  is  no  objection  on  this  side  of  the  table. 

The  Chairmax.  I  understand  there  is  no  objection. 

Mr.  Edmoxds.  Did  the  farmers,  in  their  grange  action,  describe 
any  particular  way  that  they  wanted  this  merchant  marine  to  be 
built  up  ? 


422      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  McSparran.  Yes;  they  suggested  Government  ownership  or 
Government  building  of  ships  would  furnish  that  regulative  idea. 

Mr.  Edmonds.  How  do  they  feel  on  the  subsidy  question? 

Mr.  ]\IcSparran.  They  are  opposed  to  it,  and  always  have  been. 

Mr.  Edmonds.  They  are  opposed  to  the  subsidy  question? 

Mr.  McSparran.  They  have  been  for  15  years.  I  do  not  know 
when  the  first  action  was  taken,  but  it  was  a  good  many  years  ago. 

Mr.  Ed^ionds.  In  your  personal  opinion,  what  is  the  difference 
between  a  Government-owned  line,  run  at  a  considerable  loss  that  the 
taxpayers  have  to  pay,  and  a  subsidy  ? 

Mr.  McSparran.  Do  you  know  of  any  such  line? 

Mr.  Edmonds.  That  is  what  will  be  done  when  we  run  this  line. 

Mr.  McSparran.  You  are  supposing;  but  I  do  not  understand  how 
you  can- prove  that  to  be  the  fact  until  you  try  it. 

Mr.  Curry.  Suppose  you  admit  it  as  a  fact,  for  the  sake  of  argu- 
ment, how  would  you  stand  on  that  proposition  if  it  should  be  run  at 
a  loss? 

Mr.  McSparran.  If  it  was  a  regulating  proposition  and  would  do 
the  work  I  do  not  see  why  that  would  enter  into  it.  We  pay  big 
money  for  other  regulating  commissions.  It  costs  the  Government  a 
big  bunch  of  money  every  year  to  do  that  character  of  work.  Now, 
if  you  can  do  something  of  that  kind  that  will  provide  that  important 
essential,  I  can  not  see  why  there  should  be  any  necessity  of  making 
it  pay. 

Mr.  Edmonds.  Suppose  the  Government  would  start  Government- 
owned  steamship  lines  and  they  would  run  at  a  loss  in  ordinary  times, 
we  will  say,  because  it  seems  that  American  shippers  can  not  run 
steamship  lines  at  a  profit  in  competition  with  the  foreign  lines  (I 
am  speaking  about  ordinary  times),  they  would  have  to  stand  the 
loss  continuously;  but  if  they  were  to  subsidize  the  lines  they  could 
either  make  the  subsidy  larger  or  smaller,  could  they  not,  as  the  time 
went  along  and  the  lines  became  more  profitable  ? 

Mr.  McSparran.  Oh,  yes;  they  could  make  it  larger  or  smaller,  of 
course. 

Mr.  EdjMonds.  Would  not  that  be  a  better  w^ay  of  regulating  it? 

Mr.  McSparran.  No. 

Mr.  Hardy.  Mr.  Chairman,  if  we  are  going  to  argue  the  question 
of  subsidy  we  will  never  get  through,  because  I  do  not  care  for  these 
questions  and  statements  to  go  in  unless  the  other  side  of  the  question 
goes  in,  too. 

STATEMENT  OF  MR.  JAMES  I.  EWELL,  OF  NEW  YORK,  SECRE- 
TARY OF  THE  NATIONAL  MERCHANT  MARINE  ASSOCIATION. 

Mr,  EwELL.  Mr.  Chairman  and  members  of  the  committee,  I  deem 
it  both  an  honor  and  a  privilege  to  appear  before  you  to  discuss  this 
great  international  issue.  I  had  the  pleasure  of  appearing  before 
the  Merchant  Marine  Committee  in  1911,  when  Mr.  Greene,  of  Mas- 
sachusetts, was  chairman. 

Mr.  Greene.  I  recognize  you. 

Mr.  EwELL.  I  am  not  going  into  any  academic  discussion  of  this 
question  before  this  honorable  body,  who  understand  the  subject  so 
well;  but  there  are  some  phases  of  the  present  situation  to  which  I 
desire  to  invite  your  kind  consideration. 


SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MERCHANT  MAEINE.      423 

We  have  been  accused  of  not  being  a  maritime  Nation.  I  will  go 
back  a  little,  if  you  will  allow  me.  We  liaA'e  not  been  a  maritime 
Nation  for  more  than  two  generations,  but  we  were,  up  to  1858,  the 
greatest  maritime  Nation  in  the  world.  We  know  how  to  build  ships ; 
we  know  how  to  sail  sliips ;  we  know  how  to  operate  ships  if  the  con- 
ditions are  right.  We  are  confronted  to-day  with  a  situation  which 
has  never  before  existed  in  this  Eepublic,  and  this  extraordinary  con- 
dition is  due  to  the  great  European  war. 

As  far  back  as  1909  I  have  said,  before  chambers  of  commerce  and 
boards  of  trade  in  many  of  the  States,  that  our  foreign  commerce  is 
now  and  has  been  for  20  years  absolutely  at  the  mercy  of  the  exigen- 
cies of  international  politics.  And  why?  Because  60  per  cent  of  it  is 
carried  by  Britain  and  20  per  cent  by  Germany.  I  have  said  that  we 
would  be  menaced  by  a  frightful  calamity  if  these  two  powers  should 
fall  afoul  of  each  other;  and  we  see  it  to-day,  gentlemen.  And  now, 
as  I  understand  it,  the  Government  has  come  forward  with  the  propo- 
sition to  meet  this  great  emergency  caused  by  the  terrible  European 
war,  with  which  we  have  never  before  been  confronted.  I  am  going 
into  this  subject  because  I  have  been  brought  into  close  contact  with 
it,  and  I  know  of  some  things  from  personal  experience  that  I  would 
like  to  speak  of  briefly,  if  you  will  allow  me.  I  have  been  willing  to 
fall  into  line  w^ith  anj^  proposition  promising  relief  not  only  from  a 
commercial  viewpoint  but  also  with  reference  to  national  defense. 
We  have  no  naval  auxiliary  merchant  marine,  which  is  a  perilous 
situation.  Admiral  Sperry  told  me  just  a  few  months  before  he 
died,  at  Providence,  R.  L,  when  attending  the  deeper-waterways 
convention,  that  the  Navy  of  which  we  are  so  proud  and  upon  which 
we  have  spent  so  many  millions  of  dollars  would  not  have  10  per 
cent  of  its  efficiency  on  a  sudden  call,  for  a  lack  of  naval  auxiliary 
cruisers  to  carry  coal  for  its  bunkers,  scout  ships,  hospital  ships,  and 
transports  to  be  used  in  time  of  war.  Now,  gentlemen,  I  have  main- 
tained all  along  that  if  we  had  such  vessels  they  could  be  used  in 
times  of  peace  to  carry  the  commerce  of  our  country  to  the  great 
South  American  ports,  such  as  Buenos  Aires,  a  city  of  nearly  a 
million  and  a  half  inhabitants,  where  not  a  vessel  has  carried  the 
Stars  and  Stripes  for  many  years;  and  our  mails  and  our  passengers 
have  to  go  bj^  slow  freight  boats  or  across  the  ocean  twice,  as  you 
all  know. 

This  situation  has  changed  in  the  last  25  years.  American  manu- 
facturers have  increased  their  output  enormously  and  we  have  become 
such  an  important  export  nation  that  we  have  got  to  furnish  ade- 
quate transportation  facilities  and  not  depend  upon  the  ships  of  for- 
eign nations;  otherwise,  our  manufacturers  will  have  to  reduce  their 
output  and  the  laboring  man  will  have  to  go  on  the  street.  There  is 
no  such  thing  as  America  standing  still.  We  must  go  forward  or 
lose  our  prestige. 

Realizing  the  importance  of  this  situation  from  both  angles — and  I 
usually  treat  the  subject  from  both  its  commercial  aspect  and  its 
patriotic  viewpoint — 1  say  that  I  have  been  willing  to  give  and  take. 
When  Mr.  Humphrey  proposed  his  ocean-mail  contract  measure, 
offering  us  relief  on  those  long  trade  routes,  I  worked  for  that.  When 
Senator  Gallinger  offered  his  ocean-mail  contract  measure  as  a  means 
of  relief  to  offset  the  disadvantages  and  handicap  with  which  we  are 


424      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

confronted,  I  supported  that.  But,  gentlemen,  it  was  a  great  sur- 
prise to  me  when  the  Government  came  forward  and,  with  its  great 
financial  ability  and  its  success  in  managing  the  ships  now  under  its 
control,  offered  to  take  hold  of  this  situation  in  such  a  way  that 
private  capital  has  never  been  willing  or  able  to  do.  I  accepted  it  at 
once  as  the  best  solution  of  our  mechant-marine  problems. 

As  I  told  the  gentleman  who  appeared  before  the  international 
trade  convention  at  the  Hotel  Astor,  Mr.  W.  H,  Douglas,  avIio  always 
has  something  to  say  about  the  merchant  marine  on  ever}'  occasion 
that  offers,  and  always  advocating  subsidies.  I  told  him  that  what 
the  shippers  wanted  was  low  rates;  and  he  insisted  that  the  Govern- 
ment was  going  to  lose  money  by  embarking  in  the  shipping  business. 
Did  anybody  ever  before  hear  of  the  shipper  objecting  to  the  Govern- 
ment's losing  money  if  they  profited  by  it?  If  it  carried  the  products 
for  nothing,  would  they  not  grab  it?  You  know  they  would,  and  I 
told  Mr.  Douglas  that,  as  a  business  man,  that  he  knew  perfectly  well 
that  no  subsidy  short  of  $25,000,000  would  meet  the  present  situation. 
I  reminded  him  that  France  subsidizes  her  merchant  marine  to  the 
extent  of  $13,428,000;  that  Great  Britain  subsidizes  her  merchant 
marine  to  the  extent  of  $9,689,000,  or  thereabouts,  and  Japan 
$6,580,000.  And  so  on  down  the  line.  And  all  of  those  nations  are 
able  to  man  and  operate  their  ships  from  20  to  40  per  cent  less  than 
the  United  States  can  under  normal  conditions.  And  with  such  a 
handicap  as  that,  I  asked  him  what  is  the  use  of  talking  about  a 
subsidy  of  less  than  $25,000,000.  I  said,  "  You  talk  about  that  vast 
sum,  but  you  know  you  are  not  going  to  get  it.  In  other  words,  you 
know  perfectly  well  j^ou  are  not  going  to  get  a  subsidy  of  any  kind 
through  this  Congress."  And  right  here  let  me  say  that  I  have  always 
been  opposed  to  the  principle  of  subsidy.  I  have  been  Avilling  to 
accept  the  ocean  mail  contract  as  a  compromise;  but  I  did  not  con- 
sider it  a  subsidy.  I  see  m}'  friend  on  the  left,  from  Massachusetts, 
is  shaking  his  head,  and  I  know  he  is  going  to  come  back  at  me 

Mr.  Greene.  Oh,  no;  I  am  not.    You  are  talking  fine. 

Mr.  EwELL.  Thank  you ;  I  am  glad  to  hear  you  say  so.  I  stood  for 
the  ocean  mail  contract  proposed  by  Representative  Humphrey,  as  I 
mentioned  a  while  ago ;  I  also  stood  for  the  ocean  mail  contract  sug- 
gested by  Senator  Gallinger;  but  I  claimed  then,  and  I  contend  now, 
that  the  ocean  mail  contract  is  not  a  subsidy,  because  we  are  paying 
for  actual  value  received.  We  are  paying  enormous  sums  to  trans- 
port our  mails  from  Boston  to  San  Francisco  and  other  distant  cities 
in  the  United  States  by  rail;  and  are  we  not  entitled  to  some  assist- 
ance in  transporting  our  mails  to  such  great  national  centers  as 
Buenos  Aires  and  Rio  de  Janiero?  When  our  mails  are  now  being 
carried  by  slow  freight  boats  and  under  foreign  flags,  a  most  humili- 
ating condition. 

Mr.  Hardy.  Let  me  suggest  to  you  there  that  if  you  make  that 
qualification  as  to  what  a  subsidy  is,  then  you  ought  not  to  charge 
that  England  is  subsidizing  her  lines,  for  in  every  case  where  she 
pays  anything  she  has  demanded  value  in  return — substantially,  at 
any  rate. 

iVIr.  EwELL.  I  understand  that  England  also  gives  admiralty  sub- 
ventions for  building  ships.  The  builders  can  not  buy  except  from 
those  merchants  on  the  admiralty  list  when  they  receive  mail  pay. 


SHIPPING  BOAKD^  NAVAL  AUXILIARY,  AND  MEECHANT  MARINE.      425 

Mr.  Hardy.  No;  England  does  not.  She  pays  a  few  special  ves- 
sels built  under  specifications  made  by  the  admiralty,  a  certain  sum 
for  the  privilege  of  having  those  vessels  specially  constructed  and 
thereby  diminishing  their  freight-earning  capacities,  and  at  the  same 
time  with  the  privilege  of  taking  them  over  in  case  of  war,  they  being 
held  ready  for  the  English  Government.  Now,  that  is  not  paying 
a  subsidy  in  any  ordinary  sense  of  the  word,  any  more  than,  as  you 
say,  our  mail  contract  is  a  subsidy.  If  we  pay  no  more  than  the 
service  is  worth,  it  is  not  a  subsidy. 

Mr.  EwELL.  That  is  the  way  I  look  at  it.  That  has  been  my  point 
of  view.  But  England  has  been  fostering  her  marine  by  special  mail 
pay  for  70  years,  and  has  spent  $800,000,000  in  that  direction  during 
that  period.  I  would  like  to  say  here,  however.  Congressman,  if  you 
will  allow  me,  that  I  understand  England  does  not  permit  the  pur- 
chase of  any  material  entering  into  the  construction  of  those  ships 
that  received  financial  aid  except  from  such  houses  as  the  admiralty 
laATs  designate. 

Mr.  Hardy.  I  do  not  know  about  that ;  but  there  is  no  subsidy  paid 
by  England. 

Mr.  EwELL.  Now,  gentlemen,  this  much  I  have  said  in  favor  of 
ocean  mail  contracts,  but  if  anything  else  is  offered  better  than  that, 
I  am  glad  to  accept  it. 

Mr.  Green.  We  will  offer  that  to  you. 

Mr.  Ewell.  Yes;  but,  Mr.  Congressman,  allow  me  to  say  I  have 
considered  that  what  the  Government  is  offering  us  is  infinitely 
better,  and  so  much  greater,  that  I  think  our  people  should  jump  at 
the  opportunity. 

One  of  the  reasons  why  we  should  accept  the  proposition  of  the 
Government  is  because  of  the  handicap  by  which  we  are  hampered. 
Of  course,  when  the  shippers  are  getting  from  300  to  900  per  cent 
more  for  carrying  freight  under  such  conditions  as  now  confront 
us,  it  is  not  difficult  to  get  private  capital  to  embark  in  the  business. 
But  what  we  want  is  a  permanent  American  merchant  marine.  And 
1  want  to  say  that  you  can  not  have  such  an  American  merchant 
marine  unless  the  ships  are  built  in  this  country,  in  American  ship- 
yards, by  American  labor,  manned  by  Americans,  and  officered 
by  Americans,  because  otherwise  what  will  happen?  Just  exactly 
what  happened  in  the  Spanish-American  War,  where  the  St.  Louis 
and  the  St.  Paul  both  did  valiant  service. 

When  they  were  ordered  into  the  service  of  the  Navy,  the  foreign 
sailors  on  those  vessels  walked  down  the  gangplank  and  told  us  to 
■'fight  your  own  battles";  they  said,  "we  are  not  Americans;  this 
is  your  war  and  not  our  fight."  And  therefore  it  must  of  necessity 
be  a  costly  proposition  for  America  until  we  can  standardize  the 
building  of  ships.  But  we  must  have  American  ships.  It  will 
probably  take  15  years;  it  may  be  done  in  10  years  with  the  present 
enormous  demand.  I  firmly  believe  that  this  abnormal  demand  for 
ships  will  last  for  a  period  of  six  or  eight  years,  and  probably  longer, 
because  when  this  war  is  over — and  none  of  us  can  tell  when  it  will 
cease;  it  may  be  two  years  and  it  may  be  longer — there  will  have 
been  so  many  ships  sunk,  and  there  will  be  such  a  demand  for  the 
reconstruction  of  the  nations  now  at  war,  that  no  matter  how  many 
ships  we  could  build  to-day,  we  could  not  supply  the  demand  for  the 
ships  in  the  across-seas  traffic  for  years  to  come. 


426      SHIPPING  BOAKD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

But  now,  by  the  GoA'ernment  taking  hold  of  this  proposition,  the 
Government  can  send  ships  on  long  trade  routes  to  such  countries 
as  Argentina,  Australia,  and  the  Orient,  even  at  a  loss.  The  Gov- 
ernment can  do  that.  Private  capital  will  not  do  it,  and  for  that 
reason  I  claim  that  the  Government  should  undertake  this  great 
national  problem.  If  we  lose  a  little  money  in  building  up  thi; 
great  export  trade  of  this  young  Nation,  it  can  not  be  counted  as  a 
loss,  because  it  builds  for  the  future  of  the  Nation.  And  there- 
fore I  say  that  the  Government  is  the  one  to  undertake  this  proposi- 
tion, because  private  capital  would  only  venture  where  it  paid  them 
to  go. 

The  shipping  business  is  a  business  proposition  and,  like  every- 
thing else,  must  stand  or  fall  on  its  ability  to  make  money, 
and  that  is  all  you  can  make  of  it.  You  can  not  get 
private  capital  to  embark  in  it  unless  it  sees  a  chance  to  make 
money ;  but  the  American  Government  does  not  w^ant  private  capital 
to  embark  in  the  business  on  the  basis  that  the  purchasers  of 
the  Dashia  did,  when  they  purchased  that  ship  for  $125,000  and 
charged  $150,000  for  the  first  cargo  that  they  carried  abroad.  That 
sort  of  enterprise  stifles  and  strangles  our  export  business,  and  that 
is  not  what  the  people  want.  If  Congress  passes  this  bill  and  the 
Government  holds  51  per  cent  of  the  stock  of  the  corporations 
formed,  and  if  private  capital  will  take  49  per  cent,  and  the  Govern- 
ment controls  its  operations,  so  that  it  will  be  an  equitable  proposi- 
tion for  the  shippers  to  all  parts  of  the  world.  I  claim  that  that  will 
act  as  a  great  adjuster  of  rates  in  the  acrcss-seas  traffic. 

Certainly  we  have  negelected  one  of  the  greatest  sources  of  national 
wealth  in  the  world  for  over  50  years  by  allowing  our  flag  to  dis- 
appear from  the  high  seas.  I  claim  that  it  is  worth  the  price,  no  mat- 
ter what  it  costs,  for  us  to  reestablish  ourselves  as  a  powerful  mari- 
time Nation.  No  nation  has  ever  grown  great  that  did  not  carry  at 
least  40  per  cent  of  its  foreign  commerce.  It  has  been  more  than 
27  years,  gentlemen,  since  we  carried  20  per  cent  of  our  foreign  com- 
merce, and,  you  know,  that  just  before  the  war  we  were  carrying  only 
a  little  over  8  per  cent.  That  sort  of  thing  operates  in  more  than 
one  way.  Aside  from  the  fact  that  it  is  costing  us  $300,000,000  in 
gold  to  transport  our  freight  and  our  passengers,  which  money  is 
absolutely  lost  to  the  commerce  and  trade  of  America  and  goes  into 
the  pockets  of  the  foreign  shipowners.  Thus  we  are  continually  con- 
fronted with  a  worse  and  worse  condition  by  using  the  delivery 
wagons  of  our  foreign  competitors. 

There  has  been  quite  a  let  said  about  using  the  delivery  wagons 
of  other  nations,  because  it  is  a  comparison  that  we  can  all  appreciate. 
You  can  not  depend  upon  the  delivery  system  of  your  competitors 
very  long  before  they  will  have  your  business.  We  have  already 
seen  that.  Especially  am  I  familiar  with  the  way  the  Germans 
handled  that  situation  before  the  war.  They  had  such  a  splendid 
organization  in  New  York,  where  they  took  an  accurate  account 
of  every  bill  of  lading,  every  manifest,  the  weight  of  the  article,  the 
price  of  the  article  the  consumer  to  whom  it  was  shipped  abroad 
(generally  in  South  America)  and  they  sent  that  information  to 
their  chambers  of  commerce  in  Germany,  and  there  it  was  sent  out 
to  their  various  representatives  in  the  foreign  countries,  and  those 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      427 

representatives  vould  take  that  information  and  would  go  to  the 
foreign  buyers  and  offer  to  lay  down  the  same  article  for  less  money 
than  we  could.  And  I  understand  that  invariably  they  used  the 
argument,  "  Your  goods,  if  bought  from  Germany,  will  not  have  to 
cross  the  ocean  twice,  as  they  frequently  do  if  bought  in  America, 
and  they  will  not  be  delayed  until  they  are  absolutely  out  of  season; 
but,  if  you  buy  them  from  us  we  will  deliver  them  on  time,  and  can 
be  sure  of  getting  the  right  article  and  getting  the  lowest  freight 
rates." 

The  Chairman.  We  will  take  our  usual  recess  at  this  point. 

(Thereupon,  at  12.45  o'clock  p.  m.,  the  committee  took  a  recess  until 
2  o'clock  p.  m.) 

AFTER  RECESS. 

The  committee  reconvened  pursuant  to  the  taking  of  the  recess, 
Hon.  Michael  E.  Burke  presiding. 

Mr.  Burke.  Judge  Alexander  is  occupying  the  chair  in  the  House 
of  Representatives  and  he  can  not  be  here  this  afternoon,  but  we  will 
proceed  with  the  hearing. 

Mr.  Ewell.  I  will  not  detain  you  but  a  few  minutes  longer. 

Mr.  Burke.  We  would  like  to  have  you  finish  your  statement,  as 
you  contemplated,  notwithstanding  most  of  the  members  are  absent. 
But  I  expect  that  they  will  be  dropping  in  every  minute  or  two. 

Mr.  Ewell.  I  appreciate  the  privilege. 

Mr.  Burke.  I  hope  you  will  not  cut  short  any  of  your  remarks 
because  of  the  absence  of  a  quorum. 

Mr.  Eavell.  1  thank  you,  sir.    At  your  solicitation,  I  will  proceed. 

With  58,000  carloads  of  freight  on  the  sidetracks  near  the  ter- 
minals of  New  York  Harbor,  the  metropolis  of  the  world,  the  situa- 
tion is  growing  more  and  more  desperate  daily,  and  it  seems  that 
there  is  no  relief  at  all  in  sight.  And  it  does  not  seem  to  me  that 
this  is  a  time  for  hairsplitting.  The  reason  why  we  have  not  had  a 
merchant  marine  in  all  this  long  period  of  50  years  is  because  there 
could  be  no  harmony  between  the  two  parties.  There  have  always 
been  some  differences  that  could  not  be  harmonized.  But  the  situa- 
tion is  now  so  desperate  that  it  seems  to  me  that  we  ought  to  give 
and  take,  and  to  grasp  this  opportunity  offered  by  the  Government 
in  the  form  of  a  shipping  bill,  Avith  a  board  to  be  appointed  by  the 
President,  to  regulate  rates,  so  that  the  people  will  feel  that  we  have 
some  definite  shipping  prospect  for  the  future. 

Mr.  Burke.  Eight  in  that  connection,  Mr.  Ewell,  You  are  aware 
that  the  bill,  as  it  now  reads,  calls  for  the  appointment  of  a  board 
of  five,  consisting  of  the  Secretary  of  the  Navy,  the  Secretary  of 
Commei'ce,  and  three  other  competent  men?  There  has  been  some 
question  here  as  to  whether  or  not  further  qualifications  should  be 
prescribed  in  the  bill  with  reference  to  the  class  of  men  from  which 
the  other  three  should  be  appointed.  Some  have  thought  that  they 
should  be  men  experienced  in  the  shipping  business.  I  would  like 
to  have  your  views  on  that.  Do  you  think  it  w^ould  be  better  to 
amend  the  bill,  so  as  to  require  that  they  be  taken  from  that  class, 
or  to  leave  that  to  the  judgment  of  the  President,  who  does  the 
appointing? 


428      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  EwELL.  I  think  it  entirely  safe  to  leave  that  to  the  judgment 
of  the  President.  He  will  undoubtedly  select  men  having  technical 
knowledge  as  assistants,  who  will  do  the  active  work. 

One  reason  why  it  has  been  difficult  for  our  people  to  get  together 
on  the  subject  is  because  the  shipping  question  is  one  in  which  the 
general  public  have  not  interested  themselves.  It  is  not  because  we 
can  not  grasp  a  commercial  proposition,  because  we  are  quick  to  take 
advantage  of  any  business  opportunity  to  which  our  attention  has 
been  drawn;  but  it  has  been  my  experience  in  talking  before  cham- 
bers of  commerce,  boards  of  trade,  and  commercial  bodies  in  various 
large  centers  (and  I  mention  this  because  those  men  are  considered 
to  be  leading  active  men  engaged  in  business)  and  to  have  them 
come  forward  after  the  meeting  and  express  their  absolute  ignorance 
on  the  subject"  of  the  merchant  marine,  and  say  "that  they  had  no 
idea  that  such  a  condition  prevailed."  They  could  not  understand 
how  it  was  possible  for  Congress  to  permit  us  to  continue  in  that 
desperate  situation  so  long.  I  have  frequently  told  them  that  "  it  is 
because  of  their  constituents  at  home;  it  is  because  you  have  not 
studied  the  question;  it  is  because  you  have  not  expressed  yourself 
one  way  or  the  other  largely." 

In  appearing  before  Chautauquas,  for  example  a  very  large  Chau- 
tauqua at  Georgetown,  Ohio,  where  I  talked  to  more  than  3,500 
people,  and  at  a  large  chautauqua  meeting  at  Patterson  Springs, 
111. — I  regret  that  our  Granger  friends  who  spoke  this  morning  are 
not  here  to  hear  this  reference — at  the  conclusion  of  those  meetings 
the  farmers  came  around  in  large  numbers  and  begged  me  to  come 
back  the  following  week,  in  both  places.  They  said  they  had  no 
idea  that  such  a  situation  existed  at  all,  and  that  if  I  would  come 
back  the  following  week  they  would  have  a  different  audience  of 
other  men  to  hear  about  this  great  merchant  marine  that  we  ought 
to  have  and  had  not  been  able  to  get.  And  one  of  the  things  I  pointed 
out  to  those  farmers  was  this,  that  during  the  Boer  War  between 
that  little  African  Eepublic  and  Great  Britan,  Britain  withdrew 
so  much  of  her  large  tonnage  from  the  carrying  trade  that  it  caused 
such  a  marking  up  of  freights  that  the  farmers  lost  in  the  value  of 
their  products,  by  the  time  they  got  returns,  $48,000,000  the  first  year 
of  the  Boer  War  (although  the  little  Republic  referred  to  did  not  have 
a  single  privateer  engaged)  and  $67,000,000  the  second  year:  so  that 
the  American  farmer  was  touched  in  pocket  to  the  tune  of  $115,000,000 
to  pay  for  the  Boer  War,  because  our  export  trade  is  at  the  mercy 
of  the  foreign  shipowners.  And  now  this  fact  is  being  brought  home 
to  us  in  such  a  way  that  we  can  appreciate  it.  I  am  calling  atten- 
tion to  these  facts  to  show  you  how  little  regard  our  people  have  paid 
to  the  subject.  I  do  not  wish  to  be  disrespectful  to  the  intelligence 
of  any  American  citizen,  whether  he  be  a  farmer  or  a  banker.  I 
am  now  going  to  call  attention  to  a  situation  that  has  been  made 
much  of  by  the  subsidy  hunters,  the  tremendous  amount  of  capital 
that  was  niade  out  of  the  action  of  the  National  Chamber  of  Com- 
merce, when  they  passed  a  resolution  in  February,  1915,  opposing 
the  shipping  bill.  It  is  necessary  for  us  to  know,  in  order  to  under- 
stand, who  composed  the  committee  that  drafted  that  resolution  on 
the  American  merchant  marine.  I  was  present  and  heard  Secretary 
McAdoo's  speech  and  Senator  Burton's  reply. 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      429 

Mr,  Hadley.  Do  you  refer  to  the  resolution  passed  last  year  or  the 
one  passed  this  year  ? 

Mr.  EwELL.  The  resolution  passed  last  year.  I  am  referring  now 
to  the  resolution  on  the  old  shipping  bill  of  1915.  You  can  very 
readily  see,  gentlemen,  that  the  committee  appointed  to  draft  that 
resolution  were  men  whose  views  were  known  by  the  chairman  or 
executive  committee  of  that  body,  and  a  report  made  by  them  would 
dominate  the  chamber  on  a  subject  so  technical.  Although  a 
splendid  body  of  men,  they  were  not  in  a  position  to  argue  the  merits 
of  the  merchant  marine.  I  know  that  from  the  personal  experience, 
I  have  before  referred  to  here.  Our  business  men  have  not  studied 
the  question. 

Let  us  look  at  the  personnel  of  that  committee.  One  member  of 
that  committee  was  very  active  in  the  Merchant  Marine  League  of 
Cleveland,  Ohio,  as  secretary — Mr.  John  A,  Penton.  He  was  put 
on  the  resolution  committee  because  that  chamber  knew  exactly 
where  he  stood;  they  knew  that  he  would  fight  anything  that  did 
not  have  subsidy  pork  in  it.  I  overheard  him  say, '  What  they  want  to 
try  to  do  is  to  get  this  shipping  bill  through  so  as  to  take  away  from  us 
our  coastwise  shipping.  We  must  fight  it."  That  gentlemen  was 
brought  down  here  before  the  Olcott  committee,  I  think  that  was  the 
committee,  and  prosecuted  for  some  weeks,  for  the  insulting  refer- 
ences made  in  his  American  Flag  against  Congressmen  Kustermann 
and  Steenerson,  and  he  had  a  hard  time  to  keep  out  of  serious 
trouble.  I  also  heard  him  say  at  the  merchant  marine  congress  held 
at  New  Orleans  in  1910,  that  he  would  have  to  keep  in  the  back- 
ground. Now,  why  was  that?  And  in  1911  he  said  to  me  at  the 
Waldorf  Astoria  his  merchant  marine  league  would  have  to  go  out 
of  business,  and  it  did. 

That  is  one  member  of  the  committee.  Another  member  of  that 
committee  was  Mr.  Ludwig  Nissen,  of  New  York  City,  Mr.  Ludwig 
Nissen,  I  am  reliably  informed,  although  this  is  not  at  all  to  his 
discredit,  learned  the  English  language  after  he  came  to  his  adopted 
country.  Mr,  Ludwig  Nissen  is  a  director  in  one  of  the  most  power- 
ful organizations  in  the  United  States — the  National  Association  of 
Manufacturers.  The  National  Association  of  Manufacturers,  I  have 
noticed  since  the  Mulhall  investigation,  or  the  big  men  of  the  Na- 
tional Association  of  Manufacturers,  have  been  very  conspicuous 
for  their  absence  from  all  of  these  big  meetings  noAv  being  held  at 
Washington.  I  noticed  that  none  of  those  "big  guns"  who  head 
that  institution  were  present  at  the  national  chamber  of  commerce 
meeting,  except  a  little  man  from  the  office,  who  represented  the 
domestic  bureau  of  the  American  industries.  I  asked  him  where 
the  big  men  were,  and  he  said  he  was  the  only  big  man  down  there 
from  their  organization. 

The  other  member  of  that  committee  was  Mr.  William  H.  Douglas. 

Mr.  Burke.  He  appeared  before  the  committee  a  couple  of  weeks 
ago. 

Mr.  EwELL.  Yes;  Mr.  Douglas  was  extremely  bitter  against  the 
Government  ship-purchase  bill. 

Why  are  these  men  so  violent  in  their  denunciation  of  the  Secre- 
tary in  this  matter?  Because  all  of  the  big  interests  that  are  so 
closely  allied  are  opposed  to  the  Government  going  into  the  shipping 
32910— IG 28 


430      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

business.  They  want  "hands  off"  on  a  plum  so  large  as  this  busi- 
ness with  an  enormous  pork  barrel  turned  into  subsidy — their  plan; 
they  can  Avax  fat  at  the  Government  expense.  And,  again,  because 
the  coastwise  trade  and  the  great  pig-iron  industries  and  the  large 
steel  industries  with  all  the  corelated  sj'stems  underlying  that  trade 
are  opposed  to  it.  Why?  Because  they  are  afraid  that  if  the  Gov- 
ernment goes  into  this  business  and  gets  into  the  coastwise  trade  it 
is  going  to  injure  the  present  coastwise  shipping.  I  do  not  consider 
that  the  purpose  of  this  bill  at  all.  I  believe  there  is  going  to  be 
so  much  business  that  there  will  be  plenty  for  all.  I  do  not  under- 
stand that  this  bill  contemplates  that  these  ships  shall  engage  in  the 
coastwise  trade  at  all,  except  perhaps  in  our  outlying  possessions. 
Therefore  it  seems  to  me  that  they  are  unduly  aroused. 

Mr.  Burke.  I  beg  your  pardon.  Mr.  EA\el],  but  going  back  to  the 
referendum  vote  that  was  taken  in  the  different  chambers  of  com- 
merce through  the  country  upon  the  previous  shipping  hill,  have  you 
any  idea  as  to  the  methods  pursued  in  any  or  many  of  the  chambers 
of  commerce  in  taking  that  vote? 

Mr.  EwELL.  I  think  it  was  by  a  postal-card  vote,  in  Avhich  the 
executive  committee  or  a  few  directors  participated.  I  understand 
that  was  the  system  employed  and  is  the  custom  usually  adopted. 
I  think  it  is  safe  to  say  that  when  the  National  Chamber  of  Com- 
merce, composed  of  the  various  chambers  of  commerce  all  over  the 
United  States,  passed  on  this  subject  and  sent  out  their  message 
through  their  executive  committee,  "  as  I  said  before,  the  education 
of  the  American  people  on  the  subject  of  an  American  merchant 
marine  has  been  so  neglected,"  that  they  were  willing  to  follow  the 
resolution  passed  by  the  National  Chamber  of  Commerce.  I  am  sure 
the  rank  and  file  expressed  no  opinion  in  the  matter.  I  remember 
full  well  when  the  notices  were  sent  out  to  organize  the  National 
Chamber  of  Commerce  I  was  invited  to  come  into  it  as  a  charter 
member  as  secretary  of  the  National  Merchant  Marine  Association, 
by  Mr.  Davidson,  of  the  Worcester  Board  of  Trade.  His  idea  was 
that  they  should  bring  together  all  of  the  chambers  in  one  great 
national  body,  so  that  they  might  act  through  one  main  center. 
Therefore  I  think  it  is  safe  to  say  any  matter  so  technical  as  the 
merchant  marine  passed  upon  by  the  National  Chamber  of  Commerce 
would  naturally  be  accepted  by  the  subsidiary  bodies  over  the 
country. 

Mr.  Burke.  I  will  say  that  that  was  the  testimony  of  a  Mr.  Rosen- 
thal, of  Chicago,  who  appeared  here  and  testified  that  he  was  inter- 
ested in  this  subject,  and  connected  with  the  chamber  of  commerpe 
and  the  Business  Men's  Association,  of  Chicago.  He  also  gave  us 
some  information  about  the  method  that  was  used  in  the  Chicago 
Chamber  of  Commerce  and  some  others  as  to  the  taking  of  the 
sense  of  the  respective  chambers  of  commerce  in  the  different  States, 
showing  that  the  rank  and  file  did  not  have  a  chance  to  express 
themselves  upon  the  question,  much  less  to  understand  it,  and  that 
usually  it  was  a  few  directors  who  gave  expression  for  the  entire 
bodv. 

Mr.  EwELL.  Exactly. 

Mr.  CuRRr.  Right  here  I  would  like  to  give  my  understanding  of 
that.    I  am  not  familiar  with  the  method  of  taking  a  referendum  vote 


SHIPPING  BOAKD,  NAVAL  AUXILIAKY,  AND  MERCHANT  MARINE.      431 

on  these  propositions  by  any  chambers  of  commerce  outside  of  those 
in  California,  but  I  do  know  how  the  referendum  vote  is  taken  there, 
and  I  know  hoAv  the  referendum  vote  was  taken  on  this  proposition. 
The  proposition  was,  first  of  all,  received  by  the  chamber  of  com- 
merce, and  was  referred  to  the  executive  committee,  and  the  executive 
committee  either  sent  a  postal  card  to  each  member  of  the  chamber 
of  commerce  in  town,  or  they  call  a  meeting  and  in  the  call  state  what 
the  meeting  is  for. 

When  it  is  at  a  called  meeting,  it  is  discussed  by  the  full  member- 
ship and  is  voted  upon.  But  upon  this  proposition  it  was  voted  upon 
by  a  postal-card  vote,  and  each  member  of  the  chamber  of  commerce 
in  San  Francisco,  Oakland,  Los  Angeles,  and  Sacramento — those  I 
know  of  personally  and  the  others  I  only  know  of  by  hearsay — voted 
a  postal-card  vote  on  the  proposition  and  the  chambers  of  commerce 
in  those  cities  sent  in  the  opinions  of  the  members  of  the  chambers 
of  commerce  in  that  matter.  What  they  do  in  the  East  I  do  not 
know  anything  about. 

Mr.  Greene.  I  think  the  same  course  was  pursued  in  my  chamber 
of  commerce. 

Mr.  Burke.  I  do  not  know  that  Mr.  Rosenthal  undertook  to  speak 
of  the  three  cases  you  mentioned,  Mr.  Curry. 

Mr.  Curry.  I  do  not  think  that  Mr.  Rosenthal  designated  any  par- 
ticular chamber  of  commerce;  be  simply  generalized;  that  he  was 
connected  with  a  great  many  business  interests,  but  he  did  not  defi- 
nitely state  what  they  were.  He  said  he  was  interested  in  a  chain 
of  drug  stores  and  other  propositions  of  that  kind,  without  designat- 
ing in  what  toAvns  they  were  or  what  their  names  were,  or  anything 
of  that  kind.  He  did  state  that  he  was  connected  with  one  depart- 
ment store,  a  mail-order  house  in  Chicago,  but  whether  as  owner  or 
employee  he  did  not  say. 

Mr.  Burke.  All  of  that  is  true,  Mr.  Curry;  but  he  also  stated  that 
he  was  a  member  of  the  Chicago  Chamber  of  Commerce,  and  he  went 
on  to  tell  us  how  a  few  members  did  the  whole  thing  for  that 
chamber. 

Mr.  Curry.  I  do  not  remember  that. 

Mr.  Burke.  You  may  proceed,  Mr.  Ewell. 

Mr.  Eavell.  I  would  like  to  ask  if  I  am  correct  in  assuming  that 
the  shipping  board  also  intends  to  control  rates  of  foreign  ships  that 
touch  our  ports  under  this  bill  ? 

Mr.  Greene.  I  think  they  are  going  to  try  to. 

Mr.  Burke.  I  do  not  know  that  that  is  one  of  the  express  powers, 
but  they  have  power  under  this  bill  to  prescribe  rules  and  regulations 
whereby  discriminations  and  rebates  and  matters  of  that  kind  will 
be  prevented. 

Mr.  Eavell.  I  think  that  that  would  be  most  important,  for  this 
reason :  I  have  discovered  in  my  investigations  that  there  has  been  a 
powerful  Shipping  Trust  organized,  with  enormous  powers,  operating 
at  the  port  of  New  York.  When  I  was  secretary  of  the  Merchant  Ma- 
rine Committee  of  One  Hundred  in  1910  a  letter  was  sent  out  purport- 
ing to  come  from  six  large  representative  import  houses,  stating  that  Ave 
"did  not  need  any  more  shipping  to  South  American  countries,  and 
that  we  had  ample  shipping  facilities."  In  other  Avords,  they  stated 
"  that  there  was  more  shipping  than  Avas  needed."    That  letter  was 


432      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

sent  out  to  the  various  papers  that  were  in  sympathy  with  the  for- 
eign shipoAvners — they  also  carried  their  advertisements — and  this 
letter  was  given  considerable  publicity.  As  secretary  of  the  Mer- 
chant Marine  Committee  of  One  Hundred,  I  ran  down  that  letter 
and  discovered  that  it  had  been  written  by  Mr.  Daniels,  of  Busk  & 
Daniels,  representative  of  the  Lamport  &  Holt  Line.  Those  facts 
I  stated  before  the  Olcott  Committee  when  I  appeared  before  them 
in  1910,  and  Mr.  Daniels  was  brought  down  here  before  the  com- 
mittee, and  I  understand  he  was  asked  why  he  did  that — to  send  out 
a  letter  over  their  signature  of  which  he  w^as  the  author — and  he  ad- 
mitted that  there  was  a  conference  formed  in  New  York  that  met 
every  week  regularly  to  regulate  the  shipping  rates.  He  said  he 
thought  it  would  sound  better  to  send  the  letter  out  over  the  names 
of  these  merchants  than  to  send  it  over  his  name.  That  was  a  sig- 
nificant admission.  You  can  see  how  that  trust  got  a  strangle  hold 
on  the  commerce  of  this  country.  I  consider  that  one  of  the  things 
that  this  board  should  do.  Get  a  strangle  hold  on  this  Shipping 
Trust  and  put  it  out  of  business. 

We  have  ample  precedent  for  the  Government  investing  money  in 
the  stock  of  quasi  public  corporations,  and  the  opposition  that  has 
been  offered  to  the  Government  doing  this  is  from  a  familiar  source, 
but  the  selfsame  opposition  put  the  Government  in  the  express  busi- 
ness, aided  by  the  Democrats.  When  you  started  the  campaign  for 
the  establishment  of  the  postal  savings  banks,  that  was  also  opposed 
by  the  same  interests,  on  the  ground  that  the  Government  was  going 
into  the  banking  business.  And  that  also  applied  to  the  proposed 
organization  of  the  Federal  reserve  banks  that  were  established 
through  the  insistence  of  the  present  administration.  The  Govern- 
ment reserved  the  right  to  take  stock  in  these  banks  not"  taken  by 
national  banks.  Perhaps  that  is  the  main  reason  why  this  was  a 
successful  proposition  from  the  start,  and  immediately  taken  over 
by  the  national  banks  of  this  country.  As  we  all  know,  the  National 
Bankers'  Association  fought  it.  When  they  found  that  the  Govern- 
ment could  subscribe  to  any  stock  they  did  not  subscribe  to,  the  banks 
saw  to  it  that  there  was  no  stock  left  for  the  Government. 

I  have  not  been  able  to  reconcile  the  fact  that  while  Senator  Weeks 
introduced  a  resolution  in  the  Senate,  and  afterwards  a  bill,  authoriz- 
ing the  Secretary  of  the  Navy  to  withdraw  certain  cruisers  and  war- 
ships from  the  Navy  for  the  purpose  of  taking  care  of  our  shipping, 
our  mails,  and  our  passengers  in  the  overseas  route,  where  we  had 
practically  no  accommodations,  and  when  these  boats  could  only 
carry  from  17  to  19  passengers  and  could  only  carry  about  150  tons 
of  express  freight,  which  meant  from  the  start  a  big  loss  and  ex- 
pense, and  totally  unsuited  for  the  work.  Why  did  he  suggest  such 
a  proposition  as  that,  and  fight  for  it  in  the  Senate,  and  then,  when 
the  bill  came  back  from  the  House  so  amended  as  to  furnish  ships 
of  sufficient  tonnage  to  carry  thousands  of  tons  of  freight  and  hun- 
dreds of  passengers,  he  turned  squarely  around  and  fought  it  bit- 
terly ?  The  latter  had  a  splendid  equipment,  suited  to  the  service,  and 
his  scheme  was  totally  unsuited  and  assuring  a  great  waste  of  money. 
Why  Senator  Gallinger  and  Senator  Lodge  opposed  so  bitterly  a  bill 
which  was  really  a  splendid  proposition,  looking  to  the  upbuilding 
of  our  shipping,  is  irreconcilable  when  they  suggested  first  the  idea 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      433 

of  putting  the  Government  in  the  shipping  business.  They  fought 
the  thing  that  was  a  practical  solution  of  the  problem  because  the 
Government  would  exercise  control. 

I  think,  Mr.  Chairman,  it  is  putting  this  whole  proposition  on  too 
low  a  plane  when  we  discuss  the  matter  from  a  standpoint  of  profit 
only,  and  especially  when  we  are  confronted  with  such  a  serious 
crisis  as  this  world  war.  If  we  had  only  done  the  things  that  we 
have  accomplished  for  the  sake  of  profit  only,  would  we  have  built 
the  Panama  Canal,  where  we  have  spent  $400,000,000?  Would  we 
have  carried  forward  and  accomplished  the  many  things  that  I  will 
not  detain  you  to  enumerate  if  the  question  of  profit  had  always 
entered  into  them?  When  a  certain  amount  of  money  was  set  aside 
for  the  destruction  of  the  gypsy  moth,  was  it  done  because  there 
was  profit  in  it?  And  w^hen,  on  the  other  hand,  $40,000,000  was 
given  for  the  purpose  of  destroying  the  boll  weevil,  was  that  done 
because  we  were  going  to  get  immediate  profit  out  of  it?  No.  It 
was  done  for  the  general  benefit  of  all  the  people,  although  it  espe- 
cially benefited  those  people  that  were  directly  interested;  still,  you 
could  not  affect  one  section  and  have  the  result  confined  solely  to 
that;  its  influence  is  certain  to  extend  to  many  sections. 

I  consider  this  question  of  shipping  one  of  the  most  important 
problems  that  has  come  before  the  American  people  since  the  Civil 
War,  especially  when  you  view  it  from  the  angle  of  preparedness 
and  national  defense.  Our  Navy  would  not  have  10  per  cent  of  its 
efficiency  on  a  sudden  call  to  war  without  a  naval  auxiliary  marine. 
And  look  what  a  teriible  spectacle  we  were  confronted  w^ith  when 
we  had  to  send  some  of  our  soldier  boys  down  to  Cuba  to  quiet  the 
Palma  administration  some  years  ago  ?  You  remember  full  Avell  that 
we  marched  our  boys  in  blue  down  the  gangplank  to  the  tune  of  the 
Star  Spangled  Banner  and  embarked  them  on  ships  flying  the  royal 
cross  of  St.  George  of  England,  because  W'C  had  no  transports  or 
merchant  vessels  available.  And  although  we  bought  about  100 
old  hulks  for  use  in  the  Spanish- American  War,  for  which  we  paid 
$87  per  ton  of  cargo  space,  right  after  the  war  they  w^ere  sold  at  a 
heavy  loss.  They  did  not  bring  40  per  cent,  in  many  instances,  of 
what  we  paid  for  them. 

Mr.  Greene.  That  was  simply  an  emergency,  and  we  could  not  help 
it,  could  we  ? 

Mr.  EwELL.  I  admit  it  was  an  emergency,  Mr.  Greene,  but  we 
could  have  helped  it  had  we  had  a  naval  auxiliary  merchant  marine; 
and  that  is  why  I  am  supporting  now  this  proposition  to  build  one. 
And  the  shipping  bill  now  proposed  is  the  best  guaranty  of  its  com- 
pletion we  have  ever  had. 

Mr.  Greene.  If  everyone  had  thought  as  I  did,  we  would  have 
one. 

Mr.  Ewell.  I  might  say  right  here  that  one  reason  why  we  have 
not  had  a  naval  auxiliary  merchant  marine,  if  you  so  please  to  call 
it,  or  an  American  merchant  marine,  is  because  the  Republicans  of 
the  House  and  the  Senate  have  contended  for  40  years  for  subsidies, 
and  the  Democrats,  on  the  other  hand,  have  contended  principally  for 
discriminating  duties;  and  between  the  opposing  parties  we  have 
never  been  able  to  get  together.  As  a  consequence,  the  American 
people  are  exposed  to  the  terrible  crisis  with  which  we  are  now  met. 


434      SHIPPING  BOARD,  ISTA-VAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Greene.  They  have  not  divided  on  party  lines  strictly.  A 
good  many  of  the  western  Eepublicans  voted  against  the  mail  lines 
and  afterwards  Avith  the  mail  lines  with  the  naval  provision  for 
naval  auxiliaries — we  have  tried  to  have  that.  The  Democrats 
voted  solidly  against  it  and  a  number  of  western  Republicans  that 
lived  where  they  never  smelled  salt  water  or  saw  any.  But  they  voted 
against  it  because  they  thought  it  w^ould  raise  the  price  of  their 
freight. 

Mr.  E WELL.  I  was  always  glad  to  recognize  that  there  were- many 
Republicans  ready  to  vote  for  each  measure  that  came  up;  but  in 
the  main  it  was  generally  a  party  division  in  some  ratio  that  defeated 
the  main  issue,  was  it  not? 

Mr.  Greene.  No  ;  it  was  lost  since  I  have  been  in  the  House  by  1 
TOte. 

Mr.  EwELL.  That  was  the  Gallinger  bill. 

Mr.  Greene.  They  have  come  very  near  it  in  the  Senate,  but  we  lost 
out  after  a  hard  struggle  by  1  vote.  We  could  not  line  up  all  of  our 
own  people  because  of  that  very  feature  that  has  always  been  a  prob- 
lem, that  the  people  who  live  in  the  interior  States  thought  that  the 
people  on  the  coast  would  get  an  advantage;  whereas  it  would  have 
been  an  advantage  to  the  whole  country,  as  I  believe  now  and  believed 
then. 

Mr.  EwELL.  I  will  conclude  with  just  this  remark,  that  in  view  of 
the  exigencies  of  the  present  serious  situation,  I  sincerely  hope  the 
present  shipping  bill  will  be  passed  by  both  Houses.  I  subscribe  to 
it  in  all  of  its  features. 

I  thank  you. 

Mr.  Curry.  I  may  have  been  mistaken,  but  I  understood  you  to 
say  that  you  favored  the  unrestricted  admission  to  the  coastwise  trade 
of  foreign  ships? 

Mr.  EwELL.  No ;  I  did  not  say  that  I  favored  the  unrestricted  ad- 
mission. 

Mr.  Curry.  Then  I  have  no  questions  to  ask.  I  understood  you  to 
say  that. 

Mr.  EwELL.  No,  sir.  I  said  I  did  not  understand  it  to  be  the  ex- 
pectation of  the  author  of  the  bill  that  these  ships  should  touch  the 
coastwise  trade  except  at  such  points  as  our  outlying  possessions; 
and  those,  I  believe,  are  enumerated  in  the  bill. 

Mr.  Curry.  Even  those  ships  would  be  different  from  foreign 
ships.  Those  would  be  American  ships,  under  the  American  flag  and 
built  in  the  American  shipyards.  That  would  be  a  whole  lot  differ- 
ent than  if  foreign  ships  under  a  foreign  flag  and  built  in  a  foreign 
shipyard. 

Mr.  EwELL.  I  appreciate  that.  But  I  assume  the  Government  was 
willing  not  to  encroach  too  heavily  upon  our  coastwise  trade,  as  that 
has  been  so  successful  and  largely  because  of  the  fact  of  its  having 
an  absolute  monopoly.  We  have  over  7,000,000  tons  of  coastwise 
shipping. 

Mr.  Curry.  All  governments  protect  their  coastwise  trade;  even 
Great  Britain.  Tliey  protect  their  coastwise  trade  by  charging 
higher  tonnage  and  port  dues  on  foreign  ships  engaged  in  the  coast- 
wise trade  than  they  do  on  the  domestic  ships. 

Mr.  EwELL.  Yes. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      435 

Mr.  Curry.  All  maritime  nations,  either  directly  or  indiretly,  pro- 
tect their  coastwise  trade.  The  United  States  protects  its  coastwise 
trade  directly,  while  Great  Britain  protects  her  coastwise  trade  indi- 
rectly. 

Mr.  Greene.  I  want  to  say  this,  that  at  the  time  the  ship-registry 
bill  was  under  consideration  in  the  conference  committee  there  was 
a  proposition  advanced  as  a  matter  of  necessity  that  these  vessels 
be  admitted  to  the  coastwise  trade,  even  though  they  had  foreign 
officers  on  them  and  foreign  crews,  and  were  built  abroad.  The 
proposition  was  made  that  they  should  have  all  the  privileges  of  the 
coastwise  trade.    What  would  be  your  view  of  that  proposition  ? 

Mr.  EwELL.  I  would  be  opposed  to  that,  Mr.  Congressman,  for  the 
reason,  first,  that  I  do  not  believe  it  would  be  necessary,  and,  sec- 
onl}^,  I  think  it  Avould  stimulate  such  tremendous  opposition  that  it 
would  probably  defeat  the  passage  of  the  bill  in  any  form. 

Mr.  Greene.  I  do  not  mean  in  this  case.  I  mean  when  the  ship- 
registry  bill  was  on.  When  we  had  it  in  conference  the  proposition 
cam.e  up  to  admit  these  vessels  that  were  registered  under  the  Ameri- 
can flag,  foreign-built  vessels  that  we  had  allowed  to  come  in  as  a 
matter  of  emergency  to  relieve  the  situation,  the  privilege  of  the 
coastwise  trade.  And  there  are  members  on  the  committee  who  have 
stuck  to  that  idea  to-day.  Now,  I  was  a  member  of  that  conference 
committee,  and  I  gave  notice  immediately  that  if  that  proposition 
was  adopted  in  the  conference  I  Avould  not  sign  the  conference  report, 
and  I  did  not.  Senator  Perkins,  of  California,  who  was  then  suffer- 
ing from  a  severe  shock  which  he  had  had,  got  up  with  trembling 
hands  and  voice,  and  said  he  would  not  sign  it,  and  he  did  not  sign  it. 
The  conference  reported  the  bill  to  the  Senate,  and  the  Senate,  after 
a  full,  frank,  and  clear  discussion,  voted  it  out  by  a  vote  of  2  to  1. 
In  the  argument  there  it  was  shown  very  clearly  that  if  the  foreign- 
built  vessels,  with  foreign  officers  and  foreign  ciews,  w^ere  admitted 
to  the  coastwise  trade,  it  would  have  prevented  the  benefits  that  this 
country  has  received  from  the  coastwise  trade,  even  though  it  is  a 
monopoly,  as  you  say — the  benefits  received  by  the  United  States 
since  that  coastwise  trade  was  established  in  1789,  I  think  it  was, 
which  has  been  a  coast  guard  on  both  the  Atlantic  and  Pacific  coasts 
with  men  with  American  hearts  and  American  spirits,  of  American 
birth,  and  American  ownership  of  the  vessels,  men  who  had  the  spirit 
of  true  Americanism  in  their  hearts  and  who  would  have  been  ready 
to  have  protected  the  United  States  against  any  foe. 

But  there  was  a  weakness  in  that  registry  bill,  to  which  I  wish  to 
call  the  attention  of  the  committee,  and  that  is  this :  That  it  gave  to 
the  President  authority  to  grant  to  those  vessels  admitted  under 
the  American  flag  permission  to  have  foreign  officers  and  foreign 
crews  on  those  ships,  and  the  result  was  that  for  several  years  they 
granted  the  right  to  foreign  crews  and  foreign  masters  of  vessels 
to  be  admitted  to  the  rights  of  our  flag,  under  that  ship-registry  bill. 
It  seemed  to  me  then  a  mistake  and  I  think  so  now. 

Mr.  EwELL.  I  think  that  is  going  further  than  I  want  to  go,  and 
I  am  willing  to  go  on  record  as  saying  that.  But  I  would  like  to 
say  in  addition,  Mr.  Greene,  I  believe  now  that  while  before  the 
war  it  was  difficult  for  us  to  compete  in  the  across  seas  trade,  under 
the  present  conditions  and  under  the  conditions  that  we  are  liable 


436      SHIPPIXG  BOARD,  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

to  live  under  for,  perhaps,  the  next  10  years,  I  believe  that  no  matter 
what  these  ships  cost  the  Government  to  build  now,  or  to  buy,  where- 
ever  they  can  buy  them,  that  they  can  be  sold  two  years  hence,  if 
you  please,  at  a  profit  over  what  they  have  to  pay  for  them.  But 
no  matter  what  they  cost,  I  believe  they  will  make  a  profit  for  the 
Government.  And  referring  again  to  the  question  of  putting  it 
on  the  low  plane  of  profits  solely,  I  do  not  believe  that  thought, 
that  it  should  be  limited  or  confined  to  the  question  of  profit,  I  do 
believe,  however,  it  is  going  to  be  a  money-maker  for  the  Govern- 
ment, to  have  a  Government-owned  and  operated  merchant  marine. 

Mr.  Greene.  If  there  had  been  no  talk  about  a  shipping  bill  at 
all  by  the  Government,  do  you  not  believe  under  the  circumstances 
as  they  stand  to-day,  with  an  unlimited  demand  for  ships  that 
private  capital  would  have  built  those  ships? 

Mr.  EwELL.  I  do  not,  sir. 

Mr.  Greene.  I  think  they  would. 

Mr.  EwELL.  We  must  judge  the  future  by  the  past,  and  for  60 
years  they  have  not  done  it. 

Mr.  Greene.  There  never  was  such  a  condition  as  there  is  now. 

Mr.  EwELL.  But  for  50  years  we  have  placed  ourselves  in  jeopardy, 
until  we  have  reached  the  crucial  point,  waiting  for  private  capital, 
and  they  have  not  undertaken  the  business. 

Mr.  Greene.  I  know;  bat  this  situation  arose  by  reason  of  the 
war  which  has  been  blamed  very  recently  for  the  disturbance  of  all 
conditions,  the  tariff  conditions,  and  everything  else.  And,  by 
reason  of  the  war,  conditions  were  ripe  for  American  capital  to 
enter  the  trade;  but  with  a  proposition  for  Government  owned  ves- 
sels and  Government  operated  vessels,  without  regard  to  profit,  the 
inducements  for  private  capital  were  very  slight. 

Mr.  EwELL.  I  heard,  only  about  a  year  ago,  since  the  war  was  on, 
men  in  the  shipping  business  say  that  they  would  not  undertake  to 
go  into  the  business  with  the  possibility  of  the  Seamen's  Law  being 
passed,  with  that  to  contend  with  and  the  high  price  of  labor,  the 
higher  cost  of  construction  and  operation,  "  That  they  would  not 
undertake  it." 

Mr.  Greene.  But  that  has  changed  this  past  year,  has  it  not? 

Mr.  EwELL.  Yes;  but  I  heard  that  sort  of  talk  after  the  war  had 
been  going  on  many  months  and  the  shipping  men  said  they  would 
not  risk  it,  they  would  not  go  into  the  business  and  take  the  chance 
of  investing  in  ships,  but  now  that  they  see  the  large  sums  of  money 
to  be  made  actually  in  sight,  they  are  anxious  to  keep  the  Gov- 
ernment out  of  it  so  that  they  can  charge  all  the  traffic  will  bear 
and  thereby  cripple  the  farmers  and  merchants  in  their  efforts  to 
extend  their  trade  and  so  injure  the  opportunity  of  the  Nation 
to  develop  our  export  trade  at  the  most  opportune  time  offered  in 
the  history  of  America. 

(Thereupon,  at  3  o'clock  p.  m.,  the  committee  adjourned  to  Mon- 
day, February  21,  1916,  at  10.30  o'clock  a.  m.) 


CREATING  A  SHIPPING  BOARD,  A  NAVAL  AUXILIARY,  AND  A 
MERCHANT  MARINE. 


Committee  on  the  Merchant  Marine  and  Fisheries, 

House  of  Representatives, 
Thursday,  February  ^4,  1916. 
The  committee  met  at  10.30  o'clock  a.  m.,  Hon.  Joshua  W.  Alex- 
ander (chairman)  presiding. 

Mr.  Edmonds.  Mr.  Chairman,  I  would  like  to  present  a  petition 
from  the  Philadelphia  Bourse  regarding  H.  R.  10500. 

The  Philadelphia  Bourse  is  an  organization  composed  of  2,500 
business  men  in  the  city  of  Philadelphia,  and  they  have  gone  through 
the  bill  very  carefully  and  have  noted  which  portions  they  think  are 
good  and  which  are  not  good.  I  would  like  to  have  it  go  in  the 
record. 

(The  petition  referred  to  is  as  follows:) 

EE    BILL    H.    E.    10500 — A    STATEMENT   AND    PROTEST    BY    THE   PHILADELPHIA    BOUBSTT. 

AGAINvST   THE    SAMK. 

Philadelphia  Bouks!5, 
Philadelphia,  February  23,  1916. 
To  the  honorable  the  members  of  the  Committee  of  the  House  of  Representa- 
tives on  the  Merchant  Marine  and  Fisheries. 

Gentlemen  :  The  Philadelphia  Bourse  is  an  organization  composed  of  over 
2,500  business  men,  firms,  and  corporations  of  the  city  of  Philadelphia,  having 
as  one  of  its  objects  the  improvement  of  the  commercial  interests  of  the  city, 
State,  and  Nation. 

Since  its  organization  in  1891  it  has  consistently  endeavored  to  further  the 
enactment  of  laws  having  for  their  object  the  upbuilding  of  an  American  mer- 
chant marine  to  meet  the  requirements  of  the  connnerce  of  the  United  States 
with  foreign  countries  and  with  its  Territories  and  possessions,  and  through 
its  board  of  directors  and  its  committee  on  commercial  affairs  has  devoted 
much  time  to  the  study  and  consideration  of  this  most  important  question. 

It  has  carefully  studied  the  provisions  of  the  bill  (H.  R.  10500)  now  under 
consideration  by  your  honorable  committee,  and  it  is  convinced  that  plans 
and  methods  pi-oposed  in  said  bill  will  fail  to  achieve  the  purpose  as  stated  in 
the  title  of  the  bill,  and  therefore  asks  that  the  bill  be  returned  to  the  House  of 
Representatives  with  a  negative  reconmiendation,  and  begs  to  submit  the  follow- 
ing as  some  of  its  reasons,  both  general  as  against  the  principles  underlying 
the  whole  bill  and  specifically  against  certain  sections  as  named. 

Under  section  4132  of  the  Revised  Statutes  of  the  United  States,  as  amended 
by  the  Panama  Canal  act,  and  under  the  provisions  of  the  bill  H.  R.  1S202, 
Sixty-third  Congress,  approved  August  18,  1914,  American  citizens  desiring  to 
engage  in  the  operation  of  vessels  in  the  foreign  trade  were  free  to  purchase 
ships  in  the  cheapest  markets  of  the  world,  and  obtain  American  registry  for 
such  ships,  but  the  failure  of  American  citizens  to  take  advantage  of  the  op- 
portunities afforded  by  the  legislation  above  referred  to  is,  we  feel,  conclusive 
proof  that  ships  registered  under  the  American  flag  can  not  be  profitably  op- 
erated in  the  foreign  trade  under  normal  conditions. 

The  Philadelphia  Bourse  is  of  the  opinion  and  believes  that  before  a  merchant 
marine  can  be  created  under  the  American  flag  to  compete  with  foreign  ships  in 

437 


438      SHIPPIISG  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

the  overseas  trade  under  nomal  conditions  a  complete  revision  of  the  navigation 
laws  of  the  United  States  must  be  made,  so  that  the  cost  of  operating  ships 
under  the  American  flag  may  be  reduced  to  the  level  of  the  cost  of  operating 
foreign  ships  competing  for  the  same  business;  and,  further,  that  the  vessels 
which  might  he  procured  by  the  sliipping  board  under  the  bill  H.  R.  10500  and 
by  said  board  chartered,  leased,  or  sold  to  private  persons,  firms,  or  corporations 
or  to  the  corporation  as  proposed  by  section  S  will  operate  under  the  same  dis- 
advantages that  apply  to  privately  owned  vessels. 

The  Philadelphia  Bourse  opposes  the  creation  of  a  shipping  board  (as  pro- 
vided in  sections  1,  2,  9,  and  10)  with  plenary  powers  of  regulation  and  control 
of  American  and  foreign  shipping,  including  the  right  to  prescribe  preferential 
rates,  believing  that  subject  to  the  regulation  of  such  a  board  private  capital 
could  not  be  induced  to  enter  the  shipping  business,  that  existing  lines  would 
be  withdrawn  from  business,  and  that  foreign  shipowners  would  seek  other 
trade  for  their  vessels  rather  than  submit  to  such  outside  control  of  their 
business. 

As  to  the  provision  in  sections  3,  4,  and  8  for  government  ownership  and 
operation  (through  a  "dummy"  corporation),  the  bourse  is  unalterably  op- 
posed to  our  Government  trying  a  needless  and  costly  experiment  to  attain  an 
end  which  can  be  attained  without  risk  or  cost  by  the  repeal  of  all  of  our  navi- 
gation laws  which  enhance  the  cost  of  operation  of  American  ships  above  the 
cost  of  operating  competitive  shipping,  and  by  a  suitable  subsidy  given  to  ves- 
sels constructed  in  American  shipyards  to  offset  the  higher  cost  of  construction, 
thus  encouraging  the  growth  of  the  shipbuilding  industry,  an  essential  element 
in  national  security. 

The  provisions  of  section  5  the  bourse  considers  as  unobjectionable  in  prin- 
ciple, believing  that  Government-owned  vessels  suitable  for  commercial  use 
could  be  usefully  and  profitably  employed  (if  not  otherwise  required)  in  times 
of  peace  under  charter  to  private  parties,  but  their  use  should  be  restricted  to 
the  coastwise  trade  or  between  Atlantic.  Gulf,  and  Pacific  ports,  so  as  to  have 
them  close  at  hand  in  case  of  need.  They  should  not  be  permitted  to  engage 
in  foreign  trade,  as  they  might  be  at  the  antipodes  when  wanted  and  would  be 
liable  to  capture  or  internment  in  event  of  war.  Vessels  rust  out  more  quickly 
when  laid  up  in  reserve  or  out  of  commission  than  when  in  use,  hence  naval 
and  military  auxiliary  ships  under  charter  to  responsible  parties  for  use  in 
near-by  services  and  well  maintained  would  be  more  quickly  and  readily  avail- 
able for  use  than  if  laid  up  out  of  commission. 

The  bourse  believes  that  the  provisions  of  section  6,  lines  11  to  22,  constitute 
an  absolutely  unfair  and  unwarranted  interference  with  the  right  of  private 
parties  to  dispose  of  a  losing  investment  in  vessel  property,  and  if  enacted  into 
law  should  be  amended  so  as  to  be  applicable  only  in  time  of  war. 

The  bourse  believes  that  the  general  principle  of  section  7  is  right  and  might 
well  be  made  the  basis  of  a  separate  act  should  the  bill  as  a  whole  be  (as  we 
hope)  negatively  reported;  but  the  scope  should  be  eulai-ged  so  as  to  give  to  the 
President  the  right  and  power  in  time  of  war  or  any  national  emergency  to 
commandeer  any  vessel  flying  the  American  flag  upon  just  terms,  rather  than 
upon  terms  "  based  upon  normal  condition.s." 

The  provisions  of  section  11  the  bourse  considers  as  commendable  in  principle 
and  should  Ije  made  to  apply  to  all  vessels  under  the  American  flag. 

For  the  above  reasons  the  Philadelphia  Bourse  again  requests  and  expresses 
the  hope  the  bill  H.  II.  10500  may  be  reported  back  to  the  House  of  Representa- 
tives with  the  recommendation  tht  it  do  not  pass,  and  with  the  further  hope  that 
such  other  legislation  will  be  promptly  enacted  that  will  provide  for  an  imme- 
diate and  complete  revision  of  those  sections  of  our  navigation  laws  which  by 
their  restrictions  on  Aiuerican  ships  and  shipowners  enhance  the  cost  of  opera- 
tion of  vessels  under  the  American  flag,  believing  that  when  this  is  done  that 
there  will  be  ample  private  capital  ready  to  build  up  an  American  merchant 
marine  such  as  is  the  desire  of  every  good  citizen  of  this  Union. 

Respectfully  submitted  for  the  Philadelphia  Bourse. 

Geoege  E.  Baetol,  President. 

Attest : 

[SEAL.]  Emil  p.  Albrecht,  Secretary. 

The  Chairman,  We  have  quite  a  delegation  here  this  morning, 
some  representing  the  Chamber  of  Commerce  of  Nev^   York  and 


SHIPPING  BOARD^  jSTAVAL  AUXILIARY^  AND  MERCHANT  MARINE.     439 

others  from  the  New  York  Board  of  Trade  and  Transportation.  We 
want  to  give  everybody  a  fair  chance  to  be  heard. 

We  also  have  with  us  Mr.  Stuart  G.  Gibboney,  of  Barber,  Watson 
&  Gibboney,  hiwyers,  of  that  city.  Mr.  Gibboney,  I  think,  at  least 
two  weeks  ago  informed  me  he  wanted  to  be  heard  and  was  to  have 
been  here  last  week,  but  could  not  be  present  and  so  wired  me.  Later, 
I  told  him  to  be  here  this  morning,  and  I  feel  we  should  hear  him 
first. 

I  think  it  is  at  least  three  weeks  ago  that  I  notified  Mr.  Fahey,  then 
president  of  the  Chamber  of  Commerce  of  the  United  States,  to  be 
present  at  these  hearings  when  they  occurred — invited  him  in  person 
and  then  later  by  letter  notified  him  that  it  would  be  aggreeable  for 
him  to  appear  this  morning.  So,  if  there  is  no  objection,  we  will 
hear  him  second. 

Mr.  Khett,  who  is  president  elect  of  the  Chamber  of  Commerce  of 
the  United  States,  is  here,  and  I  understand  he  only  cares  to  make  a 
very  brief  statement. 

When  we  have  heard  these  gentlemen,  I  would  ask  Mr.  Bush,  of 
the  delegation  from  New  York,  to  arrange  the  order  in  which  the 
members  of  the  New  York  delegation  are  to  be  heard. 

STATEMENT  OF  STUART  G.  GIBBONEY,  ESQ.,  OF  BARBER,  WATSON 
&  GIBBONEY,  165  BROADWAY,  NEW  YORK,  N.  Y. 

Mr.  Gibboney.  I  am  a  member  of  the  firm  of  Barber,  Watson  & 
Gibboney,  counselors  at  law,  165  Broadway,  New  York.  I  am  gen- 
eral counsel  for  the  Hudson  Navigation  Co.,  and  I  am  also  general 
counsel  for  the  United  States  Steamship  Co.,  a  company  wiiich  is  now 
in  process  of  organization,  organized  under  the  laws  of  the  State 
of  Maine. 

The  Chairman.  T\Tio  are  the  officers  of  that  company  ? 

Mr.  Gibboney.  The  president  of  that  company  is  Mr.  George  E. 
Macomber,  of  Augusta,  Me.,  who  happens  to  be  president  of  the 
Augusta  Trust  Co.,  a  well-known  Maine  man.  Mr.  N.  H.  Campbell 
is  treasurer  of  that  company,  and  Mr.  White  is  the  secretary. 

The  Chairman.  Are  they  New  York  men? 

Mr.  Gibboney.  Mr.  White  and  Mr.  Campbell  are;  Mr.  Macomber 
is  a  Maine  man. 

I  will  be  very  brief,  gentlemen,  in  what  I  have  to  say.  I  have  not 
read  any  of  the  reported  hearings  of  this  committee  and  do  not  know 
what  has  been  said  here.  I  am  sorry  that  some  of  the  officers  and 
those  interested  in  our  company  are  not  here  to  speak,  instead  of 
myself.  Last  week  we  had  all  arranged  to  come  down  together,  but 
I  was  detained  by  the  trial  of  a  case  in  the  United  States  court  before 
Judge  Ray,  in  Albany,  and  could  not  get  away.  The  chairman,  how- 
ever, kincily  invited  me  to  come  here  this  morning.  What  I  say, 
however,  I  can  say  is  said  with  the  authority  of  the  companies  which 
I  represent,  and  after  consultation  with  them. 

The  Chairman.  What  is  the  Hudson  Navigation  Co.  ? 

Mr.  Gibboney.  The  Hudson  Navigation  Co.  is  a  company  that 
navigates  boats  on  the  Hudson  River  between  Troy,  Albany,  and 
NewYork  City.  That  is  a  company  which  has  not,  up  to  this  time, 
been  engaged  at  all  in  foreign  shipping,  although  we  are  subject  to  the 
Interstate  Commerce  Commission  and  our  rates  are  supervised  by  it. 


440      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

I  will  take  up  the  bill,  as  I  suppose  that  is  the  best  way  of  stating 
our  views. 

The  Chairman.  This  is  a  continuation  of  the  hearings  on  H.  E,. 
10500,  known  as  the  shipping  bill. 

Mr.  GiBBONEY.  Yes,  sir;  I  have  that  bill  before  me.  We  have  no 
suggestion  to  make  in  regard  to  the  first  section  there,  with  regard 
to  the  establishment  of  a  board,  except  it  seems  to  us  that  it  should 
provide  that  at  least  one  of  the  lay  members  of  the  board  should  be  a 
man  experienced  in  shipping  or  transportation  matters. 

Mr.  Edmonds.  Do  you  not  think  all  of  them  ought  to  be  experi- 
enced in  shipping  and  transportation  matters? 

Mr.  GiBBONEY.  I  doubt  if  you  will  be  able  to  get  them  at  the  price 
you  fix  for  the  salary. 

Coming,  now,  to  section  2,  it  seems  to  me  that  the  salaries  fixed 
there  are  too  small.  I  doubt  if  you  will  be  able  to  get  such  men  as 
will  perform  satisfactory  service  on  this  board  for  $10,000.  The 
Hudson  Navigation  Co.  operates  for  only  eight  months  in  the  year, 
and  we  pay  our  president  $18,000  a  year,  and  tfiat  is  a  fair  sample  of 
the  salaries  paid  to  shipping  men  in  New  York. 

The  Chairman.  Ten  thousand  dollars  is  the  salary  of  an  Inter- 
state Commerce  Commissioner,  and  I  expect  there  are  as  good  men 
on  that  commission  as  your  $18,000  man. 

Mr.  GiBBONEY.  That  is  very  true,  but  if  you  are  going  to  put  men 
experienced  in  shipping  on  this  board  that  is  a  very  different  matter. 
You  can  always  find  a  great  many  self-sacrificing  lawyers  to  give 
up  a  good  salary  for  the  honor  they  get. 

The  Chairman.  I  think  we  ought  to  get  some  people  representing 
the  people  at  large,  the  commercial  interests,  the  manufacturing  in- 
terests, and  the  agricultural  interests. 

Mr.  GiBBONEY.  I  think  so.  I  do  not  think  there  should  be  more 
than  one  real  shipping  man  on  here.  I  think  the  exporters  should 
have  a  man  on  there,  and  probably  the  shipbuilders.  I  think,  how- 
ever, that  could  be  left  to  the  discretion  of  the  President  in  selecting 
them,  but  I  think  one  man  should  be  a  practical  shipping  man. 

The  Chairman.  I  agree  with  you  there  entirely,  and  perhaps  more. 

Mr.  GiBBONEY.  There  is  nothing  else  in  that  section  on  which  we 
have  any  suggestions  to  make.  Coming  now  to  the  third  section, 
we  are  in  favor  of  that  section.  We  think  we  are  the  only  people 
who  have  been  making  an  honest  effort  to  develop  the  American 
merchant  marine  under  these  times,  and  we  are  not  afraid  of  any 
competition  by  the  Government  under  this  act  at  all.  We  have 
bought  since  last  November  14  ships,  for  which  we  have  paid  over 
$2,000,000,  and  which  we  are  sending  out. 

Mr.  Hardy.  Where  did  you  get  them? 

Mr.  GiBBONEY.  We  bought  them  all  around;  we  bought  them 
wherever  we  could  get  them.  We  bought  four  of  them  from  the 
Lakes,  when  the  railroads  had  to  sell  them  on  the  Lakes. 

Mr.  Hardy.  In  November? 

Mr.  GiBBONEY.  While  the  purchase  was  not  completed  until  Janu- 
ary, we  were  dickering  for  them  in  November  and  December. 

Mr.  Loud.  They  are  coming  down  in  the  spring? 

Mr.  GiBBONEY.  Yes,  sir.  Four  of  those  boats  we  bought  there, 
and  then  we  bought  three  from  the  Erie  Railroad  Co.  a  week  ago — 
the  J .  J.  McCuUough,  the  Shamonk,  and  the  Oswego. 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MEKCHANT  MAEINE.      441 

Mr.  Hardy.  How  large  boats  were  the}^? 

Mr.  GiBBONEY.  The  three  boats  we  bought  from  the  Erie  Railroad 
were  of  5,000  tons  dead-weight  capacity. 

Mr.  Haedy.  Ocean  going? 

Mr.  GiBBoxEY.  Two  are  ocean  going  and  one  coastwise.  These 
were  bought  just  10  days  ago.  We  bought  two  English  ships  in 
Halifax,  and  we  picked  them  up  here  and  there.  I  may  say  in  this 
connection  that  we  have  associated  with  us  Mr.  C.  W.  Morse,  who 
is  well  known  in  shipping  circles.  He  probably  knows  more  about 
the  boats  on  the  American  seaboard  than  any  other  man,  and  Mr. 
Morse  is  the  man  who  has  found  these  boats  and  bought  them  for  us 
largely.  In  this  connection  I  might  say  that  it  is  my  opinion  that 
if  the  ship-purchase  bill  of  last  3^ear  had  gone  through  and  the 
Government  had  bought  $50,000,000  worth  of  boats  the  Government 
by  this  time  would  have  made  $50,000,000. 

Mr.  Hardy.  Are  there  any  boats  lying  around  for  sale  now — do 
you  know? 

Mr.  GiBBoxEY.  Yes.  I  am  not  going  to  tell  you  where  they  are, 
because  we  are  going  to  try  to  buy  them;  but  I  think  that  close  on 
to  20  or  25  could  be  bought  to-day  if  you  knew  where  to  get  them. 

]\Ir.  Hardy.  What  size  boats? 

Mr.  GiBBOXEY.  They  average  between  4,000  and  5,000  tons  dead- 
weight capacity. 

Mr.  Ed:moxds.  Would  they  be  available  for  use  on  the  ocean? 

Mr.  GiBBOXEY.  Yes,  sir.  Some  of  the  vessels  that  we  bought  from 
the  Erie  Railroad  Co.  we  had  to  fix  up. 

Mr.  Edmoxds.  You  are  going  to  bring  them  down  and  load  them 
on  the  ocean? 

Mr.  GiBBOXEY.  We  are  bringing  two  of  them  down  now,  and  the 
other  is  in  dry  dock — the  *Shamonk.  Just  to  show  you  what  a  won- 
derful advance  there  has  been  in  the  price  of  these  boats,  when  we 
contracted  to  purchase  these  boats  from  the  Erie  Railroad  there  were 
three  boats — the  -/.  /.  McCidlovr/h^  which  is  a  coastwise  boat,  the 
Osiaefjfo,  and  the  ShamonJc.  The  president  of  the  Erie  Railroad  Co., 
who  carried  on  the  negotiations  with  our  company  for  the  boats 
raised  his  price  as  we  went  along,  and  we  thought  we  had  better  take 
them  as  quickly  as  we  could  get  them,  and  we  did.  But  during  the 
time  we  were  drawing  up  the  contract  for  the  Oswego.,  for  which 
we  paid  $325,000  (during  the  three  days  that  we  were  agreeing  on 
the  contract  or  the  negotiations),  we  had  an  offer  of  $450,000  for 
the  Oswego,  an  advance  of  $125,000  in  three  days. 

]\Ir.  Hardy.  High  finance. 

INlr.  GiBBox^EY.  Pligh  finance.  And  to-dav.  if  we  would  sell  her, 
I  believe  we  would  get  $500,000  for  her,  and  we  only  paid  $325,000 
for  her  10  days  ago. 

What  strikes  our  approval  in  the  matter  of  this  section  is  that  if 
this  bill  goes  through  we  will  want  to  come  in  and  offer  to  the  ship- 
ping board  to  take  100,000  tons  of  the  shipping  authorized  by  this 
bill  and  guarantee  to  pay  to  the  Govrenment  6  per  cent  on  it  net, 
and  we  would  like  to  get  100,000  tons  at  that  rate  and  operate  them, 
and  we  can  operate  them  at  a  profit. 

Mr.  Edmoxds.  Do  you  mean  you  can  do  that  two  years  from  now 
or  three  years  from  now  after  the  war  is  over? 


442      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  GiBBONEY.  After  the  war  is  over.  I  am  not  figuring  on  war 
prices  at  all;  because  to  show  you  the  enormous  profits  being  made 
out  of  shipping  at  the  present  time  and  the  abnormal  conditions 
that  prevail,  we  sent  out  three  boats  January  18,  February  7,  and 
February  8,  and  the  freight  that  we  received  from  the  cargoes  on 
those  three  boats  yielded  us  an  average  of  170  per  cent  profit  on  the 
purchase  price  of  the  boats. 

Mr.  Bruckner.  Where  did  they  go  ? 

Mr.  GiBBONEY.  One  of  them  went  to  Archangel  and  one  of  them 
to  Genoa,  and  they  were  loaded  with  timbers,  barbed  wire,  pig  iron, 
steel  rails,  etc. 

Mr.  Edmonds.  How  many  trips  have  they  made? 

Mr.  GiBBONEY.  This  is  their  first  trip. 

Mr.  Loud.  They  have  not  arrived  at  Archangel  yet  ? 

Mr.  GiBBONEY.  No ;  they  will  get  in  there  next  month.  It  is  a  re- 
markable statement  to  make,  gentlemen,  but  we  paid  for  those  boats 
on  the  first  trip  out  and  have  paid  100  per  cent  dividends  to  the 
stockholders  who  went  in  on  them  and  we  have  earned  170  per  cent 
net. 

Mr.  Byrnes.  Those  freights  are  being  charged  simply  because  you 
can  charge  them? 

Mr.  GiBBONEY.  Yes,  sir. 

Mr.  RowE.  These  are  tramp  steamers. 

Mr.  GiBBONEY.  Yes,  sir. 

Mr.  Byrnes.  If  we  can  get  through  this  bill  which  we  are  seeking 
to  pass,  of  course  you  would  not  be  allowed  to  charge  any  such  high 
rates  as  that? 

Mr.  GiBBONEY.  Certainly  not,  but  of  course  the  shipping  board 
would  have  to  take  into  consideration  the  supply  and  demand  when 
it  fixes  the  rates. 

Mr.  Byrnes.  Oh,  no ;  take  into  consideration  what  would  be  reason- 
able. 

Mr.  GiBBONEY.  That  is  perfectly  reasonable,  I  think.  We  are  will- 
ing to  submit  to  that. 

Mr.  Edmonds.  Can  you  get  insurance  to  Archangel? 

Mr.  GiBBONEY.  Yes,  sir. 

Mr.  Edmonds.  It  is  pretty  heavy  ? 

Mr.  GiBBONEY.  Yes,  sir ;  it  is  pretty  heavy.     I  forget  the  exact  rate. 

Mr.  Edmonds.  And  you  are  forced  to  charge  high  rates  then  in 
order  to  cover  heavy  insurance  charges  ? 

Mr.  GiBBONEY.  But  even  after  paying  insurance,  we  have  netted 
125  per  cent  profit  on  this  one  trip.  Now,  there  is  a  prevailing  im- 
pression that  no  ships  can  be  built  in  this  country  at  the  present 
time.  That  is  not  true.  I  was  told  by  Mr.  Bruckner  this  morning 
that  the  Secretary  of  the  Treasury  made  that  statement  the  other  day. 
But  I  am  up  against  this  shipping  proposition  every  day,  and  my 
company  has  bought  a  shipyard  within  the  last  two  months  at  Noank, 
Conn.,  within  135  miles  of  New  York  City.  We  are  building  there 
six  boats  at  the  present  time,  and  if  this  bill  goes  through  we  will 
be  in  a  position  to  contract  with  the  Government  for  nine  boats, 
which  we  will  agree  to  complete  within  18  months,  of  5,000  tons  each. 

Mr.  Bruckner.  I  have  been  told  that  no  shipyard  will  accept  an 
order  for  delivery  in  less  than  three  years. 


SHIPPING  BOAKD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     443 

Mr.  GiBBONEY.  We  will  take  an  order  to-morrow  morning  if  we 
can  get  one  for  nine  of  these  boats. 

Mr.  Greene.  What  company  is  that  you  are  referring  to  ? 

Mr.  GiBBONEY.  Robert  Palmer  &  Sons,  Noank,  Conn.,  which  is 
about  135  miles  from  New  York  City,  and  10  miles  from  New  London. 

Mr.  Bruckner.  A  new  concern? 

Mr.  GiBBONEY.  No ;  an  old  concern. 

Mr.  Greene.  Have  they  been  actively  engaged  in  business  all  the 
time? 

Mv.  GiBBONEY.  They  have  not  been  actively  in  business  for  the 
last  10  years.  There  have  been  a  great  many  shipyards  that  have 
not  been  active.  But  they  are  at  the  present  time,  and  we  are  build- 
ing six  boats  there.  We  took  over  those  boats  and  agreed  to  com- 
plete the  contract,  and  we  have  a  capacity  for  nine  more  boats, 
which  we  can  and  will  build  if  we  can  get  the  orders  for  them.  I 
will  say  also  that  we  have  under  option  a  shipyard  not  farther  than 
100  miles  from  Washington,  where  we  will  be  able  to  undertake  a 
contract  for  the  completion  of  10  boats,  which  we  can  build  in  two 
years'  time.  We  intend  to  exercise  our  option  on  that  yard  if  this 
bill  goes  through,  because  we  think  there  wall  be  a  demand  created 
for  the  building  of  ships  by  this  bill,  and  we  would  like  to  get  in 
and  build  some  of  the  ships  for  the  Government  under  these  cir- 
cumstances. 

Mr.  Burke.  In  corroboration  of  your  statement  as  to  the  activities 
in  shipping,  I  w^ould  say  that  about  three  weeks  ago  the  Norwegian 
Government  or  a  Norwegian  firm  let  a  contract  for  the  building  of 
two  5,000-ton  merchant  ships  at  Manitow^oc,  on  the  w^est  shore  of 
Lake  Michigan,  in  my  State.  I  merely  cite  that  as  showing  there 
are  chances  still  existing  to  let  shipping  contracts. 

Mr.  GiBDONEY.  I  think  there  is  no  doubt  about  it,  sir.  But  I  think 
there  is  so  little  real  information  about  this  whole  shipping  business 
from  practical  men  who  are  up  against  the  shipping  proposition. 
The  real  reason  we  have  not  a  merchant  marine,  gentlemen,  is  just 
one 

Mr.  Saunders.  That  is  what  I  have  been  trying  to  get  at  for  a 
long  time.    What  is  that  one  reason?     [Laughter.] 

Mr.  GiBBONEY.  My  opinion  may  not  be  worth  much,  but  it  is  this, 
because  of  the  difficulty  in  financing  in  this  country  any  proposition 
of  this  kind. 

Mr.  Saunders.  Just  one  purely  of  financing? 

Mr.  GiBBONEY.  Purely  one  of  financing,  in  my  opinion. 

Mr.  Saunders.  The  field  is  there? 

Mr.  GiBBONEY.  The  field  is  there. 

Mr.  Saunders.  The  opportunity  for  profit  is  there  ? 

Mr.  GiBBONEY.  The  opportunity  for  profit  is  there. 

Ml.  Saunders.  And  there  are  no  difficulties  of  legislation  in  the 
way? 

Mr.  GiBBONEY.  No.  sir. 

Mr.  Saunders.  It  is  just  one  of  financing? 

Mr.  GiBBONEY.  Yes,  sir.  All  this  poppycock  talk  about  the  La 
Follette  bill  has  not  prevented  us  from  earning  170  per  cent  profits. 

Mr.  Greene.  But  conditions  are  now  are  abnormal. 


444     SHIPPIISG  BOARD,  NAVAL  AUXILIARA',  AND  MERCHANT  MARINE. 

Mr.  Gibbon EY.  Of  course,  in  normal  conditions  such  tremendous 
profits  Avould  not  be  there. 

Mr.  Saunders.  Then  I  gather,  Mr.  Gibboney,  from  what  you  say, 
really  what  we  needed  at  the  beginning  of  this  war,  more  than  any- 
thing else,  more  than  shipping,  is  that  portion  of  the  bill  which 
would  have  allowed  us  to  curb  and  control  these  outrageous  rates 
which  have  been  charged  by  shipowners? 

Mr.  Gibboney.  I  do  not  get  that. 

Mr.  Saunders.  I  say,  what  we  needed  more  than  anything  else  at 
the  beginning  of  this  war  was  that  portion  of  the  bill  Avhich  would 
have  allowed  us  to  control  these  outrageous  rates  which  the  shipping 
people  have  been  charging.  If  we  had  had  that  we  would  not  have 
been  sufi'ering  from  imposition  in  the  way  of  these  destructive  rates 
you  have  been  telling  us  about. 

Mr.  Gibboney.  There  would  not  have  been  the  demand  for  ships 
if  there  had  not  been  the  high  prices  for  freight;  there  would  not 
have  been  as  much  export  freight  carried  at  a  lower  rate,  of  course, 
as  there  has  been  at  the  higher  rate. 

Mr.  Saunders.  Do  j'ou  mean  to  say  if  the  rates  had  been  curbed, 
then  we  would  not  have  had  the  export? 

Mr.  Gibboney.  I  think  there  would  not  have  been  as  much  capital 
gone  into  the  shipping  business. 

I  should  like  to  point  out,  in  this  connection,  that  I  wrote  an 
article  for  the  Engineering  Magazine,  in  January,  the  title  of  which 
was  "  The  pressing  need  for  a  merchant  marine."  I  made  the  charge 
in  that  paper — and  a  great  many  newspapers  in  New  York  threw 
conniption  fits — I  made  the  charge  in  that  article  that  one  is  driven 
to  the  conclusion  that  if  Wall  Street  could  not  get  well-watered 
stock  in  that  corporation  or  else  a  plan  for  a  ship  subsidy  it  would 
not  play  the  game.  A  lot  of  newspapers  in  Xew  York  threw  connip- 
tion fits  about  that  statement,  but  since  I  read  the  bill  which  has  been 
introduced  on  behalf  of  the  chamber  of  commerce  as  T  was  coming 
doAvn  on  the  train  last  night  I  see  that  what  they  were  doing  Avas 
playing  for  a  ship  subsidy. 

Of  course  we  are  in  the  shipping  business,  and  if  there  are  going  to 
be  any  subsidies  paid  we  will  take  whatever  comes  our  way. 

The  Chairman.  You  want  your  share,  of  course. 

Mr.  Gibboney.  AYe  want  our  share.  At  the  same  time  we  realize 
such  a  bill  has  no  chance  in  this  Congress,  and  we  are  anxious  to 
see  any  bill  go  through  which  will  tend  to  stimulate  the  development 
of  our  merchant  marine  and  the  building  of  more  ships ;  and  as  it  was 
necessary  for  the  Government  to  finance,  so  to  speak,  the  first  trans- 
continental railway  we  are  right  back  in  that  situation  to-day.  We 
need  the  Government  to  help  us  finance  and  put  on  its  feet  this  tot- 
tering industry.  In  that  connection,  I  should  like  to  see  this  bill 
contain  a  provision  for  a  shipping  board-  to  take  the  minority  stock 
in  a  corporation — preferred  stock,  if  you  will — under  the  supervision 
of  the  shipping  board,  and  I  should  like  further  to  see  the  shipping 
board  loan  money  on  mortgage  on  vessels  and  to  have  a  clause  in 
there  that  in  such  cases  the  Government  had  a  right  to  take  over  the 
boat  in  time  of  war  for  a  naval  auxiliary. 

Mr.  Bruckner.  Do  you  think  private  capital  will  take  stock  in  this 
corporation? 

Mr.  Gibboney.  In  which  corporation — in  my  corporation? 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      445 

Mr.  Bruckner.  No;  in  this  corporation. 

Mr.  Edmonds.  The  Government  owning  a  majority  of  the  stock, 
you  mean? 

Mr.  GiBBONEr.  Yes;  but  it  will  have  to  be  popular  subscription. 
You  never  could  get  it  from  the  ordinary  banking  channels  in  New 
York.  Those  fellows  won't  bu}^;  you  will  have  to  get  it  through 
popular  subscription. 

Mr.  Bruckner.  How  is  it,  Mr.  Gibboney,  that  the  American  capi- 
tal, which  is  so  anxious  to  invest  in  money-making  enterprises,  does 
not  want  to  invest  in  the  shipping  enterprise? 

Mr.  GiBBONET.  It  is  a  new  business. 

Mr.  Bruckner.  Shipping  is  new  ? 

Mr.  Gibbon EY.  The  American  banker  is  about  the  most  conserva- 
tive man  I  know  of. 

Mr.  Bruckner.  It  is  the  bank;  not  necessarily  the  banker? 

Mr.  Gibboney.  It  is  purely  a  question,  it  seems  to  me,  of  getting 
money.  If  you  can  get  the  ships,  and  if  you  can  get  the  freight  to 
carry  at  a  profit,  and  you  can  show  you  cai\  make  money,  then  it 
becomes  purely  a  question  of  finance. 

Mr.  Bruckner.  That  has  been  shown? 

Mr.  Gibboney.  Yes. 

Mr.  Greene.  Will  3^011  please  tell  me  what  the  capital  stock  of 
your  corporation  is? 

Mr.  Gibboney.  $25,000,000. 

Mr.  Greene.  $25,000,000? 

Mr.  Gibboney.  Yes. 

Mr.  Greene.  You  incorporated  under  the  laws  of  the  State  of 
Maine? 

Mr.  Gibboney.  Yes,  sir. 

Mr.  Greene.  Why  do  you  incorporate  under  the  laws  of  the  State 
of  Maine? 

Mr.  Gibboney.  The  president  of  the  company  is  a  Maine  man. 

Mr.  Greene.  Oh,  I  know;  but  that  is  always  so  of  those  jNIaine 
corporations.  Some  officer  has  to  be.  You  incorporate  in  the  State 
of  Maine — why  do  you  not  incorporate  in  the  State  of  New  York? 

Mr.  Gibboney.  I  may  say,  in  that  connection,  that  our  company  is 
in  process  of  formation.  And  we  are  also  incorporating  a  company 
(so  as  to  preserve  the  name)  under  the  name  of  New  York.  You 
see,  the  scheme  we  are  working  is  prefect]}^  simple;  we  buy  a  boat 
for  $325,000,  and  we  organize  a  company  under  the  name  of  that 
boat  and  we  issue  a  share  of  stock  for  $100  for  every  $100  put  in 
that  boat. 

Mr.  Greene.  And  there  is  no  personal  liability  in  those  Maine 
corporations. 

The  Chairman.  That  seems  to  be  the  way  they  incorporate  those 
companies  now. 

i\Ir.  Gibboney.  We  have  a  number  of  ships,  and  as  the  same  stock- 
holders have  gone  in  practically  all  of  these  boats,  we  ai'e  g^ing  to 
suggest  a  scheme  of  consolidating  all  of  those  companies  into  one 
line  for  the  purpose  of  economv. 

Mr.  EoAVE.  You  mean  a  holding  company? 

Mr.  Gibboney.  No;  not  by  a  holding  company  at  all,  but  to  take 
over  the  boats. 

32910—16 29 


446      SHIPPING   BOAKD^  NAVAL  AUXILIARY,  AND  MEKCHANT  MARINE. 

Mr.  Edmonds.  Do  you  mean  to  say  that  if  you  buy  a  boat  for 
$325,000,  you  capitalize  that  for  $325,000? 

Mr.  Gibbon EY.  Yes,  sir. 

Mr.  Edmonds.  And  then  you  sell  stock  for  $325,000? 

Mr.  Gibbon ET.  Absolutely. 

Mr.  Bruckner.  Each  boat  is  separate? 

Mr.  Gibbon  EY.  Each  boat  has  been  separately  incorporated.  We 
have  bought  altogether  14  boats. 

Mr.  Bruckner.  And  you  have  14  different  corporations? 

Mr.  Gibboney.  Fourteen  different  JState  corporations  with  practi- 
cally the  same  stockholders. 

Mr.  Bruckner.  Are  any  of  those  corporations  formed  in  New 
York? 

Mr.  Gibboney.  They  are  all  formed  in  New  York. 

Mr.  Edmonds.  Each  company  is  going  to  take  stock  in  the  consoli- 
dated company  and  to  pay  100  per  cent  for  the  stock  which  it  sub- 
scribes ? 

Mr.  Gibboney.  Our  company  is  the  United  States  Steamship  Co. 
Our  scheme  is  perfectly  simple;  it  does  not  contravene  any  trust 
laws ;  we  have  carefully  looked  into  that,  and  it  does  not  contravene 
the  Clayton  Act.  Our  plan  is  to  propose  to  the  stockholders  in  these 
various  boats  that  they  turn  in  their  stock  and  take  slock  in  the 
United  States  Steamship  Co.  for  their  boat. 

Mr.  Edmonds.  There  will  not  be  any  water  in  the  United  States 
Steamship  Co.? 

Mr.  Gibboney.  No,  sir ;  we  do  not  propose  to  have  any  water  in  the 
United  States  Steamship  Co. 

Mr.  Edmonds.  Mr.  Morse  is  at  the  head  of  it? 

Mr.  Gibboney.  Mr.  Morse  is  one  of  a  number  of  men  in  it. 

Mr.  Edmonds.  That  same  Mr.  Morse  was  in  steamship  companies 
along  the  coast  some  time  ago? 

Mr.  Gibboney.  He  was. 

Mr.  Edmonds.  There  was  plenty  of  watered  stock  then,  was  there 
not? 

Mr.  Gibboney.  I  was  not  familiar  with  those  operations.  I  know 
there  is  no  water  now. 

In  this  connection,  gentlemen,  in  regard  to  section  4,  we  think  it  is 
a  very  salutary  provision  here  to  provide  for  the  leasing  of  vessels. 
The  minute  the  Government  has  500,000  tons  of  boats  it  would  have 
no  difficulty  in  leasing  them  at  all;  and  it  could  get,  I  think,  a  net 
rental  of  6  per  cent  on  those  boats  without  any  question. 

Mr.  Curry.  Do  you  think  the  Government  ought  to  go  into  that 
business  for  the  purpose  of  keeping  freight  rates  up? 

Mr.  Gibboney.  No,  not  for  the  purpose  of  keeping  freight  rates  up. 
The  shipping  board  is  for  the  purpose  of  keeping  rates  down,  as  I 
understand  it. 

Mr.  Curry.  If  they  are  going  to  lease  those  ships  for  as  much  as 
they  can  get  for  them,  is  it  not  going  to  keep  the  freight  rates  up? 

Mr.  Gibboney.  No  ;  I  think  if  the  Government  leases  the  boats  at 
6  per  cent,  and  woulcl  increase  the  tonnage,  the  freight  rates  would 
automatically  go  down.  If  the  Government  could  put  out  to-morrow 
500,000  tons  of  ships  and  lease  them  to  individuals  you  would  see  the 
freight  rates  go  doAvn  pretty  fast. 


SHIPPING  BOARD,  NAVAL  AUXILIARV,  AND  MERCHANT  MARINE.      447 

Mr.  CuuRT.  Who  would  lease  them — the  people  running  the  ships 
now  ? 

Mr.  GiBBONEY.  The  people  running  the  ships  now ;  or  people  might 
go  into  the  business. 

Mr.  Curry.  And  you  think  they  are  going  to  reduce  the  freight 
rates  because  they  lease  from  the  Government? 

Mr.  GiBBONEY.  No;  not  because  they  lease  from  the  Government^ 
but  because  I  think  there  would  be  more  ships  to  carry  the  export, 
trade. 

Mr.  Curry.  If  you  had  double  the  number  of  ships,  you  could  not 
carry  it? 

Mr.  GiBBONEY.  If  we  had  500,000  tons  Ave  could  not  carry  all  the? 
freight — is  that  your  statement? 

Mr.  Curry.  Yes ;  that  is  my  statement. 

Mr.  GiBBONEY.  I  think  that  statement  is  correct.  But  if  you  had 
500,000  tons  of  boats  you  would  have  that  many  more  boats  and 
consequently  that  much  less  export  per  boat. 

Mr.  Curry.  Those  same  people  would  lease  those  ships,  those 
people  who  are.  without  rhyme  or  reason,  keeping  the  rates  up,  if 
we  had  some  ships  to  lease  from  the  Government.  Because  they 
lease  from  the  Government,  they  would  reduce  the  freight  rates? 

Mr.  GiBBONEY.  Oh,  no;  they  would  not  do  that  at  all. 

Mr.  Curry.  Certainly  they  would  not. 

Mr.  GiBBONEY.  But  you  would  increase  the  number  of  ships  and 
automatically  decrease  the  rate  per  ship. 

The  Chairman.  The  provisions  I  want  you  to  keep  in  mind  are 
the  provisions  of  section  8  of  this  bill,  that  such  a  situation  as  that 
could  not  exist  in  the  event  the  Government  operated  those  boats; 
that  is.  a  Government-controlled  corporation. 

Mr.  GiBBONEY.  Exactly. 

Mr.  Curry.  Mr.  Chairman,  that  is  what  I  wanted  him  to  admit, 
but  he  would  not.  The  commission  could  also  control  the  freight 
rates  on  privately  owned  ships. 

Mr.  GiBBONEY.  I  had  that  in  mind. 

The  Chairman.  Some  people  want  that  section  out  of  the  bill. 
If  it  was  out  of  the  bill  they  would  have  the  Government  at  their 
mercy.  As  long  as  that  stays  in  the  Government  could  compel  decent 
treatment  for  the  people. 

Mr.  GiBBONEY.  You  can  not  blame  those  people,  who  are  not  in 
business  for  their  health  in  New  York,  for  getting  all  they  can  out 
of  these  boats. 

The  Chairman.  I  think  their  appetite  is  always  keen  for  profit. 

Mr.  GiBBONEY.  Their  appetite  is  always  keen  for  profit.  I  have- 
never  seen  a  New  Yorker  yet  who  was  opposed  to  making  money. 

Mr.  Loud.  You  could  not  get  any  relief  from  the  boats  you  Avould 
buy.     You  could  only  get  relief  from  the  boats  you  would  build. 

Mr.  GiBBONEY.  If  this  bill  passed  to-morrow  you  could  get  some- 
boats. 

Mr.  Loud.  How  Avculd  that  relieve  the  situation  when  they  are- 
already  in  the  traffic? 

Mr.  GiBBONEY.  Those  boats  are  not  in  the  traffic  now. 

Mr.  Bruckner.  Where  are  thev  now  ? 


448      SHIPPING  BOARD^  XAVAL  AUXILIARY^  AND  MERCHANT  MARINE. 

Mr.  GiBBONEY.  I  am  not  going  to  tell  where  those  boats  are,  be- 
cause we  want  to  get  them  ourselves,  and,  in  fact,  we  are  negotiating 
for  them  at  the  present  time. 

Mr.  RoDENBURG.  An  owner  of  a  boat  who  would  not  put  the  boat 
in  the  traffic  now,  when  we  are  making  these  enormous  profits,  ought 
to  have  his  head  examined. 

Mr.  GiBBONEY.  I  think  so.  too. 

Mr.  Bruckner.  You  are  sincere  in  your  statement  that  there  are 
those  boats  to  be  had  ? 

Mr.  GiBBONEY.  Yes;  there  is  a  limited  number.  According  to  my 
figures,  there  are  about  $2,500,000  worth  of  boats. 

Mr.  Saunders.  Will  you  just  tell  us  in  that  connection  why,  with 
the  opportunities  you  have  described  here  this  morning,  $2,500,000 
worth  of  boats  are  idle? 

Mr.  GiBBONEY.  That  is  because  people  do  not  know  where  they  are, 
or  else  it  is  difficult  to  finance. 

Mr.  Saunders.  But  the  people  who  own  the  ships  know.  Are  they 
not  aware  of  the  enormous  profits  that  are  present  just  now? 

Mr.  GiBBONEY.  Yes;  and  they  are,  of  course,  trying  to  sell  them. 
Take  the  Erie  Railroad  boats;  why  did  not  somebody  else  get  in 
there  10  days  ago  and  buy  those  boats?  We  bought  them  only  10 
days  ago.  You  see,  a  large  number  of  those  boats  are  on  the  market 
by  reason  of  the  Panama  Canal  act,  and  the  railroads  have  to  divorce 
their  connection  with  the  steamship  lines,  and  a  great  many  boats 
are  on  the  market  for  that  reason.  All  of  those  Lake  boats  are' on  the 
market  for  that  reason,  of  course. 

The  Chairman.  I  noticed  a  statement  the  other  day  that  a  $20,- 
000,000  corporation  had  been  formed  to  take  over  those  boats  that 
the  railroads  on  the  Lakes  were  compelled  to  give  up. 

Mr.  GiBBONEY.  That  is  all  true.  We  know  all  about  that,  sir;  and 
we  are  bidding  for  those  very  boats  and  bought  four  of  them. 

The  Chairman.  That  is  a  distinct  corporation  from  yours? 

Mr.  GiBBONEY.  That  is  a  distinct  corporation  from  ours;  that  is 
Mr.  Connor's  corpoi-ation  in  Buffalo. 

Mr.  Saunders.  It  seems  to  me  an  arrangement  would  have  been 
made  to  take  those  boats  up  as  soon  ns  they  got  a  chance. 

Mr.  GiBBONEY.  They  have  been  on  the  market  since  the  1st  of 
December. 

Mr.  RowE.  They  are  actually  wanted  in  commerce  on  the  Lakes? 

Mr.  GiBBONEY.  Yes,  sir. 

Mr.  RowE.  And  they  are  simply  taking  them  out  of  the  commerce 
on  the  Lakes  and  putting  them  on  the  ocean? 

Mr.  GiBBONEY.  Mr.  Connor  contemplates  keepins:  them  there. 

Mr.  RowE.  I  mean  yourself;  you  have  taken  them  off  the  Great 
Lakes? 

Mr.  GiBBONEY.  No,  sir ;  we  have  got  three  that  are  going  to  operate 
there.  We  bought  four  from  the  same  company  that  Mr.  Connor 
did. 

Mr.  Bruckner.  But,  Mr.  Gibboney,  that  does  not  relieve  the  situa- 
tion.   Those  same  boats  are  engaged  in  that  traffic. 

Mr.  GiBBONEY.  No;  that  does  not  relieve  the  situation;  there  is 
probabl}^  a  greater  demand  on  the  Lakes  to-day  than  ever  before. 


SHIPPING  BOARD,  KAVAL  AUXILIAKV,  AND  MERCHANT  MARINE.      449 

Mr.  Saunders.  The  only  way  to  relieve  the  situation  is  to  get  those 
boats  that  are  idle  from  the  owners  who  do  not  seem  to  have  scnsQ 
enough  to  know  a  good  thing  when  they  see  it. 

Mr.  GiBBONEY.  We  bought  14  boats  since  the  middle  of  November, 
showing  you  that  we  can  buy  boats. 

Mr.  Edmonds.  Were  all  of  those  boats  in  operation  when  yon 
bought  them? 

Mr.  GiBBONEY.  Practically  none  of  them. 

Mr.  Edmonds.  They  were  bought  on  the  Great  Lakes? 

Mr.  GiBBONEY.  No;  they  were  not  all  on  the  Great  Lakes. 

Mr.  Edmonds.  Where  were  they;  on  the  ocean? 

JMr.  GiBBONEY,  Sticking  in  shipyards  here  and  there,  all  the  way 
from  Halifax  to  Baltimore. 

Mr.  Edmonds  Had  they  been  in  operation  at  all  since  the  war 
started? 

Mr.  GiBBONEY.  Some  of  them  had  and  some  of  them  had  not.  Two 
of  them  were  English  boats,  which  we  got  in  Halifax,  Nova  Scotia; 
we  got  one  boat  from  the  Merchants'  and  Miners'  Transportation  Co. 
here  in  Baltimore.  We  just  picked  them  up  wherever  we  could  find 
them. 

Mr.  Edmonds.  The  reason  they  were  not  in  operation  was  because 
they  Avere  physically  unable  to  operate  them  on  account  of  repairs 
or  something  like  that? 

Mr.  GiBBONEY.  No.  In  the  first  place,  you  have  to  have  a  place  in 
New  York  where  you  can  assemble  your  freight;  you  have  to  have 
a  dock:  you  have  to  be  able  to  connect  with  the  man  who  wants  to 
ship  stuff.  And  just  any  fellow  down  in  Norfolk  or  up  in  Baltimore 
can  not  pick  up  a  boat  and  run  into  a  fellow^  on  the  street,  you  know, 
and  get  cargo  for  his  ship.  We  own  our  own  dock  in  New  York 
City.^ 

Mr.  Edmonds.  Your  statements  do  not  connect  at  all,  because  you 
made  the  statement  here  that  the  demand  for  ocean  tonnage  was 
enormous. 

Mr.  GiBBONEY.  It  is. 

Mr.  Edmonds.  And  yet  here  are  these  ships  that  could  make  100 
per  cent  profit  on  a  single  voyage  lying  around,  and  the  men  do  not 
know  what  to  do  with  them.  If  you  are  making  that  amount,  I 
think  you  could  almost  run  into  a  man  on  the  street  and  get  cargo, 

Mr.  GiBBONEY.  We  bought  14  of  them. 

Mr.  Edmonds.  I  understand  perfectly  well  that  you  did. 

Mr.  GiBBONEY.  And  they  had  been  on  the  market  for  three  months, 
And  we  will  buy  the  rest  of  them.  We  will  take  every  boat  available 
for  ocean  transportation  that  can  be  bought  to-day. 

Mr.  Edmonds.  And  so  will  a  great  many  people. 

Mr.  GiBBONEY.  Certainly. 

The  Chairman.  We  are  not  making  any  headway  talking  about 
that. 

Mr.  GiBBONEY.  I  will  be  very  brief.  Of  course,  it  is  not  for  me 
to  say  what  the  advantages  might  be  to  the  Government  for  having 
navai  auxiliaries.  That,  it  seems  to  me,  is  self-evident ;  and  that  these 
boats  could  be  profitably  handled  there  is  not  any  doubt,  in  time  of 
peace,  in  the  merchant  marine. 


450      SHIPPING  BOAKD.  XAVAf,  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Loud.  The  Navy  Depai-tment  insists  they  have  no  auxiliaries 
to  spare. 

Mr.  Gibbon EY.  I  say  these  very  boats  could  be  taken  from  the 
marine  transportation  and  turned  into  naval  auxiliaries  under  the 
terms  of  this  bill. 

Mr.  Loud.  You  are  not  speaking  of  the  ones  we  already  have. 

]Mr.  GiBBONEY.  No,  sir. 

Mr.  Bruckner.  Did  I  understand  you  to  say  you  bought  two 
English  boats? 

Mr.  GiBBONEY.  Yes,  sir. 

Mr.  Bruckner.  How  did  they  get  American  registry? 

Mr.  Gibbon  EY.  We  did  not  put  them  under  x\merican  registry; 
Ave  left  them  in  the  English  registry. 

Mr-  Bruckner.  Then  they  are  not  flying  the  American  flag? 

Mr.  GiBBONEY.  No,  sir.  We  have  12  beats  now  under  the  Amer- 
ican flag  and  two  under  the  English  flag.  In  that  connection,  I 
might  say  you  can  buy  an  'English  boat  at  about  80  per  cent  of  wdiat 
you  have  to  pay  for  an  American  boat  to-day.  In  other  Avords,  the. 
additional  risk  and  other  things  are  figured  by  the  shipowners  to  be 
about  -20  per  cent  in  favor  of  tha  American  registered  boat. 

As  to  the  prices  paid  for  these  boats,  we  paid  all  the  way  from  $25 
a  ton  up  to  $100  a  ton.  I  think  probably  $100  a  ton  is  about  the 
market  price  to-day  on  the  ocean-going  boat  in  New  York. 

Mr.  Saunders.  What  was  the  price  per  ton  before  the  war  broke 
out,  approximately  ? 

Mr.  GiBBONEY.  it  would  depend  a  great  deal  on  the  boat,  of  course. 

Mr.  Saunders.  I  understand. 

Mr.  GiBBONEY.  I  should  say  that  a  boat  to-day  selling  for  $100  a 
ton  could  be  bought  before  the  w^ar  at  $60,  as  an  average;  maybe 
$50. 

Mr.  Saunders.  And  that  is  all  the  advance  that  has  occurred  in 
spite  of  the  enormous  possibilities  of  profit  that  has  been  going  on 
and  are  still  going  on? 

Mr.  GiBBONEY.  They  are  going  up  every  day.  Only  recently  they 
have  been  jumping  by  leaps  and  bounds,  which  I  illustrated  in  the 
purchase  of  those  Erie  Railroad  Co.  boats.  Just  to  give  you  an  idea 
of  the  tonnage,  I  have  made  this  memorandum  of  boats,  and  cargoes, 
and  freights  we  are  getting.  Where  ordinarily  $8  per  ton  was  paid 
before  the  war  to  Genoa,  to-day  we  are  getting  $50  a  ton,  and  where 
ordinarily  $12  was  paid  for  freight  to  Archangel,  to-day  we  are  get- 
ting $100  a  ten,  and  it  is  going  up  at  the  rate  of  100  per  cent  a  week. 

Mr.  Greene.  Who  pays  the  freight? 

Mr.  GiBBONEY.  The  shipper  of  the  goods,  and  he  pays  it  before 
"the  boat  leaves  the  harbor. 

Mr.  Greene.  So  that  the  freight  is  added  to  the  cost  of  the  goods 
and  the  buyer  pays  it? 

Mr.  GiBBONEY.  Of  course ;  at  the  other  end. 

As  I  said  before,  the  necessity  for  this  bill  is  purely  a  question  of 
finance.  You  have  to  educate  the  American  banker  and  make  him 
realize  that  there  is  a  great  field  here.  And  the  Government  has  to 
do  it  because  w^e  waited  for  70  years  for  them  to  get  into  the  field 
and  they  have  not  done  it  and  never  will. 

We  should  like  to  see  put  into  this  bill,  as  I  said  before,  a  pro- 
vision that  the  Government  might  take  the  minority  stock  in  the 


SHIPPIX:;  IICAKD,  NAVAI.  AUX1!.1AK V,  AND  MERCHANT  MARINE,      451 

corporation — preferred  stock,  if  you  will — so  that  they  would  be 
sure  of  getting  their  dividends. 

Mr.  Saunders.  Let  me  ask  you  a  business  question.  You  take  a 
ship  wdiich  the  Government  buys  for  a  million,  which  it  leases  to  you, 
we  will  say,  under  the  proposition  that  you  say  you  are  willing  to 
make — that  you  are  willing  to  give  the  Government  6  per  cent  on 
that. 

Mr.  Gibbon ET.  Yes,  sir. 

Mr.  Saunders.  Would  that  interest  of  6  per  cent  on  a  million- 
dollar  ship  provide  the  Government  not  only  with  a  profit  on  its 
money,  but  take  care  of  the  gradual  decline  in  value  of  the  ship  from 
year  to  year  to  replace  it? 

Mr.  Gibboney.  You  mean  a  sinking  fund? 

Mr.  Saunders.  Yes;  to  take  care  of  its  decline  in  value. 

Mr.  Gibboney.  I  think,  probably,  the  shipping  board  would  have 
to  work  out  some  scheme  for  laying  aside  a  sinking  fund,  and  either 
have  the  lessee  of  the  ship  pay  that  or  have  some  fair  adjustment 
between  the  Government  and  the  lessee. 

Mr.  Saunders.  As  a  business  proposition.  G  per  cent  would  not 
do  it? 

Mr.  Gibboney.  No,  sir;  I  do  not  think  it  would. 

Mr.  Saunders.  You  have  to  have  in  mind,  if  you  go  into  the  busi- 
ness as  a  capitalist — if  you  go  into  the  shipping  business — such  earn- 
ings on  that  ship  as  will  not  only  give  you  a  dividend,  but  will  replace 
it;  in  other  words,  will  provide  a  sinking  fund. 

Mr.  Gibboney.  Yes. 

Mr.  Rodenberg.  What  percentage  do  the  shipowners  provide  for 
that? 

Mr.  Gibboney.  That  depends  on  the  boats.  Most  of  those  boats 
we  bought  have  been  very  old  boats;  but  if  j^ou  started  out  with  a 
new  boat  it  would  be  an  entirely  different  proposition,  of  course. 
Then  you  would  have  to  figure  on  what  the  life  of  the  boat  would  be 
under  ordinary  circumstances. 

Mr.  Saunders.  I  will  renew  my  question.  If  you  put  your  money 
in  a  vessel  you  have  to  have  in  mind  those  considerations. 

Mr.  Gibboney.  Certainly. 

Mr.  Saunders.  Then,  having  in  mind  a  new  ship,  if  the  Govern- 
ment buys  a  new  ship  at  a  million  dollars  which  it  proposes  to  lease 
to  you,  you  say  you  are  willing  to  take  that  from  the  Government  at 
6  per  cent? 

Mr.  Gibboney.  Yes,  sir. 

Mr.  Saunders.  But  that  does  not  save  the  Government  harmless 
in  its  investment  in  that  ship.  According  to  the  accepted  rates  of  the 
business  world,  what  ought  the  Government  charge  in  order  to  pro- 
vide a  sinking  fund? 

Mr.  Gibboney.  You  would  have  to  figure  it  out,  to  figure  the  price 
of  the  ship  and  figure  the  amount  of  capital  invested  in  the  ship,  and 
then  you  could  very  easily  figure  the  amount  to  be  set  aside  each  year. 

Mr.  Saunders.  I  know  we  have  to  do  all  that,  but  what  I  am  try- 
ing to  get  at,  Mr.  Gibboney,  is  for  you  to  tell  me  as  nearly  as  j^ou  can, 
approximately,  what  that  will  be.  That  is  what  I  am  trying  to  get 
in  the  record. 


452      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  GiBBONEY.  Taking  a  5,000-ton  boat,  which  is  the  most  sensible 
boat  for  the  Government  to  build  under  the  bill,  because  that  is  the 
most  easily  chartered  ship,  I  should  say,  with  a  new  boat,  the  life  of 
it  ought  to  be  certainly  40  or  50  years. 

Mr.  Saunders.  Say  40  years, 

Mr.  GiBBONEY.  Yes;  take  it  at  40  years.  You  can  figure  out  the 
cost  of  that  boat,  which  will  be  in  ordinary  times  probably  $75  per 
ton.    And  then  it  is  a  pure  question  of  mathematical  calculation. 

Mr.  Saunders.  I  am  figuring  that  the  Government  has  bought  it 
in  normal  times  and  paid  a  million  dollars  for  it. 

The  Chairman.  A  million  dollars  for  a  5,000-ton  vessel? 

Mr.  Saunders.  Say  $500,000;  that  does  not  alter  the  question  at 
all.  I  took  a  million  dollars  as  the  original  cost  of  the  vessel.  I 
do  not  care;  say,  $500,000;  it  is  immaterial. 

Mr.  GiBBONEY.  It  ought  to  be  the  life  of  the  vessel  figured  out  on 
a  conservative  basis  divided  into  the  amount  the  vessel  cost.  That 
is  all. 

Mr.  Saunders.  Can  you  not  put  that  in  now — some  concrete  state- 
ment of  the  figures? 

Mr.  GiBBONEY.  Being  a  lawyer,  I  am  not  a  very  good  mathema- 
tician. 

Mr.  Saunders.  I  do  not  want  you  to  go  into  any  exact  calcula- 
tion; I  just  want  to  know  this:  Here  is  a  $500,000  ship  that  the 
Government  has  bought  in  normal  times.  What  I  want  to  know 
is  what  the  Government  ought  to  get  from  that  ship  in  the  way  of 
returns,  to  provide  for  insurance,  profit,  and  depreciation,  as  nearly 
as  you  can  give  it. 

Mr.  GiBBONEY,  Of  course,  my  proposition  was  6  per  cent  net ;  that 
is,  we  would  pay  the  Government  6  per  cent  net, 

Mr,  Saunders,  You  would  take  care  of  the  insurance? 

Mr,  GiBBONEY.  We  would  take  care  of  the  insurance, 

Mr,  Saunders.  Over  the  6  per  cent? 

Mr,  GiBBONEY.  Over  the  6  per  cent, 

Mr,  Saunders,  And  give  the  Government  6  per  cent? 

Mr,  GiBBONEr,  Yes,  sir;  and  give  the  Government  6  per  cent, 

Mr,  Saunders,  That  presents  a  concrete  proposition, 

Mr.  GiBBONEY.  Six  per  cent  net, 

Mr,  Curry,  Do  you  not  figure  off  as  depreciation  3  per  cent  for 
the  first  10  j^ears,  and  5  per  cent  thereafter,  on  a  new  ship? 

Mr,  GiBBONEY,  I  think  that  is  customary,  for  the  shipowner, 

Mr,  Curry.  I  think  that  is  just  what  the  judge  is  trying  to  get. 

Mr,  Saunders,  If  you  are  going  to  take  care  of  depreciation,  you 
would  have  to  pay  that  to  the  Government  ? 

Mr,  GiBBONEY,  Certainly, 

Mr,  Saunders.  How  much  would  that  be? 

Mr.  GiBBONEY,  From  3  to  5  per  cent, 

Mr,  Saunders,  Say,  4. 

Mr,  GiBBONEY,  They  usually  figure  the  first  10  years  at  very  much 
less  than  that, 

Mr,  Saunders.  Then  you  would  have  to  pay  the  Government  10 
per  cent, 

Mr.  GiBBONEr.  Yes.  Our  proposition  is  to  give  the  Government 
6  per  cent  net  on  the  amount  of  the  investment. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      453 

Mr.  Saunders.  And  then  you  to  take  care  of  the  insurance? 

Mr.  Gibbon EY.  We  would  take  care  of  the  insurance  and  take  care 
of  the  depreciation. 

Mr.  Saunders.  That  is  what  I  am  trying  to  bring  out. 

Mr.  Gibbon  EY.  I  have  nothing  further  to  say,  gentlemen,  except 
I  read  last  night,  coming  down  on  the  train,  a  letter  which  was  said 
to  have  been  written  by  the  chamber  of  commerce  to  the  committee 
here,  and  I  just  wanted  to  make  a  few  comments  on  it.  In  the  first 
place: 

The  chamber  further  submits  that  American  shipbuilding  yards  are  unable 
to  accept  orders  for  the  construction  of  vessels  of  sufficient  size. 

That  is  not  true  at  all. 

The  Chairman.  They  just  have  in  mind  these  big  yards.  If  you 
Avill  turn  to  page  41  of  the  hearings,  you  will  find  a  list  of  40  or  50 
yards  in  the  United  States  that  are  building  ships. 

Mr.  GiBBONEY.  I  have  no  doubt  about  it,  that  a  great  many  of  the 
largest  shipbuilding  yards  are  filled,  but  there  are  a  great  many  ship- 
building yards — I  do  not  say  there  are  a  great  many,  but  there  are 
some,  which  can  take  orders  for  ships  to-day.  I  know  I  represented 
the  Seattle  Dry  Dock  and  Construction  Co.  in  the  matter  of  closing 
a  contract  in  New  York  in  December  for  eight  boats.  That  is  a  com- 
pany that  has  built  boats  for  the  Government. 

Now,  I  want  to  comment  on  this  statement,' and  that  is  all  I  have 
to  say : 

The  chamber  does  not  believe  that  a  subsidy  assuring  a  profit  to  owners  of 
American  vessels  in  foreign  trade  is  necessary. 

I  do  not  think  these  gentlemen  had  their  sense  of  humor — that  it 
was  not  working — when  the}"  wrote  that,  because  I  read  in  the  same 
l>aper,  the  Journal  of  Commerce,  the  text  of  a  bill  which  is  said  to 
be  a  bill  by  the  chamber,  introduced  by  Congressman  Rowe,  and  if 
that  does  net  provide  for  subsidies,  I  do  not  know  what  a  subsidy  is. 

The  Chairman.  I  am  having  figured  out  just  what  that  would  cost 
the  Government  annually. 

Mr.  GiBBONEY.  What  is  that,  sir? 

The  Chairman.  I  am  having  that  figured  out.  On  its  face  it  ap- 
propriates $100,000,  but  I  expect  it  would  take  $10,000,000  to  carry 
it  into  effect. 

JSIr.  GiBBONEY.  It  is  just  a  pure  subsidy  figured,  in  the  first  place, 
on  the  difference  in  cost  here  and  abroad.  I  do  not  think  it  would 
be  possible  to  determine  that  to  any  degree  of  accuracy.  As  to  the 
cost  of  operation  of  the  boats  now  in  existence,  that  would  be  very 
difficult  to  figure  out.  That  is  a  pure  subsidy  on  operation  and  con- 
struction, and  nothing  else.  And  yet  they  say  the  chamber  does  not 
favor  subsidy. 

Mr.  Loud.  You  think  a  loan  provision  in  the  law  would  be  de- 
sirable ? 

Mr.  GiBBONEY.  I  do. 

Mr.  Loud.  What  proportion  of  the  value  of  the  boat  ? 

Mr.  GiBBONEY.  I  would  think,  as  a  safe  business  proposition,  the 
Government  ought  not  to  lend  over  a  third  or  a  half. 

Mr.  Loud.  At  what  per  cent? 

Mr.  GiBBONEY.  That  could  be  left  to  the  discretion  of  the  shipping 
board,  as  the  shifting  price  of  the  money  changed,  or  it  could  be 


454      SHIPPING  BOARD,  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

fixed  at  the  regular  amounts  men  would  be  willing  to  pay,  between 
5  and  0  per  cent. 

Mr  TjOttp,  That  would  have  to  be  determined  then? 

Mr.  GiBBONEY.  I  venture  to  say,  if  you  put  it  in  here  at  6  per  cent, 
3-ou  would  find  the  money  gobbled  up. 

]Mr.  Loud.  Would  that  be  secured  by  insurance  upon  the  boat? 

Mr.  GiBBONET.  Yes,  sir:  secured  by  full  insurance  on  the  boat, 
just  as  you  would  in  the  ordinary  loan  or  mortgage  on  a  house — you 
have  the  mortgagor  protect  you  in  every  way.  And  then  I  think 
most  shipbuilders  would  be  willing  to  have  a  provision  added  that 
the  Government  could  take  over  that  boat  as  a  naval  auxiliary. 

Mr.  Loud.  The  boat  to  continue,  of  course,  under  American  reg- 
istry ? 

]\Ir.  GiBBONEY.  And  just  one  more  point,  and  that  is  the  bill  ought 
to  be  changed  as  to  the  price  at  which  the  boat  is  taken  over  after 
a  loan  b}^  the  Government.  The  private  individual  ought  to  be  safe- 
guarded. It  seems  to  me  that  a  better  provision  than  the  provision 
in  the  bill  would  be  for  the  L'nited  States  district  court  to  determine 
in  any  particular  case,  what  was  the  fair  value  of  the  line  which 
the  Government  took  over  for  a  naval  auxiliary,  rather  than  to  leave 
it  to  the  shipping  board. 

Mr.  Loud.  If  you  had  a  shipping  board  of  five,  would  not  that  be 
competent  and  ample? 

]Mr.  GiBBONEY.  I  do  not  think  five  would  be  any  better  than  three. 

The  Chair:man.  You  would  be  better  off  as  lawj^ers  to  have  it  go 
into  the  courts,  but  I  do  not  think  it  would  be  of  advantage  to  the 
people. 

Mr.  GiBBONEY.  You  might  let  the  shippers  agree  upon  it.  or  let  the 
Government  and  the  lessee  agree,  and  if  they  could  not,  then  there 
should  be  some  separate  tribunal  to  pass  upon  it.  From  the  stand- 
point of  the  people  putting  their  money  into  these  corporations,  they 
would  like  to  feel  they  are  going  to  get  their  money  back,  and  they 
would  feel  safer  if  the  United  States  district  court  would  pass  on 
this  question,  rather  than  the  board  itself.  I  know  in  the  public 
land  bill  before  the  Senate  that  there  is  such  a  provision,  that  those 
leases  may  be  taken  over  and  the  recapture  of  those  leases  is  b}?^  the 
district  court  of  the  United  Stats.  And  I  think  most  people  would 
feel  safer  in  putting  their  money  in.  I  have  no  doubt  the  shipping 
board  would  treat  the  lessees  fairly;  but  if  they  could  not  agree,  it 
seems  to  me  that  the  L^nited  States  district  court  can  more  safely 
proceed. 

Mr.  Greene.  Did  you  refer  to  the  steamer  Lansing  in  one  of  your 
boats? 

Mr.  GiBBONEY.  Yes,  sir :  the  steamer  Lansing. 

Mr.  Greene.  ^^Hiat  is  that,  a  wooden  vessel  or  an  iron  vessel? 

Mr.  GiBBONEY.  I  do  not  recall  for  the  moment.  I  know  we  bought 
a  boat  by  the  name  of  Lansing,  but  I  do  not  know  what  the 
boat  was. 

Mr.  Greene.  Do  you  know  what  her  age  is? 

Mr.  GiBBONEY.  No :  I  do  not  know  anything  about  that. 

Mr.  Greene.  Can  you  furnish  that  information  and  have  it  put  in 
the  record? 

Mr.  GiBBONEY.  I  will  be  glad  to  furnish  to  this  committee  a  list 
of  all  of  these  boats  and  give  their  records — 14  of  them. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      455 

Mr.  Greene.  I  would  like  to  have  the  information  whether  it  is 
a  wooden  vessel,  a  steel  vessel,  or  an  iron  vessel,  and  how  old  u 
vessel  it  is. 

Mr.  GiBBONEY.  Yes,  sir. 

Mr.  Greene.  And  how  it  rates. 

Mr.  GiBBONEY.  I  will  furnish  you  a  list  of  the  whole  14. 

The  Chairman.  I  do  not  know^  why  it  would  be  of  interest,  but 
if  you  want  it  we  will  have  it. 

Mr.  Greene.  I  would  like  to  have  it.     I  want  the  light  shown. 

Mr.  GiBBONEY.  I  will  give  a  list  of  the  wdiole  1-1. 

Mr.  Greene.  This  gentleman  has  talked  pretty  fast,  but  he  has  not 
talked  directly,  and  I  would  like  to  have  the  facts. 

Mr.  GiBBONEY.  If  there  is  an}^  question  you  w^ant  to  ask  me  I  will 
try  and  answer  it. 

Mr.  Greene.  I  have  asked  you  that  question  and  you  say  you 
can  not  answer  it. 

INIr.  GiBBONEY.  I  can  not. 

Mr.  Greene.  I  ask  you  to  furnish  it  for  the  record. 

Mr.  GiBBONEY.  I  will  do  so  gladly. 

Mr.  Greene.  And  you  said  you  would  also  do  so  in  regard  to  the 
others. 

Mr.  GiBBONEY,  Yes,  sir. 

Mr.  Greene.  I  would  like  to  have  it. 

STATEMENT  OF  MR.  JOHN  H.  FAHEY,  OF  BOSTON. 

Mr.  Fahey.  I  am  engaged  also  in  business  in  Worcester,  Mass., 
and  am  a  newspaper  publisher. 

The  Chairman.  And  until  recently 

Mr.  Fahey.  President  of  the  Chamber  of  Commerce  of  the  United 
States.  My  term  has  just  expired  and  I  have  been  succeeded  by  Mr. 
R.  G.  Ehett,  of  Charleston. 

In  the  first  place,  I  would  like  to  make  a  statement  concerning 
the  referendum  of  the  Chamber  of  Commerce  of  the  United  States 
on  the  so-called  ship  purchase  bill,  as  it  was  before  Congress  last 
year.  At  a  previous  hearing  Mr.  W.  H.  Douglas,  of  New  York,  a 
member  of  our  committee  on  merchant  marine,  appeared  and  made 
a  statement  with  reference  to  that  action  of  the  national  chamber. 
Unfortunately  I  received  no  notice  of  that  hearing  and  it  was  not 
possible  for  me  to  be  present.  I  observe  in  going  through  the  record 
of  the  hearing  that  a  few  questions  were  raised  by  members  of  the 
committee  as  to  how  the  vote  of  the  Chamber  of  Commerce  of  the 
United  States  is  polled  on  the  various  questions  submitted;  and  I 
would  like  to  make  an  explanation  of  that  for  the  benefit  of  the 
members  of  the  committee.  In  the  first  place,  I  observe  that  ques- 
tions were  raised  as  to  how  the  constituent  organizations  in  the 
membership  of  the  national  chamber  reach  their  conclusions  on 
these  referenda.  As  to  that  I  would  like  to  say  that  the  method  of 
action  is  determined  by  the  by-laws  or  the  constitution  of  each  or- 
ganization. They  act  on  the  referenda  in  various  ways.  Some  under 
their  laws  act  in  meetings  of  their  membership;  others  by  mail 
referenda  on  the  various  propositions  submitted  by  the  national 
chamlier;  others  through  a  committee:  and  others  through  boards 


456      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

of  directors,  where  the  board  has  the  power  of  acting  for  the  mem- 
bership. And  so  action  was  taken  on  this  particular  referendum  by 
different  methods.  We  have  prepared  here  a  summary  of  the  action 
for  all  the  organizations  in  the  country  which  voted  on  the  subject ;  and 
we  would  be  very  glad  to  leave  it  with  members  of  the  committee 
to  look  into  in  any  way  they  see  fit. 

I  think  it  is  unnecessary  to  take  much  of  your  time  by  going  into 
the  details,  but,  in  a  few^  words,  the  summary  shows,  in  connection 
with  this  referendum,  that  of  the  organizations  voting  15  determined 
their  attitude  by  a  ballot  in  open  meetings  of  the  membership  with- 
out a  previous  committee  report,  24  had  a  report  from  a  committee 
and  then  passed  upon  it  in  open  meetings  of  the  membership,  24 
submitted  it  to  a  mail  ballot,  71  acted  through  their  directors  or 
governing  boards,  62  acted  through  a  governing  board  after  a  report 
from  a  standing  committee,  8  acted  by  the  governing  board  alone, 
and  7  acted  through  the  officers  who  were  empowered  to  act. 

There  is,  as  I  say,  a  complete  summarj^,  which  shows  also  the 
number  of  members  in  the  organizations  in  each  case. 

As  to  this  system  of  referenda,  I  would  like  to  say,  gentlemen, 
that  this  particular  one  is  the  ninth  submitted  by  the  Chamber  of 
Commerce  of  the  United  States.  This  system  has  been  adopted  in 
our  country 

Mr.  Greene.  Mr.  Chairman,  I  would  like  to  have  the  statement 
that  Mr.  Fahey  has  referred  to  incorporated  in  the  record. 

The  Chairman.  Suppose  we  Avait  until  he  gets  through  with  his 
verbal  statement,  and  I  presume  that  is  what  he  is  going  to  ask  to 
have  done. 

Mr.  Fahey.  That  is  for  the  determination  of  you  gentlemen;  it 
is  here  for  such  use  as  you  desire  to  make  of  it. 

The  Chairman.  I  think  we  would  like  to  have  that  go  into  the 
record,  unquestionably,  as  Mr.  Eosenthal  made  such  criticisms  of 
the  acts  of  the  chamber  of  commerce. 

Mr.  Fahey.  The  only  charge  is  this,  that  Mr.  Douglas  said  that 
they  were  speaking  for  the  people  of  the  United  States 

The  Chairman.  I  was  not  speaking  of  Mr.  Douglas ;  I  was  speak- 
ing of  Mr.  Rosenthal.  Mr.  Douglas  was  asked  how  the  sentiment 
of  the  various  chambers  of  commerce  was  obtained,  and  he  did  not 
know,  and  now  we  are  getting  the  concrete  information  as  to  how 
that  was  done.  I  agree  with  Mr.  Greene  that  the  statement  should 
be  inserted  in  the  record. 

Mr.  Fahey.  I  do  not  w^ish  to  go  into  detail  too  much,  and  I  hope 
you  will  stop  me  at  any  point  if  you  think  I  am,  because  I  realize 
you  have  many  gentlemen  here  to  be  heard. 

The  Chairman.  You  are  giving  the  information  now  that  we 
could  not  get  from  Mr.  Douglas  because  he  did  not  have  it.  It  was 
no  fault  of  his. 

Mr.  Fahey.  The  plan  of  getting  the  sentiments  of  the  business  men 
of  the  country  by  this  method  on  business  questions  is  something 
that  has  been  developed  more  largely  in  our  country  in  the  last  two 
years  than  ever  before.  Similar  methods  have  been  employed  in 
European  countries,  notably  Germany,  France,  and  Switzerland, 
but  theirs  are  more  informal. 

The  chambers'  plan  has  been  this:  First,  to  submit  a  given  ques- 
tion to  a  committee  chosen  as  carefully  as  possible  to  represent  the 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      457 

different  points  of  view  of  various  sections  of  the  country ;  men  hav- 
ing information  concerning  the  subject.  That  committee  makes  its 
study  and  presents  its  report  to  the  board  of  directors.  The  board  of 
directors  may  accept  the  report  or  suggest  changes  or  suggest  further 
consideration  of  different  phases  of  it.  When  the  report  is  com- 
pleted, then  it  is,  under  the  direction  of  the  board,  sent  out  as  a 
referendum  in  printed  form. 

In  the  referendum,  no  matter  what  the  report  of  the  committee 
may  be  concerning  the  question  under  discussion,  it  is  the  rule  of  the 
chamber  to  undertake  to  present  to  its  membership  both  sides  of  the 
question  as  thoroughly  as  possible.  In  this  particular  instance,  the 
merchant  marine  bill  of  last  year  was  presented  at  the  membership 
meeting  in  the  chamber  in  February,  1015.  A  large  part  of  one  day 
was  given  to  its  discussion  in  open  debate.  The  explanation  of  the 
Government  bill  was  made  by  Secretary  McAdoo  at  length,  and 
critic'sms  of  its  features  were  made  by  Senator  Burton,  folloAving 
which  the  whole  question  was  thrown  open  to  debate  by  members 
of  the  chamber.  There  were  some  600  authorized  delegates  in  at- 
tendance at  that  time  from  all  parts  of  the  country.  The  determina- 
tion of  the  meeting  was,  however,  that  there  should  not  be  hasty 
action,  and  that  all  the  organizations  of  the  country  should  have 
full  opportunity  to  pass  upon  the  question,  and  it  was  ordered  sent 
to  a  referendum.  It  was  sent  in  the  form  in  which  you  see  it.  In 
addition,  however,  the  complete  argument  of  Secretary  McAdoo  and 
the  complete  argument  of  Senator  Burton  accompanied  this  docu- 
ment. 

When  a  referendum  goes  out  to  the  organizations,  each  chamber  has 
45  days  to  pass  upon  it.  In  a  great  many  instances  the  organizations 
request  additional  cop'es  of  the  referenda  which  we  furnish,  and 
they  are  circulated  to  the  extent  of  some  thousands  among  these 
organizations.  In  many  instances  the  referendum  will  go  to  a  com- 
mittee, to  the  merchant  marine  committee  or  a  special  committee  of 
the  organization,  which  submits  a  report  to  the  directors,  and  as  I 
have  pointed  out  in  some  of  the  organizations  the  directors  are  em- 
powered by  the  by-laws  to  pass  upon  these  reports.  In  other  cases 
the  report  will  go  to  the  membership.  The  record  here  shows  how 
this  particular  referendum  was  disposed  of. 

When  these  votes  are  polled  and  brought  together  at  the  end  of 
the  45-day  period,  a  chart  is  made  showing  every  organization  of  the 
country  voting  on  each  of  these  projects.  These  charts  are  printed 
and  copies  of  them  are  available  for  the  members  of  the  committee, 
in  addition  to  recording  its  ballots  in  this  form,  any  organization 
which  W'ishes  to  present  any  point  at  variance  with  the  ballot  has 
a  full  opportunitv  of  incorporating  its  suggestions  in  returning  its 
vote.  So  you  will  find  on  the  last  pno'es  of  th's  chart  independent 
opinions  concerning  phases  of  the  bill  exjjressed  by  many  of  the 
organizations. 

I  would  direct  vour  attention  to  the  details  of  this  referendum. 
You  will  see  that  it  presents  the  report  of  our  merchant  marine  com- 
mittee and  a  minor' ty  report,  a  summary  of  the  arguments  for  and 
against  the  principles  involved,  a  summary  of  the  history  of  the 
American  registry  and  American  shipping,  also  the  ship-purchass 
bill  itself  in  full,  as  well  as  the  bill  presented  and  worked  out  lasfc 


458      SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MERCHANT  MARJNE. 

year  concerning  possible  regulation,  merely  as  an  example  of  the 
scheme  of  regulation. 

The  chamber  voted  on  certain  very  definite  things  here,  aside  from 
the  ship-purchase  bill  itself. 

First.  Do  you  favor  the  Government  undertaking  the  purchase, 
construction,  and  charter  of  vessels  for  mercantile  purposes,  together 
with  the  operation  of  such  vessels?  The  vote  was  89  in  favor  and  690 
opposed. 

Second.  Do  you  favor  ownership  of  merchant  vessels  by  the  Gov- 
ernment, but  with  operation  by  private  parties  under  leases,  the  vote 
being  51  in  favor  and  713  opposed. 

Third.  Do  you  favor  subsidies  from  the  Government  sufficient  to 
offset  the  difference  in  cost  between  operation  of  vessels  under  the 
American  flag  and  operation  in  the  same  deep-sea  trades  under  for- 
eign flags,  the  vote  being  554  in  favor  of  and  189  opposed. 

Fourth.  Do  you  favor  a  subvention  to  establish  regular  mail  and 
freight  lines  under  the  American  flag  to  countries  in  which  the  com- 
mercial interests  of  the  United  States  are  important,  and  to  American 
dependencies,  the  vote  being  713  in  favor  and  52  votes  opposed. 

Concerning  the  creation  of  the  Federal  shipping  board,  the  ballot 
was  G39  votes  in  favor  and  116  opposed.  _         . 

On  the  question  of  Government  subscription  to  stock  in  a  marine- 
development  company  the  vote  was  416  in  favor  and  314  opposed. 
That  particular  one  failed  to  pass,  for  under  the  by-laws  action  must 
be  taken  by  a  two-thirds  vote  to  be  binding  on  the  chamber. 

As  to  the  ocean-mail  law  of  1891,  that  it  should  be  amended,  re- 
ducing the  speed  of  ships  from  16  to  12  knots  and  by  making  the  com- 
pensation adequate  to  permit  the  establishment  of  steamship  lines 
carrying  both  mail  and  freight,  the  ballot  was  692  votes  in  favor  and 
78  votes  opposed. 

On  the  question  of  legislation  abolishing  rebates  and  providing  for 
supervision  of  rates  by  the  Federal  shipping  board  the  vote  was  601 
in  favor  and  130  opposed. 

That  Federal  licenses  should  be  taken  out  by  lines,  domestic  and 
foreign,  engaged  in  shipping  between  ports  of  the  United  States  and 
other  countries  the  vote  was  610  in  favor  and  120  opposed. 

That  referendum,  gentlemen,  in  the  detail  of  its  submission  and 
in  the  form  of  its  presentation  was  as  complete  as  it  was  possible  for 
our  board  of  directors  to  devise.  That  there  may  be  defects  in  it  we 
realize.  Almost  anything  can  be  criticized.  But  the  endeavor  of  this 
organization  has  been,  as  thoroughly  and  as  democratically  as  pos- 
sible, to  get  a  free  expression  of  the  opinion  of  the  business  men  of 
the  country  in  every  one  of  our  States. 

The  Chairman.  Right  at  that  point,  Mr.  Fahe}'.  how  many  sub- 
sidiary organizations — that  is,  constituent  bodies — of  the  Chamber  of 
Commerce  of  the  United  States  voted  on  the  question? 

Mr.  Fahet.  Two  hundred  and  eighty-two  organizations  voted  on 
this  question. 

The  CHAiR:\rAN.  And  how  many  organizations  are  there  of  con- 
stituent bodies  in  the  Chamber  of  Commerce  of  the  United  States? 

Mr.  Fahey.  At  that  time  there  were  575  qualified  to  vrte:  282  took 
action  upon  it  at  that  time.  At  the  present  time  the  membership  is. 
something  over  700. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      459 

The  Chairman.  On  the  fourth  question:  "The  committee  recom- 
mends that  there  should  be  legislation  abolishing  deferred  rebates 
and  providing  for  supervision  of  rates  by  the  Federal  shipping 
board,  with  requirements  for  filing  with  the  board  schedules  of 
rates  and  all  agreements  among  over-sea  lines,"  I  believe  you  said 
the  vote  Avas  601  in  favor  of  the  recommendation,  and  130  opposed. 
In  this  referendum  you  submitted  the  text  of  a  bill  I  introduced  in 
the  last  Congress  to  regulate  rates.  It  refers  to  that  legislation, 
does  it? 

Mr.  Fahey.  In  general  terms,  yes;  not  specifically. 

The  Chairman.  I  understand. 

Mr.  Fahey.  The  committee  did  not  set  that  forth  as  a  matter  for 
the  membership  to  pass  upon. 

The  Chairman.  But  just  the  general  proposition? 

Mr.  Fahey.  That  bill  was  an  illustration  of  the  principle.  It 
was  the  general  principle  on  Avhich  the  chamber  voted,  and  not  on 
the  details  of  the  bill,  because  the  bill  was  not  up  for  consideration 
at  that  time. 

If  there  are  any  questions  which  members  of  the  committee  would 
like  to  ask  concerning  the  method  of  the  submission  of  this  refer- 
endum, or  polling  the  vote  on  it,  I  would  be  very  glad  to  answer,  so 
far  as  I  can. 

The  Chairman.  Mr.  Greene  suggested  that  you  make  your  refer- 
endum a  part  of  the  record. 

Mr.  Fahey.  Yes. 

(The  referendum  and  summary  offered  by  Mr.  Fahey  will  be 
found  at  the  conclusion  of  his  remarks.) 

Referring  to  the  chairman's  question  of  a  moment  ago,  he  spoke 
of  a  statement  by  Mr.  Douglas  concerning  this  referendum,  when 
he  was  before  the  committee,  saying  that  it  represented  the  views 
of  the  peoijle  of  the  United  States.  I  take  it  that  must  have  been 
a  slip  of  the  tongue  on  the  part  of  Mr.  Douglas,  for  we  are  not 
pretending,  nor  have  we  any  right  to  claim,  that  this  action  by 
referenda  in  the  Chamber  of  Commerce  of  the  United  States  goes 
quite  that  far.  It  represents,  we  claim,  the  views  of  the  business 
men  of  the  United  States,  and  so  far  as  they  may  be  consistent  with 
those  of  the  people  as  a  whole,  the  referendum  reflects  popular  senti- 
nient,  but  that  it  represents  the  views  of  the  entire  population  of 
the  United  States  we  do  not  assert. 

The  CHAiR:\rAN.  That  was  a  good-natured  challenge  on  my  part 
that  Mr.  Douglas's  idea  \vas  rather  extravagant. 

Mr.  EoDENBERG.  What  is  the  membership  of  the  chamber  at 
present  ? 

Mr.  Fahey.  At  the  time  of  submitting  this  referendum  there  were 
582  organizations,  representing  something  like  200.000  business  men, 
firms,  and  corporations,  if  my  memory  serves  me  right. 

Mr.  Redpath.  A  little  over  that;  about  250,000.  Of  course,  so 
far  as  the  individual  business  men  are  concerned,  that  would  be  in- 
creased several  times,  because  this  membership  represents  firms  and 
corporations,  while  the  individual  membership  would  be  very  much 
larger  in  most  instances. 

Mr.  RoDENBERG.  How  do  you  apportion  the  vote  of  the  member- 
ship of  each  individual  organization?  According  to  the  number  of 
members  ? 


460      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Fahey.  Yes. 

Mr.  RoDENBERG.  I  See  some  are  given  2  and  some  3. 

Mr.  Fahey.  Yes;  a  minimum  of  1  and  a  maximum  of  10.  The 
largest  organizations  of  the  country  have  no  more  than  10  votes, 
while  the  smallest  organization  may  have  1  vote.  For  example,  the 
Boston  Chamber  of  Commerce,  with  5,000  members,  and  the  Chicago 
Association  of  Commerce,  with  much  the  same,  and  the  New  York 
Merchants'  Association,  the  Philadelphia  Chamber,  etc.,  they  content 
themselves  with  a  maximum  of  10  votes,  while,  as  a  matter  of  fact, 
the  smaller  organizations  exercise  the  larger  influence  in  proportion. 

The  significant  things,  I  believe,  about  this  particular  referendum 
are  in  two  or  three  directions.  If  you  have  the  time  to  look  at  it  in 
the  detail,  you  will  observe  that  the  consensus  of  opinion  expressed  is 
quite  irrespective  of  the  different  sections  of  the  United  States.  For 
example,  on  the  matter  of  subsidies  and  subventions,  you  will  find 
the  interior  of  the  country  and  the  Southwest,  as  well  as  the  Pacific 
coast  and  the  East,  voting  with  practical  unanimity  on  that  particular 
thing.  I  am  quite  frank  to  say  that  I  was  somewhat  surprised  at  the 
overwhelming  character  of  the  vote  in  that  direction  throughout  the 
country. 

Mr.  Hadlet.  Can  you  state  what  proportion  of  the  organizations 
in  the  country  are  constituent  members  of  your  association  ? 

Mr.  Fahey.  Yes.  Our  present  membership  is  a  little  more  than 
TOO.  In  the  entire  country  there  are  about  2,000  organizations  of  this 
type.  Our  analysis  of  the  last  couple  of  years  shows  that  there  are 
not  more  than  900  to  1,000  of  them  that  are  really  effective  organiza- 
tions. 

Mr.  BfRNES.  Have  you  any  information  as  to  the  manner  in  which 
these  questions  were  considered  by  the  constituent  organizations? 

Mr.  Fahey'.  Yes;  that  is  presented  in  this  summary  here  to  which 
I  referred. 

Mr.  Byrnes.  What  I  mean  is  this.  Do  you  have  any  information  in 
your  reports  as  to  the  number  of  members  of  the  constituent  organi- 
zations present  at  the  time  that  it  was  passed  upon? 

Mr.  Fahey.  In  some  cases,  yes;  but  in  the  case  of  the  membership 
meetings  I  am  not  sure  that  the  record  includes  a  statement  of  the 
membership  present.    Does  it,  Mr.  Eedpath'? 

Mr.  Redpath.  Not  in  all  cases:  it  does  in  a  few  cases. 

Mr.  By'rnes.  The  reason  I  ask  is  I  think  it  is  the  experience  of 
every  Member  of  Congress  that  he  has  received  resolutions  from 
chambers  of  commerce  on  various  subjects,  and  our  inquiry  shows 
that  it  is  true,  of  these  smaller  towns  especially,  that  the  matter  has 
not  been  given  the  careful  consideration  that  it  ought  to  receive  by 
them.  Of  course,  I  know  there  are  some  very  live  organizations,  and 
then  there  are  some  dead  ones,  where  one  or  tAVo  members  can  control 
and  express  the  opinion  of  that  organization.  What  I  want  to  know 
is,  How  accurate  is  this  as  a  basis  of  the  sentiment  of  these  organiza- 
tions ? 

Mr.  Fahey^  As  to  that  question,  in  the  first  place  let  me  say  I 
think  you  are  perfectly  right  as  to  conditions  that  have  existed  in 
many  instances  in  the  past.  As  a  matter  of  fact,  in  my  judgment, 
until  within  the  last  10  years,  when  a  very  considerable  reform  in 
conditions  began  in  this  country  our  business  organizations,  as  a 


SHIPPING  BOARD,  NAVAL  AUXU.IAKV,  AND  MERCHANT  MARINE.      461 

whole,  were  woefully  inefficient  and  tlieir  methods  were  extremely 
unbusinesslike,  and,  to  a  very  large  extent,  their  consideration  of 
questions  was  just  what  you  describe.  In  the  last  10  years,  how- 
ever, there  has  been  a  tremendous  and  very  significant  reform  in 
these  organizations  all  over  the  country.  They  are  better  organized 
to-day;  they  are  giving  more  careful  consideration;  they  are  able 
to  employ  men  as  secretaries  wdio  have  some  intelligence  and  ability; 
and  they  are  dealing  with  these  things  in  a  very  much  different  way 
than  they  ever  have.  Moreover,  this  system  of  referenda  emanating 
from  the  national  chamber  has  had  a  most  interesting  reaction  in 
bringing  about  more  careful  consideration  than  previously.  I  be- 
lieve it  is  absolutely  fair  to  say  that  these  referenda  of  the  chamber 
are  getting  really  careful  and  cautious  consideration. 

This  summary  shows  the  organizations  Avhich  passed  upon  this 
matter  in  meeting;  those  which  previously  referred  it  to  a  com- 
mittee, and  then  to  the  board  of  directors,  and  then  to  the  meeting, 
and  the  steps  that  were  taken  in  each  case.  You  will  find  on  investi- 
gation that  a  very  large  proportion  of  them  went  about  the  thing 
very  carefully. 

Mr.  Byrnes.  Where  is  that  information  you  refer  to? 

Mr.  Fahey.  We  have  just  a  few  copies,  which  I  will  leave  with  the 
committee,  summarizing  that  whole  matter.  Moreover,  it  also  takes 
each  one  of  the  cities  and  explains  how  each  voted  upon  the  matter, 
giving  a  statement  of  all  the  cities  voting  and  of  all  the  organizations 
voting,  and  showing  how  the  action  was  taken  in  each  case. 

Mr.  Saunders.  Are  you,  or  have  you  been,  in  the  shipping  busi- 
ness? 

Mr.  Fahey.  No,  sir;  not  in  any  respect.  I  have  no  business  interest 
in  shippina:  business,  and  my  knowledge  of  this  subject  is  simply  that 
of  an  ordinary  citizen  interested  in  public  affairs,  who  has  heard  it 
discussed  for  a  great  many  years  by  men  in  different  sections  of  the 
country,  as  well  as  some  on  the  other  side  of  the  Atlantic. 

As  to  the  bill  at  present  before  the  committee,  concerning  which  it 
has  been  suggested  that  I  might  express  an  opinion,  I  w^ould  like  to 
have  it  very  clearly  understood  that  in  anything  I  may  say  about  this 
bill  I  am  in  no  sense  expressing  the  views  or  the  opinions  of  the 
Chamber  of  Commerce  of  the  United  States,  for  I  have  no  authority 
to  do  that,  nor  has  anybody  else.  The  new  features  of  this  particu- 
lar bill  are  now^  before  the  Chamber  of  Commerce  of  the  United 
States,  and  until  they  have  been  submitted  to  referenda  and  voted 
upon  no  official  of  this  chamber  has  any  right  or  authority  to  say 
what  the  attitude  of  the  Chamber  of  Commerce  of  the  United  States 
is.  How^ever,  there  are  certain  principles  incorporated  in  this  bill 
which  were  likewise  passed  upon  in  the  referenda  of  the  chamber,  and 
concerning  those  the  view  of  the  chamber  is  reasonably  clear. 

As  to  some  of  the  new  principles,  the  annual  meeting  and  the  last 
meeting  of  the  board  of  directors  reached  the  conclusion  that  when 
the  bill  itself  was  a  little  further  advanced  and  it  was  reasonably 
clear  just  what  its  provisions  would  be  the  chamber  would  be  pre- 
pared to  submit  it  to  a  referendum  if  it  seemed  advisable.  As  to 
any  personal  views  I  hope  you  will  clearly  understand  that  I  am  not 
expressing  them  as  an  expert  in  the  shipping  business,  or  as  an 
expert  on  the  subject  as  a  whole,  but  merely  one  somewhat  familiar 
32910—16 30 


462      SHIPPING  BOARD,  NAVAL  AUXILfAKY,  AND  MERCHANT  MARINP:. 

with  the  discussion  of  this  thing  for  years,  and  who  has  heard  a  good 
many  views  expressed  on  it  in  the  course  of  the  last  two  years. 

Referring  to  the  present  bill  as  a  whole,  it  is  my  opinion  that 
umcng  business  men  generally  there  can  be  no  sound  or  substantial 
objection  to  a  bill  providing  for  the  building  of  naval  auxiliaries  or 
a  naval  reserve  intended  for  the  service  of  the  United  States  Navy. 
Indeed,  business  men  can  see  readily  that  the  Navy,  without  sufficient 
supplemental  transportation  to  take  care  of  coal  and  other  supplies, 
is  net  an  efficient  Navy,  and  they  would  hardly  expect  it  to  be  main- 
tained at  sea  for  any  length  of  time  unless  it  was  enabled  to  get  the 
proper  supplies.  Therefore,  as  a  broad  matter  of  efficiency  in  opera- 
tion, I  am  sure  the -business  men  would  see  the  necessity  for  ample 
raval  provision. 

As  to  the  second  principle  involved  here,  if  the  Government  is 
going  to  build  all  these  ships  for  that  purpose,  it  is  common  sense  to 
utilize  them  under  conditions  of  peace,  by  employing  them  in  any 
other  practical  way.  That  is  a  sound  business  proposition.  In 
general,  the  expressions  of  opinion  that  I  have  heard  among  busi- 
ness men  are  those  of  apprehension  as  to  the  effect  of  some  features 
of  this  bill;  the  fear  that  they  may  be  detrimental  to  the  present 
movement  for  a  general  upbuilding  of  the  American  merchant 
marine. 

I  believe,  as  a  result  of  the  thought  on  many  subjects  which  has 
been  animated  by  this  war,  not  only  the  business  men  of  the  country 
but  the  people  as  a  whole,  have  been  thinking  more  seriously  of  a 
merchant  marine  and  been  giving  more  attention  to  it  in  the  past  18 
months  than  they  had  in  the  previous  18  years,  and  their  views  are 
undergoing  some  change.  I  believe  that  whereas  years  ago  we  were 
interested  in  the  operation  of  a  merchant  marine  for  many  years, 
perhaps  the  last  40  or  50  we  have  been  so  absorbed  in  domestic  de- 
velopments and  have  found  such  substantial  returns  on  investments 
of  money  in  enterprises  here  at  home  that  we  have  not  thought  much 
{•bout  the  development  abroad;  we  could  make  more  money  at  home. 
Aside  from  that,  our  whole  foreign  trade  averaged  less  than  5  per 
cent  of  the  domestic  trade,  and,  according  to  some  authorities,  less 
than  2  per  cent;  and  under  those  circumstances  we  were  not  think- 
ing very  much  of  foreign  trade.  Nevertheless,  I  am  one  of  those 
who  believe  we  have  needed  to  push  foreign  trade  for  nearly  30 
years  now,  and  need  it  to-day  more  than  we  ever  have,  and  need  it 
even  more  for  the  future.  If  we  are  going  to  have  it  and  going  to 
maintain  it  we  must  have  a  sufficient  merchant  marine  to  carry  a 
iaro'e  part  of  it  at  least. 

If  that  be  so,  the  fundamental  question  involved  in  this  legislation, 
it  seems  to  me,  is  whether  the  limited  number  of  ships  which  may  be 
provided  on  the  basis  of  this  appropriation  is  going  to  advance  sub- 
stantially the  evolution  of  a  merchant  marine  important  enough  to 
serve  our  needs.  According  to  experienced  shipping  men,  not  more 
than  50  to  75  vessels  of  substantial  size  would  be  provided  by  an  ap- 
propriation of  $50,000,000.  And,  if  advantage  were  taken  of  the  terms 
of  the  bill  to  organize  corporations,  and  those  corporations  entered 
into  the  operation,  let  us  say,  for  example,  of  lines  to  South  America, 
it  is  more  than  likely — indeed,  it  is  extremely  probable — that  such 
corporations  would  have  to  incur  substantial  losses  for  a  consider- 
able time  before  those  lines  would  be  on  a  paying  basis.     If  that  is  a 


SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     463 

fair  contention,  then  the  number  of  ships  avaiLible  for  the  $50,000,000 
would  be  still  further  reduced,  because  a  part  of  that  $50,000,000 
would  go  to  make  up  losses  in  operation. 

As  against  that  argument,  however,  the  question  is  whether  the 
extraordinary  conditions,  with  the  opportunity  for  the  United  States 
to  go  into  the  shipping  business  as  it  has  never  had  before,  and  prob- 
ably never  will  ha^  e  again  in  tlie  history  of  the  world — let  us  hope  we 
will  never  have  the  opportunity  again  under  similar  conditions — is  it 
not  sound  statesmanship  and  good  business  to  do  everything  we  may 
reasonably  expect  to  do  in  an  emergency  to  encourage  the  building, 
not  of  50  or  75  ships  alone,  but  of  the  2,000  or  3,000  ships  that  we  need 
for  our  trade?     And,  if  so,  how  may  we  do  that? 

Under  present  conditions,  private  enterprise,  stimulated  by  extra- 
ordinary profits,  is  going  into  the  shipping  business  pretty  rapidly  in 
this  country.  It  is  likewise  going  further  into  it  in  some  other 
countries.  It  is  paying  high  prices  for  vessels,  the  wages  are  high, 
and  everything  in  connection  with  the  investment  has  gone  up  tre- 
mendously in  price.  But  all  wise  business  men  know  that  is  a  tem- 
porary condition,  and  the  question  is  what  is  going  to  happen  after 
the  war  is  over.  If  we  turned  loose  to-morrow  and  built  day  and 
night,  with  all  the  shipyards  that  we  have  at  our  disposal,  great  and 
small,  in  the  United  States,  I  believe  it  is  a  fair  statement  to  make 
that  the  next  two  or  three  years  could  not  begin  to  produce  the  num- 
ber of  ships  needed  here  and  that  we  ought  to  have  for  a  long  time  in 
the  future.  Therefore,  one  question  involved  is  how^  to  stimulate  a 
larger  building  program  than  that,  even,  and  on  what  basis  can  we 
encourage  the  shipbuilding  industry  to  extend  its  facilities  so  as  to 
turn  out  more  ships — what  encouragement  may  we  offer  to  private 
enterprise,  at  the  same  time  the  Government  is  going  forward  on  this 
program,  to  provide  us  the  ships  that  we  need.  That  is  the  question 
I  find  being  raised  by  business  men  generally  as  to  this  particular 
bill.  The  building  of  a  certain  number  of  ships  to  act  as  a  reserve, 
which  will  develop  the  standardization  of  types  and  promote  effi- 
ciency in  building  and  in  operation  may  prove  a  valuable  contribu- 
tion as  a  result  of  this  bill.  Moreover,  it  is  a  beginning,  and  we  need 
to  start  our  plans  for  a  real  merchant  marine  soon.  But  what  of 
the  larger  field  of  the  hundreds  of  ships  that  are  needed  if  we  are 
going  to  be  able  to  transport  our  goods,  in  our  own  bottoms,  as  we 
should  be  able  to  do. 

So  far  as  the  National  chamber  is  concerned,  to  a  very  surprising 
extent,  irrespective  of  section  and  political  affiliations,  the  business 
men  who  voted  on  this  subject  have  expressed  the  opinion  that,  in 
the  last  analysis,  only  some  system  of  subvention  or  subsidy  fairly 
devised,  will  finally  meet  the  difference  in  cost  of  operation  between 
ships  of  our  country  and  those  of  other  countries.  We  know  per- 
fectly well  under  present  conditions,  that  the  cost  of  building  on 
the  other  side  is  probably  as  high  as  it  is  in  this  country,  and,  in 
some  instances  higher.  And  not  only  that,  but  in  a  great  many  for- 
eign ships,  the  wage  cost  to-day  is  as  high  as  on  our  ships,  and  pos- 
siibly  higher  to  aome  extent.  I  won't  pretend  to  say  how  far  that  is 
true,  because  I  am  not  informed.  There  are  other  gentlemen  here 
who  can  give  you  information  on  that  point.  But  it  is  undoubtedly 
true,  to  a  certain  extent.  That  it  is  a  normal  condition,  however,  few 
would  contend:  or.  that  it  will  continue  long  after  this  war  is  over, 


464      SHIPPING  BOARD,  XAVAL  AUXILIARY,  AND  MERCHANT  MARSNE. 

we  can  hardly  anticipate.  The  question  is,  therefore,  what  qt  the 
future — not  the  temporary  care  of  conditions,  or  throwing  into  the 
sea  of  a  limited  number  of  ships  that  will  help  to  stabilize  rates. 
Upon  that  point,  in  my  judgment,  it  is  extremely  questionable  how 
far  40  or  50  ships  may  affect  the  rates  of  thousands  of  ships,  par- 
ticularly with  tremendous  demands  on  their  resources.  In  a  few 
words,  therefore,  the  question  is  not  what  we  may  do  for  the  time 
being  in  stimulating  greater  efficiency,  in  providing  resources  for  our 
Navy,  but  beyond  that  what  may  we  do  now,  under  present  conditions, 
to  lead  to  the  upbuilding  of  a  real  American  merchant  marine,  such 
as  the  country  needs. 

As  bearing  upon  that  point,  I  believe  that  the  feature  in  this  bill 
providing  for  the  creation  of  a  shipping  board,  which  will  go  into 
this  subject  and  undertake  to  look  ahead,  reporting  to  Presidents 
and  Congresses  the  effect  of  changing  conditions,  is  a  real  contribu- 
tion to  the  situation.  As  matters  stand  at  present,  it  may  be  very 
difficult  indeed,  if  the  country  were  read  to  act  to-morrow,  to  devise 
a  system  of  subsidies  that  would  be  equitable  and  that  could  be  fairly 
adjusted:  but  that  such  a  board  can  look  ahead,  and  in  the  near 
future,  be  able  to  make  suggestions,  is  quite  probable. 

Now,  as  to  some  other  details  of  the  bill.  The  provision  for  mem- 
bership on  the  board  of  the  Secretary  of  the  Navy  and  the  Secre- 
tary of  Commerce  is  criticized  by  business  men  as  being  unsound.  I 
think  there  are  reasons  which  have  not  been  advanced  generally  why 
the  Secretary  of  the  Navy  and  the  Secretary  of  Commerce  should  not 
be  on  that  board.  My  opinion  is  that  our  Cabinet  officers  are  being 
constantly  called  upon  to  act  on  just  such  things  as  this,  when  they 
have  not  the  time  to  attend  to  the  regular  business  of  their  offices. 
As  I  have  come  in  contact,  as  a  business  man,  with  Government  de- 
partments, down  here,  I  am  particularly  struck  with  the  fact  that 
Cabinet  members  are  called  upon  to  administer  big  business  enter- 
prises in  each  one  of  these  departments  without  anything  like  the 
facilities  provided  in  private  business  to  take  care  of  such  enterprises. 
In  the  first  place.  I.  for  one,  do  not  think  you  pay  your  Cabinet 
officers  enough,  and  you  do  not  give  them  secretarial  assistance  enough 
to  sufficiently  handle  the  -enormous  volume  of  business  that  has  to 
pass  over  their  desks  every  day.  To  put  further  burdens  on  them, 
Dy  placing  them  on  educational  boards  and  particularly  on  operating 
boards  of  this  sort,  prevents  their  giving  the  time  and  thought  that 
is  necessary  to  important  problems  of  this  character.  Aside  from 
that,  no  matter  what  restrictions  there  may  be,  the  action  of  the 
Secretary  of  the  Navy  and  the  Secretary  of  Commerce  on  this  board, 
although  as  w^e  well  know  they  are  in  constant  touch  with  marine 
affairs,  because  they  come  within  their  scope,  nevertheless  there  will 
alwa^^s  be  a  certain  atmosphere  of  suspicion  about  the  board  and  the 
fear  that  politics  will  appear.  For  myself,  I  think  it  would  be  much 
better  to  leave  the  board  at  three  or  even  to  increase  it  to  five,  and 
not  have  both  these  officials  serve  on  it. 

The  Chairman.  Do  you  mean  to  say  a  board  of  three  or  five  men, 
eliminating  the  Secretary  of  the  Navy  and  the  Secretary  of  Com- 


merce 


Mr.   Fahet.  Eliminating  them ;   yes.     If  some  means   might  be 
provided  for  securing  their  advice  and  cooperation.  I  do  not  think 


SHIPPING  BOAKD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     465 

there  would  be  any  objection.     But  that  is  wholly  unnecessary,  of 
course,  as  a  provision  of  law. 

The  Chairman.  You  speak  of  nonpartisan  boards;  I  never  saw 
one  exactly.    This  ought  to  be  bipartisan,  you  think '^ 

Mr.  Fahet.  I  think  the  bipartisan  board  better  if  the  question  of 
partisanship  can  not  be  eliminated  from  it  entirely. 

The  Chairman.  So  far  as  possible? 

Mr.  P\\HEY.  So  far  as  humanly  possible.  These  boards  should  be 
made  up  of  men  who  can  approach  this  subject  from  a  business 
standpoint  and  with  some  experience  in  the  business. 

Mr.  Bruckner.  Broad-minded  men. 

Mr.  Fahey.  Broad  minded;  certainly. 

The  Chairman.  How  about  the  salaries? 

Mr.  Fahey.  I  quite  agree  with  Mr.  Gibboney.  While  I  recognize 
the  principle  on  which  men  are  given  in  the  public  service  lower 
salaries  than  the  same  men  would  command  in  private  life,  never- 
theless I  think  with  the  constantly  rising  salaries  in  business  in 
recent  years  and  higher  cost  of  living  of  men  in  public  office,  par- 
ticularly^ in  Washington,  that  it  is  time  for  the  Government  to  be  a 
litttle  more  liberal  in  respect  to  salaries.  I  do  not  think  we  have 
a  right  to  ask  men  to  come  down  here  and  sacrifice  life  opportunities 
at  low  salaries  when  they  can  command  rery  much  more  under 
private  conditions. 

Men  are  expected  to  make  saci-ifices  to  serve  the  State,  and  it  is  a 
fine  thing  to  encourage,  but  the  (iovernment  nowadays  is  often 
asking  too  much  sacrifice.  I  think  we  would  do  much  better  if 
more  liberal  salaries  were  paid  for  work  of  this  sort. 

Mr.  Byrnes.  Do  you  think  the  presence  of  the  Secretary  of  the 
Treasury  on  the  Federal  Reserve  Board  has  made  it  a  political 
board  ? 

Mr.  Fahey.  Oh,  no ;  I  would  not  say  that  at  all. 

Mr.  Byrnes.  Do  you  think  Cabinet  officers  would  be  any  more 
partisan  than  the  average  business  man? 

Mr.  RoDENBERG.  He  is  objecting  to  the  fact  that  they  could  not 
give  attention  to  it. 

Mr.  Byrnes.  I  understood  him  also  to  say  it  would  give  a  political 
aspect  to  it. 

Mr.  Fahey.  I  think,  irrespective  of  what  the  facts  may  be,  that 
the  public  is  almost  sure  to  hold  that  impression.  The  Cabinet  officer 
after  all  is  a  leader  of  the  administration  in  power  and  is  interested 
in  the  success  or  failure  of  that  administration.  He  is  looked  upon 
as  a  party  leader,  and  it  is  very  difficult  for  anybody  to  differentiatq 
in  matters  of  this  sort. 

Mr.  Byrnes.  Do  you  think  that  the  public  holds  that  idea  as  to 
the  presence  of  members  of  the  Cabinet  on  the  Federal  Reserve 
Board? 

Mr.  Fahey.  There  is  only  one  member  of  the  Cabinet  on  the  Fed- 
eral Reserve  Board,  and  that  is  a  board  very  much  larger  than  this, 

Mr.  Byrnes.  But  they  do  hold  that  idea  as  to  that  one  member, 
do  you  think? 

Mr.  Fahey.  I  would  not  say  that ;  no. 

Mr.  Byrmes.  If  they  do  not  hold  it  as  to  that  one  member,  what 
reason  do  you  think  there  would  be  for  holding  it  as  to  members 
on  this  board? 


466      SHIPPING  EOARD^  XAVAL  AUXILIARY^  AND  MliP.CilAXT  MARINE. 

Mr.  Faiifa'.  In  this  case,  on  a  board  of  five,  two  at  tlie  outset 
would  be  membei'S  of  the  administration  of  definite  political  affilia- 
tions, and  one  more  man  of  the  same  party  affiliation  gives  political 
control  to  that  board  at  once.    Now,  I  am  not  pretending 

Mr.  Loud.  The  Interstate  Commerce  Board  has  none. 

Mr.  Faiiey.  They  do  not  have  what? 

Mr.  Loi  D.  They  have  no  Cabinet  officer  on  it.  This  would  be 
similar  to  it,  would  it  not? 

Mr.  Fahey.  I  should  judge  so.  Let  me  say  as  to  that  phase  of 
the  matter  I  am  only  reflecting  views  I  have  heard  frequently  ex- 
pressed in  the  country  in  the  last  year  and  a  half.  There  are  many 
who  contend  that,  if  the  Government  goes  into  this  business  through 
the  organization  of  corporations  to  operate  ships,  it  is  going  to  be 
almost  impossible  to  prevent  pressure  on  that  board  from  the  various 
ports  which  have  very  highly  developed  local  prejudices  and  jeal- 
ousies, 

(Galveston,  New  Orleans,  Jacksonville,  Seattle,  Norfolk,  Newport 
News,Baltimore,Philadelphia.Providence,and  Boston,  and  most  of  the 
rest  of  them  think  they  have  the  finest  harbors  in  the  United  States, 
and  are  entitled  to  all  kinds  of  opportunities  which  they  are  not 
getting  to-day.  As  a  matter  of  fact,  under  the  present  conditions  in 
re]:>orting  the  statistics  of  these  ports,  the  Department  of  Commerce 
is  in  hot  water  frequently  because  of  port  rivalries.  There  are  many 
who  claim  that  it  is  likely  to  be  very  much  more  violent  when  the 
Government  must  say  from  what  ]iorts  its  ships  shall  sail.  In  the 
minds  of  many  the  idea  of  eliminating  any  possibility  of  charging 
political  influences  in  the  composition  of  this  board  is  very  im- 
portant. 

The  Chairman.  Eight  on  that  point,  Mr.  Fahey:  If  the  Secretary 
of  the  Navy  were  eliminated,  there  is  to  my  mind  a  reason  why  I 
thought  the  Secretary  of  Commerce  might  logically  remain  on  the 
board,  and  that  is,  that  the  Department  of  Commerce  has  the  super- 
vision of  our  Steamboat-Insi:)ection  Service  and  the  Bureau  of 
Navigation  is  now  under  the  jurisdiction  of  that  department. 
Formerly  they  were  under  the  jurisdiction  of  the  Treasury  Depart- 
ment, if  he  should  be  eliminated  from  the  board,  of  course  those 
two  bureaus,  the  Bureau  of  Navigation  and  the  Steamboat-Inspec- 
tion Service,  should  also  be  transferred  to  this  board  and  under 
their  jurisdiction. 

Mr.  Fahey.  I  would  say,  Mr.  Chairman,  I  believe  if  this  board 
is  created  and  goes  ahead  that  ultimately  it  will  be  found  logical 
and  consistent  to  transfer  those  services  to  the  jurisdiction  of  this 
bonrd. 

The  Chairman.  Should  it  not  be  done  directly? 

Mr.  Fahey.  Possibly  not 

The  Chairman.  I  say  it  should  not  be  done  directly  if  you  com- 
pose this  board  of  five  meml^ers,  eliminating  the  Secretary  of  the 
Navy  and  the  Secretary  of  Commerce  from  the  board?  Should 
you  not  provide  then  that  they  should  take  over  these  two  bureaus? 
Mr.  Fahey.  I  think  it  is  a  much  better  organization  as  a  matter 
of  efficiency  in  business. 

The  Chairman.  I  think  that  that  would  be  the  proper  thing  to 
do  if  the  Secretary  of  Commerce  is  eliminated  from  the  board. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      467 

Mr.  Faiiey.  Yes.  In  section  4  the  board  is  authorized  to  charter, 
lease,  or  sell,  purchase,  etc.,  to  any  corporation,  firm  or  individual. 
I  Avonder  of  the  committee  has  in  mind  making  some  provision 
which  would  insure  American  control  of  such  corporations,  that  the 
majority  stock  of  such  corporations  should  be  owned  by  x\merican 
citizens  if  such  a  provision  is  to  remain  in  the  bill?  Without  that 
it  would  be  possible  f^r  foreign  corporations,  I  take  it,  domiciled  in 
the  United  States — I  mean  foreign-owned  corporations  that  are 
here  domiciled — to  come  under  the  provisions  of  this  section. 

Mr.  Loud.  Would  it  be  possible  to  enlarge  the  scope  of  the  Panama 
Steamship  Co.  to  take  over  that  part  of  the  design  of  the  bill? 

Mr.  Fahey.  I  could  not  say ;  I  am  not  familiar  with  that. 

Mr.  Loud.  They  are  organized  and  have  the  machinery  for  carry- 
ing on  the  business. 

Mr.  Fahey.  Yes.  At  the  end  of  section  4,  to  return  to  the  Gov- 
ernment control  of  a  ship  leased  or  sold,  as  it  stands,  it  is  to  be  taken 
over  at  such  fair  market  values  to  be  determined  by  the  board  and 
approved  by  the  President.  I  assume  generally  that  would  be 
regarded  as  a  fair  provision;  but  the  weakness  of  it  is  that  there  is 
no  power  of  appeal  upon  any  hand.  In  practice  the  board  would 
really  settle  the  price  and  will  be  quite  human  and  anxious  to  make 
as  good  a  record  as  it  can  in  its  operations.  This  opens  the  door  to 
injustice  to  those  who  are  obliged  to  turn  back  the  ships  at  a  valua- 
tion to  be  determined  by  the  board  alone.  It  is  a  detail  that  it  seems 
to  me  might  be  strengthened  by  some  power  of  appeal  or  by  provid- 
ing for  a  board  of  appraisers  or  a  board  of  arbitration. 

There  is  another  sentence,  at  the  end  of  that,  that  when  ships  are 
sold  at  public  auction  the  money  received  therefrom  shall  be  covered 
back  into  the  Treasury  of  the  United  States.  I  assume  that  that 
would  definitely  reduce  the  sum  of  money  at  the  disposal  of  this  ship- 
ping board  and  that  that  is  the  intention  of  this  committee. 

JNIr.  Edmonds.  No;  the  chairman  notified  us  the  other  day  that  a 
committee  amendment  would  be  offered  that  this  money  would  be 
turned  back  to  the  shipping  board  for  it  to  be  used  over  again. 

Mr.  Fahey.  I  see. 

Mr.  Hadley.  It  w^ould  be  a  sort  of  a  revolving  fund. 

Mr.  Fahey.  Under  section  6,  near  the  bottom,  it  says — 

and  hereafter  no  vessel  registered  or  enrolled  under  tlie  laws  of  the  United 
States  shall  be  sold  to  any  person,  firm,  or  corporation  other  than  a  citizen  of 
the  United  States. 

Is  that  intended  to  mean  vessels  which  come  into  the  registry 
hereafter,  or  from  the  time  of  the  passage  of  this  bill,  and  not  that 
ships  now  under  American  registry  shall  be  sold?  It  would  seem  a 
little  doubtful  as  to  its  languao'e. 

Mr.  Edmonds.  I  understand  from  that  section,  Mr.  Fahey,  it 
means  that  any  ship  that  is  hereafter  registered. 

Mr.  Fahey.  That  comes  into  registry  hereafter. 

Mr.  Edmonds.  Any  ship  that  comes  into  registry  hereafter  could 
not  be  sold  to  foreign  parties  without  the  consent  of  the  board.  It 
does  not  make  any  difference  whether  it  comes  in  as  a  sliip  purchased 
by  this  board,  constructed  by  this  board,  or  anything  like  that,  that 
does  not  enter  into  it,  but  any  ship  which  comes  under  the  United 
States  registry. 


468      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Fahey.  It  does  not  operate  as  to  ships  at  present  under 
American  registry? 

Mr.  Edmonds.  Yes;  they  can  not  get  a  change  of  registry  after- 
wards. 

Mr.  Fahey.  Is  that  not  a  little  bit  ambiguous? 

The  Chairman.  It  is  not  as  clear  as  it  might  be,  but  the  intention 
was  to  make  it  apph"  to  those  under  registrf  as  well  as  to  those 
which  might  hereafter  come  under  American  registry. 

Mr.  Fahey.  As  to  that.  I  have  heard  some  debate  on  it  to  the  effect 
that  if  it  is  meant  to  apply  to  ships  now  under  American  registry  it 
is  unjust.  If  it  applies  to  ships  which  may  come  under  American 
registry  later  it  might  be  considered  as  fair,  as  those  ships  hereafter 
coming  under  American  registry  would  do  so  under  notice  that  they 
must  incur  that  possible  penalty.  But  as  to  ships  which  have  been 
placed  under  American  registr}^  and  are  now  under  that  registry, 
after  the  war  if  there  should  be  a  tremendous  slump  in  the  shipping 
situation  and  they  would  be  operating  at  a  loss,  that  they  might  not 
have  an  opportunity  to  dispose  of  their  property  would  certainly  be 
argued  by  many  as  a  very  serious  injustice. 

The  Chairman.  I  will  say  that  that  provision  was  inserted  in  the 
bill  in  view  of  the  action  of  the  foreign  Governments.  I  think  all  of 
the  principal  maritime  nations  of  the  allies  and  the  central  powers 
of  Europe  are  providing  some  form  of  degree  that  their  ships  can 
not  be  transferred  to  foreign  registry.  But  that  whole  question,  of 
course,  when  the  bill  comes  up  for  consideration  in  the  committee, 
will  be  thoroughly  considered  in  view  of  the  suggestions  you  make. 

Mr.  Fahey.  I  do  believe,  in  justice  to  the  owners  and  operators  and 
as  a  matter  of  fact  as  bearing  upon  the  thing  most  needed  at  present, 
an  incentive  for  others  to  go  into  the  shipping  business,  that  it  is  a 
matter  which  should  be  seriously  considered  by  the  committee. 

The  Chairman.  That  is  a  feature,  however,  that  was  suggested  at 
that  time.  You  take  those  ships  under  foreign  flags  that  applied  for 
registry  under  the  American  flag  and  were  admitted  under  the  reg- 
istry act  of  August,  1914,  they  have  been  such  large  gainers  by 
doing  so  it  would  look  unfair  for  them,  just  as  soon  as  the  danger 
passes,  to  go  back  under  the  foreign  flag;  in  other  words,  to  seek  the 
protection  of  the  flag  of  their  own  country  when  threatened  and  to 
enjoy  the  magnificent  profits,  and  then,  just  as  soon  as  the  danger 
passes,  to  go  back  under  the  foreign  flag.  That  has  been  urged  as  a 
reason  Avhy  they  ought  not  to  do  it,  whether  there  is  any  provision 
of  law  for  it  or  not. 

Mr.  Fahey.  I  appreciate  the  force  of  that.  Of  course,  however,  as 
business  men,  the  thing  that  stimulated  the  transfer  to  the  American 
flag  was  the  safety  and  profits  under  the  present  conditions.  They 
would  have  been  under  the  American  flag  years  ago  if  there  was  the 
same  opportunity  for  profit,  in  addition  to  safety,  and  they  will  stay 
hereafter  if  those  conditions  exist. 

The  Chairman.  If  the  German  cruisers  had  not  been  active  on  the 
Atlantic  and  Pacific  I  imagine  they  would  not  have  come  under  the 
American  flag  anyway. 

Mr.  Fahey.  Yes. 

Mr.  Curry.  That  provision  is  not  prohibitive,  is  it  ? 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      469 

The  Chairman.  I  suppose  the  shipping  board  would  not  require 
a  corporation  to  keep  vessels  under  the  American  flag  where  it  would 
not  be  profitable  to  do  so. 

Mr.  Curry.  The  shipping  board  may  grant  permission  to  do  so. 

Mr.  Fahey.  Yes ;  that  is  true. 

Mr.  Curry.  I  hope  they  would  not,  but  they  might. 

Mr.  Fahey.  They  might.  But  the  thing  that  is  of  some  impor- 
tance at  this  stage  of  the  game  is  its  effect  upon  those  who  are 
encouraged  to  build  and  operate  now,  as  to  where  they  are  going 
to  be  afterwards;  because  nobody  can  put  money  into  the  shipping 
business  to-day  without  realizing  what  a  speculation  it  is,  and  with- 
out considering  what  the  results  are  going  to  be. 

I  would  like  to  point  out,  too,  in  reference  to  the  action  of  other 
countries,  that  it  was  animated  largely  by  two  things:  One,  by  the 
condition  of  war  and  a  desire  to  retain  control  of  all  of  their  own 
vessels;  and,  two,  the  consideration  of  taxation  and  the  attempt  to 
remove  vessels  from  levy.  We  would  do  the  same  thing  under  simi- 
lar conditions,  of  course. 

As  to  section  8,  its  certain  operation  is,  of  course,  one  of  the  par- 
ticular phases  of  this  bill  concerning  which  business  men  are  critical ; 
and  if  the  committee  is  able  to  devise  any  way  by  which  the  possi- 
bility of  continued  competition  of  Government-owned  ships  with 
privately-owned  vessels  can  be  removed,  and  still  make  the  act  work- 
able, I  am  sure  it  would  be  regarded  with  much  greater  approval 
by  business  men. 

Section  9,  as  to  the  determination  of  rates  which  are  just  and  rea- 
sonalile,  I  think  that  is  a  little  at  variance  with  the  method  of  opera- 
tion of  the  interstate  commerce  act,  in  that  railroad  rates  are  filed 
by  the  carrier  and  are  then  passed  upon  by  the  commission.  I  under- 
stand that  here  it  is  contended  in  order  to  secure  the  quick  action 
necessary,  it  would  not  be  pi-acticable  to  go  through  the  steps  of 
filing  a  rate,  providing  for  a  hearing,  etc.  That  is  not  likely  to  be 
necessary.  Nevertheless,  there  is  apprehension  concerning  the  pro- 
visions here,  and  the  question  is  whether  it  is  not  possible  to  modify 
the  plan  if  this  feature  of  the  bill  is  retained. 

In  the  last  part  of  section  9,  concerning  the  report  of  the  board 
to  the  President  and  to  Congress,  toward  the  end  it  says  "  to  gather 
and  report."  I  would  like  to  suggest  that  the  committee  consider 
inserting  there  the  words  "from  time  to  time"  to  convey  the  idea 
of  continuous  action  in  that  direction. 

Again,  as  to  the  various  details  of  the  interstate  commerce  act, 
it  is,  of  course,  frequently  urged,  as  you  gentlemen  know,  that  it  is 
undesirable  to  incorporate  in  any  law  blanket  legislation  including 
another  act  in  its  entirety,  because  it  is  rather  confusing.  I  believe 
the  committee  should  seriously  consider  whether  the  phases  of  the 
interstate  commerce  act  which  are  intended  to  applv  ought  not  to 
be  specifically  set  forth.  I  am  not  sure,  for  example,  whether  the 
bill  providing  for  the  valuation  of  railroads  is  an  amendment  to 
the  interstate  commerce  act  or  a  special  act.  My  impression  is  that 
it  is  an  amendment.  If  that  be  so,  I  assume  it  would  also  be  included 
in  its  entirety  in  this  bill.  I  do  not  know  whether  that  is  intended 
or  not. 


470      SHIPPIXG  BOAED^  NAVAL  AUXILIARY,  AXD  MERCHANT  MARINE. 

There  are  other  features  .worthy  of  incidental  discussion,  but  I 
haAe  ah'eady  taken  so  much  of  the  time  of  the  committee  that  I 
think  it  is  unfair  for  me  to  impose  longer.  In  general  I  belieA'e  we 
should  not  permit  further  delay  in  taking  some  step  toward  solving 
the  merchant  marine  problem,  and  that  this  bill  has  many  promis- 
ing features.  I  see  no  reason  why  defects  brought  out  in  these  hear- 
ings can  not  be  cured  and  a  workable  measure  agreed  on.  It  is  at 
least  a  beginning,  and  we  need  to  begin. 

Mr.  Greene.  Is  that  included  in  your  statement — what  you  re- 
ferred to  as  the  other  matters? 

Mr.  Fahey.  They  are  not  of  any  great  importance.  Mr.  Greene. 
There  are  two  things  I  would  like  to  say,  however,  while  I  have  the 
attention  of  the  committee,  if  I  may  be  permitted,  in  view  of  the 
testimony  of  Mr.  Gibboney.  One  is,  the  suggestion  of  ]Mr.  Morse's 
companv  paying  the  Government  6  per  cent  on  ships.  I  should  think 
if  Mr.  Morse's  company  is  making  the  extraordinary  profits  reported, 
and  there  is  an}?-  assurance  of  their  continuance,  that  the  public  might 
be  interested  to  advance  the  money.  But  if  the  public  is  unwilling 
to  advance  the  money  to  Mr.  Morse  on  a  6  per  cent  basis,  I  should 
think  it  extremely  doubtful  if  the  United  States  would  want  to  put 
its  property  in  his  control  on  a  6  per  cent  bas's. 

Moreover,  it  is  stated  that  Mr.  Morse's  company  is  prepared  to 
construct  nine  vessels  now.  If  the  company  is  really  prepared  to 
build  those  vessels  now,  in  view  of  the  170  per  cent  profits.  I  should 
think  they  would  be  building  them  without  waiting  for  any  action 
by  the  Government  or  anybcdv  else. 

Mr.  RowE.  Mr.  Chairman,  I  have  just  learned  that  one  of  the  gen- 
tlemen from  New  York  is  leaving  to  go  South  on  the  2  o'clock  train, 
and  I  wonder  if  we  could  not  hear  his  statement  now. 

Mr.  Curry.  I  would  like  to  ask  Mr.  Fahey  one  or  two  questions,  if 
there  is  no  objectic  n. 

You  stated.  Mr.  Fahe}-,  you  believe  that  this  shipping  board  should 
be  a  board  of  experts. 

Mr.  Fahey.  Yes;  should  be  a  board  of  practical  business  men  and 
experts. 

Mr.  Curry.  Practical  business  men  ? 

Mr.  Fahey.  I  would  not  undertake  to  say  by  that,  Mr.  Congress- 
man, that  every  member  of  the  board  should  be  a  man  of  practical 
experience  in  shipping,  for  I  believe  that  business  judgment  in  the 
new  problems  to  be  dealt  with  here  is  quite  as  valuable  as  the  other. 

Mr.  Bruckne*.  A  good  commercial  man.  you  mean? 

Mr.  Fahey.  I  do;  men  of  bus'ness  experience. 

IMr.  Loud.  And  three  out  of  five. 

Mr.  Curry.  And  this  board  should  take  over  the  duties  and  powers 
of  the  Department  of  Commerce? 

Mr.  Fattey.  Of  the  Bureau  of  Navigation  and  the  Steamboat-In- 
spection Service. 

ISfr.  Curry.  Those  are  now  under  the  Department  of  Commerce.     , 

The  Chairman.  Under  the  laAv  the  onlv  qualification  for  member- 
ship on  the  Interstate  Commerce  Commission  is  that  they  shall  not 
be  interested  or  stockholders  in  anv  transportation  company  under 
their  control.     It  is  assumed  that  the  President  in  naming  men  for 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      47  1 

the  commission  selects  them  with  reference  to  their  fitness,  and  I 
assume  he  would  do  so  in  this  instance.  But  if  we  could  prescribe 
their  peculiar  qualifications  in  the  bill  we  would  have  no  objection 
to  doing  thatj  although  he  might  select  men  of  very  different  caliber 
notwithstandmg. 

Mr.  Curry.  I  have  introduced  a  merchant-marine  bill,  including 
those  two  features,  that  the  commission  should  be  composed  of  five 
experts,  one  of  whom  is  to  have  practical  experience  at  sea;  two 
having  had  practical  experience  in  shipping,  as  importers  or  ex- 
porters, along  that  line;  one  to  be  a  naval  architect  and  engineer, 
and  one  to  be  learned  in  maritime  law.  I  also  provide  for  the  trans- 
ferring of  the  duties  and  powers  of  the  Bureau  of  Navigation  and 
the  Steamboat-Inspection  Service  to  this  board,  and  instead  of  the 
Government-ownership  feature  of  the  bill  I  have  a  Government  loan. 
I  do  not  know  whether  you  have  seen  the  bill  or  not.  But  do  you 
think  that  so  far  as  this  bill  is  concerned  it  would  be  improved  by  a 
board  of  experts,  and  that  board  to  have  the  absolute  control  trans- 
ferred to  them  from  those  boards  of  their  jurisdiction,  so  far  as  ship- 
ping is  concerned  ? 

Mr.  Fahey.  As  to  the  latter  feature,  yes.  As  to  the  board  of 
experts,  I  think  it  would  depend  upon  what  you  set  forth  as  specifi- 
cations for  the  experts.  I  believe  that  in  these  Government  boards 
it  is  very  easy  to  carry  too  far  the  qualifications  of  the  type  of  men 
who  must  go  on  the  board.  I  believe  it  is  desirable  to  leave  that 
somewhat  elastic. 

As  to  this  whole  question  of  shipping  here,  I  believe  there  is  one 
phase  of  it  that  must  not  be  lost  sight  of,  and  that  is  that  the  ship- 
ping business  is  itself  a  business  calling  for  considerable  skill  and 
we  do  not  know  too  much  about  the  shipping  business  in  the  United 
States  to-day.  Moreover,  even  in  those  countries  enjoying  a  great 
merchant  marine,  particularly  England,  with  low  rates  of  wages  and 
all  other  advantages,  there  have  been  a  great  many  failures  in  the 
shipping  business  because  of  lack  of  sufficient  business  knowledge 
and  experience. 

Mr.  Greene.  It  is  a  business  of  its  own? 

Mr.  Fahey.  Certainly  it  is. 

Mr.  Greene.  Not  ever}-  man  could  be  picked  up  off  of  the  streets 
or  even  in  Congress  here,  who  would  be  fitted  for  that  work  ? 

Mr.  Fahey.  It  is  one  of  our  great  businesses  of  which  knowledge 
in  this  country  is  comparatively  limited  as  compared  with  our  other 
enterprises. 

Mr.  Curry.  If  Ave  could  not  get  that  knowledge  from  people  who 
have  had  practical  experience  at  sea,  practical  experience  in  ship- 
ping, practical  experience  as  naval  architects  and  engineers,  practical 
experience  in  the  maritime  law,  where  would  we  get  them? 

Mr.  Fahey.  Of  course  men  of  the  type  of  which  you  speak  pre- 
sumably would  have  knowledge  of  the  business.  But  my  point,  how- 
ever, is  that  I  think  it  is  unwise  to  make  too  strict  limitations  that 
there  shall  be  one  man  of  one  type  and  another  man  of  another ;  that 
you  thereby  tie  up  your  commissions  pretty  hard  and  do  not  always 
get  the  best  results. 


472      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

(The  referendum  and  summary  offered  by  Mr.  Fahey  are  as  fol- 
lows:) 

THE  UPBUILDING  OF  THE   MERCHANT  MARINE. 
Referendum  No.  9,  Chamber  of  Commerce  of  the  United  States. 


Number  of  organizations  qualified  to  vote- 
Number  of  organizations  voting 


Summary  0/  organisation  vote  on  referendum  No.  9. 


575 

282 


Organi- 
zations. 

Mem- 
bers. 

Organizations  acting  at  meeting  of  membership: 

U 
4 

1,804 

206 

Total 

15 

2,010 

Organizations  acting  at  meeting  of  membership  after  having  a  committee  malce  a 
report: 
Local 

19 
5 

11,668 

National        .          

1,072 

Total 

24 

12, 730 

Organizations  acting  by  submitting  questions  to  members  for  mail  ballot: 

Local          

11 
16 

8,706 

3,330 

Total 

27 

12, 036 

Organizations  for  which  directors,  or  a  similar  governing  board,  undertook  to  act: 

48 
23 

26,240 

National 

29, 648 

Total                           

71 

55, 888 

Organizations  for  which  directors,  or  similar  governing  board,  undertook  to  act,  but 
only  after  receiving  report  of  a  committee: 
Local                  .              

58 
4 

60, 363 

National     

900 

Total 

62 

61,263 

Organizations  for  which  committee  undertook  to  act,  whether  committee  of  the  gov- 

mittee: 
liOcal 

5 
3 

1,478 

National     

799 

Total 

8 

2,277 

Organizations  for  which  the  executive  officers  undertook  to  act: 

5 

1,182 

National  

3,955 

Total 

11 

5,137 

Organizations  which  sent  out  to  membership  referendum  pamphlets  or  statements 
of  their  own  based  upon  the  national  chamber's  referendum  pamphlet: 

Local          .' 

7 
5 

4,765 

National     

1.561 

Total                   .                           

12 

6,32& 

[Chamber  of  Commprce  of  the  United  States  of  America,  Riggs  Building,  Washington,  D.  C.) 
.JULY  9,  101.5.     SPECIAL  BULLETIN. 

Referendum  No.  9. — The  Upbuilding  of  the  Merchant  Marine. 

During  the  autumn  of  1914  a  special  committee  of  the  chamber  canvassed  pro- 
posals  made   iii   recent  years  for   increasing  the  merchant   marine  under  the 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      473 

American  flag.  A  report  of  this  committee  was  before  tlie  tliird  annual  meeting 
of  tlie  cliamber,  whicli  was  lield  in  February  and  wliich  devoted  more  attention 
to  the  metliods  of  promoting  the  American  merchant  marine  than  to  any  other 
subject.  At  the  annual  meeting  it  was  voted  that  a  referendum  sljould  be  taken 
among  the  organizations  in  the  membership  of  the  cliamber. 

Accordingly  on  May  8  nine  questions  were  placed  before  the  membership  of 
the  chamber,  separated  on  two  ballots  accordingly  as  the  questions  were  based 
primarily  upon  issues  raised  by  the  report  of  the  special  committee  or  were 
added  by  the  board  of  directors  of  the  chamber.  Under  the  by-laws  of  the  cham- 
ber the  voting  closed  at  midnight  on  June  22,  when  282  organizations  had  filed 
ballots.  These  organizations  are  situated  in  39  States,  the  District  of  Columbia, 
Alaska,  Hawaii,  the  Philippines,  Porto  Rico,  and  Paris,  France. 

In  the  balloting  each  organization  casts  as  many  votes  as  it  may  have  dele- 
gates at  au  annual  meeting  of  the  chamber.  The  number  of  delegates  depends 
upon  the  number  of  members  in  an  organization,  but  in  no  case  falls  below  1  or 
exceeds  10. 

The  results  of  the  balloting  in  referendum  No.  9  were  as  follows : 

Ballot  No.   I. 


I.  Do  you  favor  tTie  Government  vndertaV-in?  the  purchase,  construction, 
or  charter  of  vessels  for  mercantile  purposes,  together  with  the  operation 
of  such  vessels? 
II.  Do  you  favor  ownership  of  merchant  vessels  by  the  Government  but 
with  operation  by  pvivete  parties  under  leases? 

III.  Do  yon  favor  subsidies  from  the  Government  sufRcient  to  offset  the 
difference  in  cost  between  operation  of  vessels  under  the  American  flag 
and  opention  in  the  S'>me  deep-sei  trades  under  foreisrn  flaps? 

IV.  Do  yon  favor  subventions  from  the  Government  ti  establish  regular  mail 
and  frei  Yt  lines  under  t'e  American  flap  to  countries  in  wlich  tbe  com- 
mercial interests  of  the  United  St  tes  are  important,  and  to  American 
dependencies? 


89  votes  in  favor. 
690  votes  opposed. 

51  votes  in  favor. 
713  votes  opposed. 
554  votes  in  favor. 
189  votes  opposed. 

713  votes  in  favor. 

52  votes  opposed. 


Ballot  No.  2. 


I.  The  committee  recommends  the  creation  of  a  Federal  shipping  board  to 
investigate  and  report  to  Conaress  regarding  the  navigation  laws  and 
to  have  full  jurisdiction,  under  tlie  law,  in  all  matters  pertaining  to 
over-sea  transportation. 
II.  The  committee  recommrnds  that  ths  GovernmTt  subscribe  to  the  entire 
stock  of  a  marins  development  company  with  a  capital  of  thirty  mil- 
lion dollars,  this  company  to  have  authority  for  seven  years  to"  lend, 
under  supervision  of  the  t'ederal  shipping  brard,  upcn  the  sfcurity  of 
first  mortpases  on  m?rchant  vessels,  tai  in?  as  e  vid'^nee  of  this  indebted- 
ness bonds  which  bear  a  fair  rate  of  int-^rest  and  contain  provisions  for 
amorti  ation,  the  dovelopmi^nt  '-■ompany  to  ruarantee  the  bonds  as  to 
prtnr'ipal  and  interest  and  sell  them  to  the  public. 

III.  The  committee  recommends  that  the  ocran-mail  law  of  1891  be  amended 
by  lowerini  the  speed  for  first-class  steamers  from  twenty  to  sixteen 
knots  and  for  second-class  steamers  from  sixteen  to  twelve  knots,  and 
by  making  the  compensation  adec  uat»^  to  p"rmit  the  establishment  of 
lines  of  steamships  carrytns  both  mail  and  freight. 

rv.  The  committee  recomnirnds  that  there  should  be  lecislation  abolishing 
deferred  rebates  and  providing  for  supervision  of  rates  by  the  Federal 
shipping  board,  with  reciuirements  for  filinp  with  the  board  schedules 
of  rates  and  all  agreements  among  over-s^a  lines. 
v.  The  committee  recommends  that  Federal  licenses  should  be  taken  out 
by  lines,  domestic  and  foreien,  en?a?ed  in  shipping  between  ports 
of  the  United  States  and  other  countries. 


639  votes  in  favor  of  the  rec- 
ommendation. 
116  votes  opposed. 

416  votes  in  favor  of  the  rec- 
ommendation. 
314  votes  opposed. 


692  votes  in  favor  of  the 

recommendation. 
58  votes  opposed. 


601  votes  in  favor  of  the 

recommendation. 
130  votes  opposed. 

610  votes  in  favor  of  the 

recommendation. 
120  votes  opposed. 


The  attitude  of  the  chamber,  under  the  provisions  of  the  by-laws,  can  be 
determined  only  if  two-thirds  of  the  votes  on  a  proposition  are  cast  one  way  or 
the  other.  Consequently  referendum  No.  9  has  defined  the  attitude  of  the 
chamber  with  respect  to  all  of  the  propositions  stated  on  ballot  No.  1  and  all 
of  the  recommendations  on  ballot  No.  2  except  the  second,  concerning  the 
organization  of  a  marine  development  company. 

Details  of  the  votes  are  tabulated  on  the  next  page.  Notes  are  added  to 
indicate  such  definite  action  as  members  took  in  connection  with  their  votes. 


474      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


Ballot  No.  1. 

Ballot  No.  11. 

Name  of  organization. 

I 

II 

III 

IV 

I 

II 

III 

IV 

V 

o 

a 

< 

o 

< 

a 

o 

B 

'5 

< 

1 

'S 

< 

o 

& 

a 

C 

o 

1 

1 

3 

1 

I 
10 

6 
5 

a 

a 
< 

6 
10 
1 

1 
1 

3 

1 

1 

10 

6 
5 
2 

4 

1 

3 

1 

4 
8 
1 

1 

1 
6 
1 

1" 

< 

Alabama: 
Mobile- 
Cotton  Exchange 

1 

1 

1 

1 
3 
1 

1 

1 
1 
3 

1 

1 
10 

6 
5 
2 
4 

1 
1 
3 
1 

4 

8 

1 

1 
1 
6 
1 

Alaska: 

Cordova — 

1  !... 

1 

...    3 

1  '... 

10  L.. 

6    .. 

6 
10 

1 

3 

1 

10 

5 
2 

1 

4 

6 

6 
10 

1 
1 

I 

3 

1 
1 

lo 

6 
5 
2 

4 

10 
1 

1 
3 

4 

8 

1 

1 

1 
6 

1 

6 

... 

Arizona: 

Phoenix- 
Chamber  of  Commerce  

3 

1 

Arkansas: 

Blytheville— 

C  hamber  of  Commerce 

10 

6 
5 
2 

10 

2 

4 

1 

6 
5 

6 
10 

California: 
Fresno- 

1    ... 
10    ... 

6    ... 

1 
...     Fi 

Los  Anaeles— 

Chamber  of  Commerce 

Oakland— 

(b)  Chamber  of  Commerce  and 
Commeri^ial  Club       

Pasadena — 

Bo ird  of  Trade 

5    ... 
2    -- 

Riverside- 
Chamber  of  Commerce 

2 
4 

10 

1 

8 

6 

Sacramento^ 

4 

San  Die?o— 

Chamber  of  Commerce     

6 

6 
10 

fi 

San  Francisco — 

10    -- 

in 

Dried  Fruit  Association  of  Cali- 
fornia   

1 
1 

1 

Shipowners'  Association  of  the  Pa- 
cific Coast 

1    ... 

3  ... 
1    ... 

1 

4  1 

San  Jose- 
Chamber  of  Commerce          .      

3  1... 

4  ... 
8    ... 
1    ... 

'!■- 

1  ... 
1 

1  --^ 

Turlock— 

Board  of  Trade 

1 

Co'oTdr. 

Cobrado  Springs- 

Den  er — 

Chamber  of  Commerce.   .. 

8 

1 
1 

1 
1 

6 

Greele.'— 

Commercial  Club 

Connecticut: 
Derl).v— 

Chamber  of  Commerce 

Meriden— 

Chamber  of  Commerce 

New  Ha  en— 

Chaml)er  of  Commerce 

i 

Lumber   Dealers'   Association   of 

2 

6 
3 

New  London- 

Norwich — 

Board  of  Trade 

2 

2 

2 
1 

6 
3 

2 

6 
3 

2 

2 

1 

6 
3 

2 

6 
3 

2 

2 

1 

6 
3 

South  Manchester- 
Chamber  of  Commerce 

2 

6 

2 

6 
3 

6 
3 

2 

2 

District  of  Columbia: 
Washington- 
Board  of  Trade 

National    Association    of    Piano 

3 
5 

Florida: 

Jacksonville — 

Georgia: 

Atlanta — 

5 
? 

5 

'=, 

5 
2 
1 

5 
2 
1 

5 
2 
1 

5 
2 

1 

5 

2 
1 

5 
2 

Brunswick- 

2     2 

ll  1 

Savannah — 

(d)  Board  of  Trade 

1 

1 

SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      475 


Name  of  organization. 


Ballot  No.  1. 


Ill 


IV 


Ballot  No.  11. 


II 


III 


IV 


Hawaii: 

Honolulu- 
Chamber  of  Commerce 

Illinois: 
Alton- 
Board  of  trade 

Aurora — 

Fox  River  Valley  Manufacturers' 

Association 

Bloomington — 

Commercial  club 

Champaign- 
Chamber  of  Commerce 

Chicago- 
American  Association  of  Refriger- 
ation  

Association  of  Commerce 

Bureau  of  Barley  and  Malt  Sta- 
tistics   

Central     Bureau     of    Extension 

Table  Manufacturers 

Central  Supply  Association 

Coal  Merchants'  Association 

Chicago  Typothetae 

Electrical  Supply  Jobbers'  Associ- 
ation  " 

nimois  Ice  Dealers'  Association. . . 
Illinois  Manufacturers'  Association 
Illinois  State  Brewers'  Association. 

(e)  Industrial  Club 

Lumbermen's  Association  of  Chi- 
cago   

National  Association  of  Master 
Bakers 

National  Association  of  Retail 
Druggists 

(f)  National  Association  of  Tanners 
National  Builders'  Supply  Associ- 
ation  

National  Bureau  of  Metal  and 
Spring  Bed  Manufacturers 

National  Confectioners'  Associa- 
tion  

National  Hardwood  Lumber  As- 
sociation   

National  Implement  and  Vehicle 
Association 

National  Shoe  Wholesalers'  Asso- 
ciation   

National  Slack  Cooperage  Manu- 
facturers' Association 

Tight  Barrel  Stave  Manufacturers' 
Association 

United  Typothetae  and  Franklin 
Clubs  of  America 

Western  Cigar  Box  Manufacturers. 

Wholesale  Saddlery  Association . . . 
Danville- 
Industrial  Club 

Decatur— 

Association  of  Commerce 

East  St.  Louis- 
Commercial  Club 

Freeport— 

(g)  Chamber  of  Commerce 

Joliet— 

Association  of  Commerce 

Peoria— 

Association  of  Commerce 

(h)  Illmois  Commercial  Federation 
Peru — 

Business  Men's  Association 

Rockford— 

Chamber  of  Commerce 


476      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCUANT  MARINE. 


Name  of  organization. 


Ballot  No.  1. 


Indiana: 
Argos — 

National  Retail  Hardware  Asso- 
ciation   

Columbus^ 

Chamber  of  Commerce 

Indianapolis — 

Board  of  Trade 

Chamber  of  Commerce 

National  Veneer  and  Panel  Manu- 
facturers   

Western  Paper  Box  Manufacturers 
Lafayette- 
Chamber  of  Commerce 

M  unci  2— 

Commercial  Club 

Richmond — 

Chamber  of  Commerce 

Shelbyville— 

Manufacturers'  Club 

Iowa: 

Clinton — 

Commercial  Club 

Des  Moines 

Barliers  Supply  Dealers'  Associa- 
tion of  America 

Greater  De^  Moines  Committee 

Kentucky: 

Louisville — 

Board  of  Trade 

Louisiana: 

New  Orleans — 

(i)  Association  of  Commerce 

(j)  Board  of  Trade 

Southern  Pine  Association 

Maine: 

Bansor— 

Maine  State  Board  of  Trade 

Lewiston— 

Chamber  of  Commerce 

Portland — 

Chamber  of  Commerce '.... 

Maryland:                                                      j 
Baltimore- 
Board  of  Trade 

Canned  Goods  Exchange 

(k)  Merchants  and  Manufacturers'  | 

Association '... 

liitional  Lumber  Exporters'  Asso-  j 

tion 1... 

Frederick-  I 

Board  of  Trade !  1 

Massachusetts:  I 

Boston— 

(1 )  Chamber  of  Commerce ' . . . 

Massachusetts    State    Board    of  j 

'      Trade '... 

New  England  Hardware  Dealers'  j 

Association 

New  England  Shoe  and  Leather  j 

Ji  ssociation 

Brocton —  1 

Chamber  of  Commefrce '  3 

Fall  River—  I 

Chamber  of  Commerce ' . . . 

Framingham—  I 

Board  of  Trade ' . . . 

Greenfield—  I 

Board  of  Trade 

Haverhill—  I 

Board  of  Trade 

Holvoke—  I 

"Chamber  of  Commerce 

North  Attleboro—                                    i 
Board  of  Trade 


HI 


3     3 


1  I  1 

t 

2l2 
4  I  4 


IV 


(^    < 


1  I. 

2  !. 


Ballot  No.  11. 


Ill 


f^  H 


10  !-. 
1 


I 
10 

1 

5 
2    .. 


1  i.. 


IV 


3 

S 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     477 


Name  of  organization. 


Ballot  No.  1. 


Ill 


IV 


Ballot  No.  11. 


Ill 


IV 


Massachusetts— Continued . 

Salem— 

Chamber  of  Commerce 

Essex  Comity  Associated  Boards 
of  Trade 

Springfield- 
Board  of  Trade 

Ware— 

Board  of  Trade 

Worcester — 

Chamber  of  Commerce 

Michigan: 

Detroit- 
Board  of  Commerce 

Flint- 
Board  of  Commerce 

Fremont — 

Board  of  Trade 

Grand  Rapids — 

Association  of  Commerce 

National     Commercial     Fixture 

Manufacturers'  Association 

Miimesota: 

Duluth— 

Board  of  Trade 

Commercial  Club 

Minneapolis- 
Cm)  Chamber  of  Commerce 

C  ivic  and  Commerce  A.ssociation 

Moorhead — 

Commercial  Club 

St.  Paul- 
Association  of  Commerce 

Stillwater — 

Civic  Club 

Winona — 

Association  of  Commerce 

Missisippi: 

Greenwood — 

Business  League 

Missoiu'i: 

Kansas  City — 

Board  of  Trade 

Commercial  Club 

Southwestern     Interstate     Coal 
Operators'  Association 

St.  Joseph- 
Commerce  Club 

St.  Louis- 
Business  Men's  League 

Merchants'  Exchange 

National     Leather     and     Shoe 
Finders'  Association 

Springfield- 
Jobbers  and  Manufacturers'  Asso- 
ciation   

Montana: 

Columbus- 
Stillwater  Club 

Nebraska: 

Lincoln — 

Commercial  Club 

Omp.ha — 

Commercial  Club 

New  Jersey: 

Bayonne — 

Chamber  of  Commerce 

Elizabeth- 
Board  of  Trade 

Jersey  City- 
Co)  New  Jersey  State  Chamber  of 
Commerce 

Newark- 
Board  of  Trade 

New  Brunswick — 

Board  of  Trade 


2     2    . 


32910—16- 


-31 


478      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


Ballot  No.  L 

Ballot  No.  11. 

Name  of  organization. 

I 

II 

III 

IV 

I 

II 

Ill 

IV 

V 

i 
fe 

< 

3 

<! 

o 

Cm 

1 
< 

Pm 

a 

a 
< 

0 

a 

< 

1 

i 

a 
< 

a 

a 
< 

0 

1 
< 

•5 

a 

a 

< 

New  Jersey— Continued. 
Paterson— 

Chamber  of  Commerce 

3 

1 
2 

6 
2 
10 

1 

2 
3 
2 

1 

3 
1 
2 

6 
2 
10 

1 

2 
3 
2 

1 

3 

1 
2 

2 
10 

1 

2 
3 

1 

6 

3 

1 
2 

2 
10 

1 

2 

1 

6 

3 

"2 

3 
1 
2 

2 
10 
1 

2 
3 
2 
1 

1 

6 

3 

1 
2 

... 
2 

1 
2 

2 

1 

6 
10 

3 
1 

3 

1 
2 

10 
1 

2 

2 
1 

1 

6 
2 

3 

1 

2 

2 
10 
1 

2 

2 

1 

1 

... 

6 
3 

3 

1 
2 

2 
10 

1 

2 

2 

1 

1 

Rahway— 

Board  of  Trade 

Trenton- 
Chamber  of  Commerce 

New  York: 
Albany- 

f, 

Auburn— 

(p)  Chamber  of  Commerce 

Buffalo- 
Chamber  of  Commerce 

Canajoharie— 

Cohoes— 

Business  Men's  Association  and 
Board  of  Trade 

Elmira— 

Chamber  of  Commerce 

3 

Lakemont— 

National  Gas  Engine  Association.. 
Lancaster — 

Board  of  Trade 

Little  Falls- 
Merchants    and     Manufacturers' 
Association 

Lockport— 

Board  of  Trade 

1 

1 

1 

3 

1 

2 

2 

1 
3 
1 

io' 

1 

1 

10 
4 

2 

1 

1 
3 
2 

1 

10 
2 

1 
3 

1 

Long  Island  City- 
Chamber  of  Commerce  of  Borough 

1 

3 

1 

2 

2 

1 
3 
1 
1 

10 
1 
1 

1 

10 

4 

2 

1 

1 

3 

2 
2 

1 

10 
2 

1 
3 
1 

'i' 

1 

3 

1 

2 

2 

1 
3 
1 
1 
10 
1 
1 

1 

10 

4 

2 

1 

1 

3 

2 
2 

1 

10 
2 

1 
3 
1 

1 
1 

3 

1 

2 

2 

1 
3 
1 

io' 

1 

1 

10 

2 

1 

2 

1 

3 

'2 

1 

1 

3 

1 

2 

2 

1 
3 

1 
1 
in 

i' 
3 

2 
2 

"i' 

io" 

1 

1 

1 

1 
3 

i' 

1 
1 

3 

1 

2 

2 

1 
3 

1 

io' 

1 

1 
1 

1 

2 

2 

1 
3 
1 

1 

i' 

3 

1 
1 

3 

Queens  Boro  Board  of  Trade 

Newburgh- 

Chamber  of  Commerce 

New  York — 

(q)  American  Exporters'  and  Im- 
porters' Association 

American     Hardware     Manufac- 
turers' Association 

... 

2 

2 

1 
3 

1 

American  Paper  and  Pulp  Asso- 

B  ridge  Builders'  and  Structural 

Eastern  Millinery  Association 

1 

(r)  Merchants'  Association 

10 

"i" 

10 

Metalware  Club 

J  1 

National  Association  of  Clothiers .. 

*        (s)  National  Association  of  Glue 
and  Gelatin  Manufacturers 

1 

10 

2 

1 

1 
10 

4 

1 

10 
4 

'i' 

1 

(t)  National  Association  of  Manu- 
facturers   

2 

4 

2 
1 

10 

10 

4 

2 

1 

National  Association  of  Stationers 
and  Manufacturers .•. . 

4 

2 
1 

National  League  of  Commission 
Alerchants 

National  Paper  Trade  Association. 
National    Piano    Manufacturers' 

... 

National    Wholesale    Druggists' 

3 
9 

3 
2 

'2 

1 

3 

2 
2 

1 

10 
2 

1 

3 

2 
2 

1 
10 

— 

3 

2 
2 

National      Wholesale      Lumber 

2     2 

Printing     Press     Manufacturers' 

io' 

(u)  Produce  Exchange 

10 

2 

1 
3 

1 

Refractories  Manufacturers'  Asso- 

1 

1 

1 

1 

(v)  Rubber  Club  of  America 

Silk  Association  of  America 

1 

... 

1 

1 

1 

.. . 

SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MEECHANT  MAEINE.      479 


Ballot  No.  1. 

Ballot  No.  11. 

Name  of  organization. 

I 

II 

III 

IV 

I 

II 

III 

IV 

V 

a 

IS 

o 

a 
'3 

< 

S 
(^ 

a 

i 
fc 

a 

fe 

fe 

0 

< 

i 

a 

c 

0 

< 

New  York— Continued. 
New  York— Continued. 

(w)  Swedish   Chamber   of  Com- 

• 

2 

4 

2 

1 
1 

2 
2 
1 
3 
8 
1 
2 
2 
1 

2 

1 

i 

"'T 

...i  4 

...2 

...i  1 
...|1 

...'  2 
2    ... 
1    ... 

...    3 
S 

2 

i' 

2 

1 
3 
8 

2 
2 
1 

2 
1 

4 
1 
2 

1 

... 

2 

4 

2 

1 
1 

2 
2 
1 
3 

8 
1 
2 
2 

1 

2 
1 

2 

4 

2 

1 
1 

2 
2 
1 

2 
4 
2 

1 
1 

2 
1 

2 
3 

2 

4 

2 

1 
1 

2 
1 

2 
3 

2 

4 

2 

1 
1 

2 

1 

merce. 

United  States  Brewers'  Associa- 
tion. 

United  States  Trade  Mark  Asso- 

! 
4 

... 

ciation. 
(11)  ^\^lolesale  Shoe  League 

Writing  Paper  Manufacturers'  As- 
sociation. 
Niagara  Falls- 

3 

1 

2 
1 

2 

2 

Oneida— 

Owego— 

Poughkeepsie— 

Chamber  of  Commerce 

Rochester — 

Chamber  of  Commerce 

3 

National  Boot  and  Shoe  Manufac- 

1 

2 

2 

1 

2 
1 

... 

1 
2 
2 

1 

1 

2 
1 
2 
1 

1 
2 
3 
1 

8 

i" 

1 
1 

2 
1 

1 

2 
2 

1 

1 

2 
1 

2 

1 

2 

2 

1 

2 
1 

1 
2 

1 
2 
2 

1 

2 
1 

10 
1 

6 

1 
2 
2 
1 

1 

2 
1 

1 
2 
3 

1 

8 

'5" 
10 

2 

2 

3 

3 

Retail  Lumber  Dealers'  Associa- 

Rome— 

Seneca  Falls— 

Syi-acuse— 

■> 

1 

Troy- 

1 

North  Carolina: 
Asheville — 

Board  of  Trade 

2 

1 
2 

2 
1 
2 
1 

1 

2 

2 
1 
2 

2 

2 

Marion- 
Board  of  Trade 

1 

2 

1 

Raleigh— 

C'hamber  of  Commerce 

1 
1 

2 

1 

2 

1 

10 
6 

2 

1 

1 
2 
3 

'i' 

1 
1 

2 

2 

1 

1 
2 

3 
1 

8 

Rocky  Mount- 
Chamber  of  Commerce 

North  Dakota: 
Bismarck— 

1 

8 
10 

1 
2 
3 

1 

8 

i' 

10 

Fargo— 

Grand  Forks- 

Jamestown— 

Commercial  Club 

1 

8 

10 
1 

1 

6 
5 

10 

e 

3 
3 

2 

1 
8 

10 

1 

1 
1 

6 
5 

10 

2 
3 
3 

1 

1 
1 

6 
5 

10 

2 

2 

3 

8 

10 
1 

3 

1 

8 

10 

1 

1 
1 

6 
5 

10 

2 

2 

3 

3 

Ohio: 

Akron- 

Cincinnati— 

Chamber  of  Commerce  and  Mer- 
chants' Exchange 

1ft 

Refrigerating  Machinery  Club  . 

Cleveland- 
National  Cloak,  Suit,  Skirt,  and 
Dress  Manufacturers'Association 

'i' 

1 
1 

National  Petroleum  Association. . . 
Columbus- 
Chamber  of  Commerce 

6 
5 

3 

1 

6 
5 

10 

2 

2 

3 

3 

6 

Ohio  State  Board  of  Commerce 

5 
to 
2 
2 
3 
3 

... 

5 
10 
2 
2 
3 
3 

Dayton- 
Greater  Dayton  Association 

10 
2 
2 

3 

Lima- 
Chamber  of  Commerce 

2 

Portsmouth- 
Board  of  Trade 

Youngstown— 

(  hamber  of  Commerce 

Zanesville- 

I  hamber  of  Commerce 

480      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


Name  of  organization. 


Oregon: 

Marsh  field — 

Chamber  of  Commerce 

Portland — 

(x)  Chamber  of  Commerce 

Pennsylvania: 
Altoona— 

(y)  Chamber  of  Commerce 

Beaver  Falls — 

Manufacturers'  Association  of  Bea- 
ver County 

Tile  Manufacturers'  Credit  Asso- 
ciation   

Chester — 

Board  of  Trade 

Erie- 
Board  of  Commerce 

McKeesport— 

Chamber  of  Commerce 

Meadville — 

Chamber  of  Commerce 

Philadelphia — 

(z)  Board  of  Trade 

(g!j)  Bourse 

Chamber  of  Commerce 

Commercial  Museum 

Lumbermen's  Exchange 

Morocco  Manufacturers'  National 

Association 

National  Association  of  Hosiery 

and  Underwear  Manufacturers.. 

National  Manufacturers  of  Soda 

Water  Flavois 

National   Wholesale   Dry    Goods 

Association ". 

Pittsburgh- 
American  Face  Brick  Association. . 
American  Warehousemen's  Asso- 
ciation   

Chamber  of  Commerce 

National  Paint,  Oil,  and  Varnish 

Association , 

National  Pipe  and  Supplies  Asso- 
ciation   

Oakland  Board  of  Trade 

-    Reading- 
Chamber  of  Commerce 

■   Sharon — 

Civic  Association 

WOkes-Barre — 

(aa)  Chamber  of  Commerce 

York- 
Chamber  of  Commerce 

Manufactui'ers'  Association 

Philippine  Islands: 
Manila — 

Merchants'  Association 

Porto  Rico: 
San  Juan — 

Camara  Insular  de  Comercio 

South  Carolina: 
Charleston — 

(bb)  Chamber  of  Commerce 

Yorkville — 

Hard  Yarn  Spinners'  Association. 
South  Dakota: 
Aberdeen- 
Commercial  Club 

Yankton— 

Commercial  Association 

Tennessee: 

Chattanooga- 
Chamber  of  Commerce 

Manufacturers'  Association 


Ballot  No.  1. 


II 


III 


IV 


Ballot  No.  11. 


Ill 


IV 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     481 


Ballot  No.  1. 

Ballot  No.  11. 

Name  of  organization. 

1 

II 

III 

IV 

I 

II 

III 

IV 

V 

i 

a 

< 

o 
(in 

a 

^ 

f^ 

a 
'3 

< 

o 

1 
< 

.B 

S 

f^ 

4J 

a 

i 

1 

1 

Tennessee— Continued. 
Memphis — 

8 
1 

2 

2 

1 

6 

1 

8 

1 

2 
2 

1 
2 

2 

1 

2 

6 
6 

1 

1 

1 
3 
5 
2 

2 
2 

8 
1 

2 

2 

2 

2 
1 

1 

2 

... 
2 

1 

6 

1 

6 
1 

5 
2 

2 

.8 
1 

2 

2 

2 

2 
1 

1 
2 

6 
6 

1 

1 
6 

3 
5 
2 

1 

2 

2 

8 

I 

2 

8 
1 

2 

2 

1 
1 

8 

1 

2 
2 

2 

2 
1 

1 
2 

6 
6 

1 

1 

1 

8 

1 

2 
2 

1 
2 

2 

1 

1 

2 

6 
6 

1 

1 

8 
1 

2 

2 

1 

2 

2 
1 

1 

2 

6 
6 

1 

Southern  Hardwood  Traffic  Asso- 
ciation   

Nashville- 
Tennessee  Manufacturers'  Associa- 

Texas: 

Texarkana— 

Board  of  Trade 

1 

2 

1 

2 

2 
1 

1 
2 

6 
6 

1 

1 

Utah: 

Salt  Lake  City— 

1 

Vermont: 

Brattleboro— 

Board  of  Trade 

2 

1 

1 

2 
2 

1 
2 

Virginia: 

Newport  News — 

Chamber  of  Commerce 

Norfolk— 

North  Carolina  Pine  Association . . . 

Richmond- 
Southern  Supply  and  Macliinery 
Dealers'  Association 

Roanoke— 

(cc)  Chamber  of  Commerce 

2 

Washington: 
Seattle- 

(dd)  New  Seattle  Chamber  of  Com- 
merce   

Spokane- 
Chamber  of  Commerce 

6 
1 

...'  6 
...    1 

...1  1 

Tocoma— 

West  Coast  Lumber  Manufacturers 
Association 

1 

West  \  irginia: 
Fairmont — 

Chamber  of  Commerce 

1 

1 
3 

Wisconsin: 
Madison- 
Board  of  Commerce 

6 

Manitowoc— 

Citizens'  Association 

1 

1 
3 
5 
2 

1 

2 

2 

5 
2 

1 

5 
2 

1 

2 

1 
3 
5 

2 

1 
2 

2 

1 
3 
5 
2 

1 

2 

2 

Milwaukee- 
Chamber  of  Commerce 

Merchants    and     Manufacturers' 
Association 

Wisconsin  Manufacturers'  Associa- 
tion   

2 

2 
2 

2 
2 

Port  Washington- 
Merchants    and     Manufacturers' 
Association 

1 

Wyoming: 
Sheridan- 
Commercial  Club 

France: 
Paris— 

(ee)  American  Chamber  of  Com- 
merce   

(a)  The  Fresno  Chamber  of  Coniiiierce  states  that  it  will  favor  the  first  two 
l«ropositions  of  ballot  number  one  if  no  other  methods  of  overcoming  existing 
conditions  can  be  found. 

(b)  The  Oakland  Clianil^er  of  Commerce  indicates  that  its  board  of  directors 
unanimously  voted  in  favor  of  the  first  proposition  on  ballot  number  one  on 
condition  that  Government  ownership  should  be  temporary  and  that  provision 
should  be  made  to  dispose  of  the  vessels  when  the  present  emergency  has 
passed. 


482      SHIPPIXG  BOARD,  XAVAL  AUXILIAKV,  AND  MERCHANT  MARINE. 

(c)  The  San  Francisco  Chamber  of  Commerce  would  like  to  divide  the  first 
recommendation  on  the  second  ballot,  voting  in  favor  of  the  creation  of  a 
shipping  board  to  investigate  and  report  to  Congress,  but  against  such  a  board 
having  full  jurisdiction  over  matters  pertaining  to  oversea  transportation.  It 
would  also  prefer  to  divide  the  fourth  question  of  the  second  ballot,  and  vote 
in  favor  of  abolition  of  deferred  rebates,  but  against  supervision  of  rates  by 
the  shipping  board. 

((I)  The  Savannah  Board  of  Trade,  in  voting  on  the  fourth  and  fifth  recom- 
mendations of  the  second  ballot,  expresses  a  belief  that  it  is  not  feasible  to 
regulate  ocean  freight  rates,  especially  in  connection  with  steamers  of  foreign 
countries. 

(e)  The  Chicago  Industrial  Club  qualifies  its  vote  upon  the  third  recom- 
mendation of  the  second  ballot  by  saying  that  it  believes  steamers  in  passenger 
and  mail  service  between  the  United  States  and  Brazil,  Uruguay,  and  Ar- 
gentina should  malie  more  than  sixteen  knots  and  should  receive  unusual 
compensation  for  the  increased  cost  attendant  upon  high  speed. 

(/)  The  National  Association  of  Tanners  found  that  its  members  were 
divided  regarding  the  second  recommendation  of  the  second  ballot,  with  refer- 
ence to  a  marine  development  company,  and  suggests  that  on  this  proposal  the 
Federal  Shipping  Board,  if  created,  be  asked  to  make  recommendations  to 
Congress. 

(g)  The  Freeport  Chamber  of  Commerce  qualifies  its  vote  on  the  first  rec- 
ommendation of  the  second  ballot  by  saying  that  it  would  prefer  to  see  the 
duties  which  can  be  assigned  to  a  shipping  board  performed  by  some  existing 
agency  of  the  Government. 

(/()  The  Illinois  Commercial  Federation  indicates  that  it  might  be  in  favor 
of  the  first  proposition  on  the  first  ballot  in  case  private  capital  fails  to  provide 
shipping, 

(i)  The  New  Orleans  Association  of  Commerce  qualifies  its. vote  on  the  third 
proposition  of  the  first  ballot  with  a  statement  that  it  favors  subsidies  only  if 
the  navigation  laws  of  the  United  States  can  not  be  changed,  or  some  other 
way  be  found  to  accomplish  the  same  purpose. 

{))  The  New  Orleans  Board  of  Trade  qualifies  its  vote  on  the  third  proposi- 
tion of  the  first  ballot  in  the  same  way  as  the  New  Orleans  Association  of 
Commerce. 

(k)  Tlie  Baltimore  ^lerchants  and  Manufacturers"  Association,  witli  reference 
to  the  fourth  proposition  in  the  first  ballot,  says  that  it  favors  subsidies  if  the 
amount  paid  is  proportioned  to  the  service  rendered,  since  it  thinks  a  mail 
service  whicli  is  not  fast  is  useless.  With  reference  to  the  fourth  question  of 
the  second  ballot,  it  favors  abolition  of  deferred  rebates,  but  says  that  because 
of  other  provisions  incorporated  it  cannot  act  upon  the  recommendation  as  a 
whole. 

(I)  The  Boston  Chamber  of  Commerce  votes  in  favor  of  the  third  proposition 
on  the  first  ballot  on  condition  that  any  ^system  of  subsidies  adopted  is  made 
subject  to  such  reasonable  regulation,  supervision,  and  limitation  on  the  part 
of  the  Government  as  will  prevent  its  abuse.  In  voting  on  the  first  recommen- 
dation of  the  second  ballot,  the  Boston  chamber  records  its  belief  that  the 
jurisdiction  of  the  shipping  board  should  be  cai-efuUy  defined  and  that  the  navi- 
gation laws  and  regulati(jns,  so  far  as  they  unnecessarily  increase  the  cost  of 
operating  American  vessels  as  against  foreign  vessels,  shoxild  be  promptly 
revised  and  modernized. 

()n)  The  Minneapolis  Chamber  of  Commerce,  in  voting  in  favor  of  the  third 
and  fourth  propositions  of  the  first  ballot,  says  that  these  votes  are  conditioned 
upon  an  investigation  such  as  is  proposed  in  the  first  recommendation  of  the 
second  ballot,  disclosing  that  it  is  impracticable  so  to  modify  the  navigation  laws 
as  to  place  American  ships  on  a  competing  basis  with  foreign  vessels. 

(o)  The  New  Jersey  State  Chamber  of  Commerce  voted  against  Government 
ownership  and  operation  even  though  the  political  parties  oppose  subsidies. 

.{p)  The  Auburn  Chamber  of  Commerce,  in  voting  against  the  third  recom- 
mendation on  the  second  ballot,  states  that  it  does  not  oppose  any  necessary 
increase  in  the  amount  of  the  subvention  to  vessels  of  the  second,  third,  and 
fourth  classes. 

(q)  The  American  Exporters  and  Importers'  Association,  in  voting  upon  the 
first  recommendation  on  the  second  ballot,  indicates  that  it  believes  the  shipping 
board  should  have  jurisdiction  only  to  investigate  and  report  to  Congress  re- 
garding the  navigation  laws,  and  that  it  has  not  come  to  a  conclusion  whether 
or  not  the  board  should  have  full  jurisdiction  in  all  matters  pertaining  to  over- 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     483 

sea  transportation.  With  respect  to  the  fourth  recommendation  on  the  second 
haHot  the  association  believes  there  should  be  abolition  of  deferred  rebates,  but 
is  divided  regarding  supervision  of  ocean  freight  rates. 

(r)  The  Merchants'  Association  of  New  York  qualifies  its  votes  upon  six 
different  questions.  Its  vote  upon  the  third  and  fourth  propositions  on  the  first 
ballot  it  conditions  upon  provision  being  made  for  a  Federal  board  of  super- 
vision, as  proposed  in  the  first  recommendation  on  the  second  ballot.  The  asso- 
ciation votes  in  favor  of  the  second  recommendation  on  the  second  ballot  upon 
the  condition  that  the  creation  of  a  marine  development  company  does  not  delay 
or  obscure  action  in  tlie  form  of  a  subsidy  aid  as  advocated  by  its  votes  upon 
the  first  ballot,  in  favor  of  the  third  recommendation  on  the  second  ballot  with 
a  reservation  to  the  elfect  that  the  speed  of  mail  steamers  on  routes  to  P^urope 
should  not  be  reduced,  and  in  opposition  to  the  foiu'th  and  fifth  recommenda- 
tions on  the  second  ballot  for  the  reason  that  they  involve  matters  of  detail 
which  should  be  lefi  to  tiie  direction  of  tlie  shipping  board. 

(s)  The  National  Association  of  (Jliie  and  (Jciatin  ^Manufacturers  is  in  favor 
of  a  shipiting  board  to  investigate  and  report  to  Congress  regarding  the  naviga- 
tion laws,  as  proposed  in  the  first  part  of  the  first  recommendation  on  the  second 
ballot,  but  is  not  in  favor  of  having  this  board  exercise  full  jurisdiction  in  all 
matters  pertaining  to  over-sea  transportation. 

it)  The  National  Association  of  Manufacturers  explains,  in  connection  with 
its  votes  on  the  fourth  and  fifth  reconnnendations  on  the  second  ballot,  that  it 
believes  no  special  board  is  needed  to  carry  out  properly  the  provisions  involved, 
as  they  are  questions  coming  under  the  jurisdiction  of  the  Department  of  Com- 
merce or  other  governmental  departments. 

ill)  The  New  York  Produce  Kxdiange  is  in  favor  of  ri'duction  of  speed,  as 
outlined  in  the  third  reconmiendation  on  the  .second  ballot,  but  makes  no  recom- 
mendation as  to  conqjensation.  \Vith  respect  to  the  fourth  reconnnendation  on 
the  same  ballot,  it  is  in  favor  of  having  all  agreements  among  over-sea  lines  filed 
with  a  shipping  board,  if  created,  advocates  authority  for  such  a  board  to 
investigate  complaints  of  shippers,  and  is  in  favor  of  legi.slation  abolishing 
deferred  rebates. 

(r)  The  Rubber  Club  of  America  is  in  favor  of  the  third  question  on  the  first 
ballot  only  if  a  system  of  subventions  for  mail  and  freight  lines  fails. 

(ir)  The  Swedish  Chamber  of  Connuerce  states,  with  regard  to  the  third 
recommendation  on  the  second  ballot,  that  it  favors  reduction  of  speed  as  out- 
lined but  makes  no  reconnnendation  as  to  compensation.  In  regard  to  the  fourth 
reconnnendation  on  the  same  ballot,  the  Swedish  chamber  favors  the  filing  of  all 
agreements  among  over-sea  lines  with  a  shipi)ing  board,  if  created,  advocates 
authority  for  such  a  board  to  investigate  complaints  of  shippers,  and  favoi's 
legislation  abolishing  deferred  rebates, 

(x)  The  Portland  Chamber  of  Conunerce  casts  its  vote  upon  the  third  question 
on  the  first  ballot  with  a  qualification  that  the  rate  on  the  movement  of  a  foreign 
product  to  an  American  port  through  the  operation  of  this  subsidy  should  not 
be  niiide  less  than  the  rate  on  a  competitive  American  product  from  one  Ameri- 
can port  to  the  one  reached  by  such  foreign  rate.  By  way  of  illustration,  the 
Portland  chamber  says  that  no  subsidy  should  be  paid  on  a  line  operating  be- 
tween British  Columbia  and  Atlantic  seaboard  ports  which  would  have  the 
effect  of  further  increasing  the  advantage  of  British  Columbia  millmen  in  taking 
the  American  market  for  liunber.  In  voting  upon  the  first  recommendation  on 
the  second  ballot  the  Portland  chamber  says  the  shipping  board  should  be  com- 
posed of  a  shipowner,  a  licensed  shipmaster,  a  licensed  marine  engineer,  an 
imlicensed  practical  seaman,  a  marine  underwriter,  an  exporting  merchant,  a 
merchant  who  ships  coastwise  or  on  interior  waters,  a  former  American  consular 
official,  a  shipbuilder,  an  attorney  with  admiralty  practice,  an  official  of  the 
Bureau  of  Navigation,  and  a  ]\Iember  of  Congress, 

(.(/)  The  Altoona  Chamber  of  Commerce  votes  in  favor  of  the  first  question 
on  the  second  ballot,  with  the  distinct  understanding  that  the  shipping  board 
is  to  be  composed  of  persons  of  recognized  ability  and  experience  in  marine 
transportation, 

(z)  The  Philadelphia  Board  of  Trade  indicates  that  it  would  vote  in  favor 
of  the  creation  of  a  shipping  board  with  duties  only  to  investigate  and  report 
to  Congress  regarding  the  navigation  laws. 

(aa)  The  Wilkes-Barre  Chamber  of  Commerce  expresses  approval  of  owner- 
ship of  merchant  vessels  by  the  Government,  but  with  operation  by  private 
parties  under  leases,  if  the  second  reconnnendation  on  the  second  ballot  should 
not  be  adopted. 


484      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MEKCHANT  MARINE. 

(bb)  Tlie  Charleston  Chamber  of  Commerce  exphiins  that  in  voting  on  the 
second  question  of  the  first  ballot  it  advocates  Government  ownership,  with 
private  operation,  only  to  the  extent  of  the  need  of  the  Navy  for  auxiliaries. 

(cc)  The  Chamber  of  Commerce  of  Roanoke  votes  in  favor  of  the  third 
question  on  the  first  ballot  if  the  purchase  and  operation  of  vessels  by  Ameri- 
cans should  be  placed  on  the  same  basis  as  are  purchase  and  operation  in  for- 
eign countries. 

{del)  The  Seattle  Chamber  of  Connnerce  votes  in  favor  of  the  third  ques- 
tion on  the  first  ballot,  with  the  proviso  that  it  votes  in  this  way  only  if  no 
better  means  can  be  put  into  effect  for  building  up  the  merchant  marine.  The 
Seattle  cliamber  believes  that  American  shipping  would  be  rehabilitated  with- 
out other  material  assistance  if  the  navigation  laws  were  revised  so  as  to  per- 
mit American  ve.ssels  to  operate  under  the  same  general  regulations  as  A'essels 
of  other  countries.  Although  voting  in  favor  of  the  first  recommendation  on 
the  second  ballot,  the  Seattle  chamber  indicates  reluctance  to  have  an  addi- 
tional conmiission  created,  and  casts  its  vote  with  the  understanding  that  the 
shipping  board  is  to  be  composed  of  men  of  recognized  ability.  In  voting  upon 
the  second  recommendation  on  the  second  liallot  this  organization  wishes  its 
preference  stated  for  direct  Government  aid  rather  than  indirect  aid  through  a 
development  company. 

(ec)  The  American  Chamber  of  Commerce  in  Paris,  in  connection  with  its 
vote  on  the  second  question  on  the  first  ballot,  states  that  in  view  of  the  urgent 
need  of  merchant  ships  it  would  favor  Government  ownership,  with  private 
operation,  in  case  private  enterprise  can  not  be  sufficiently  interested  to  acquire 
vessels  promptly.  With  regard  to  the  second  recomendation  on  the  second 
ballot  the  Paris  chamber  urges  that  members  of  the  shipping  board  should  all 
be  men  of  large  business  experience  and  that  several  of  the  members  should  have 
expert  knowledge  of  the  shipping  trade.  The  capital  of  the  Marine  Develop- 
ment Co.,  in  the  opinion  of  this  organization,  should  be  larger  than  $30,000,000, 
that  the  purposes  in  view  might  be  better  accomplished.  The  speed  of  mail 
steamers  in  service  on  routes  to  Europe  the  Paris  chamber  believes  should 
not  be  reduced  from  20  knots ;  it  thinks  that  under  the  ocean-mail  law  of  1891 
there  should  be  three  classes  instead  of  four — a  class  with  speed  of  20  knots 
or  more,  to  meet  the  requirements  on  routes  to  Europe ;  a  second  class  with 
minimum  speed  of  16  knots ;  and  a  third  class  with  a  minimum  of  12  knots. 
With  particular  emphasis  the  Paris  chamber  expresses  its  belief  that  competi- 
tion with  ships  of  other  countries  can  not  be  successful  until  the  American 
navigation  laws  are  revised  and  until  American  ships  conform  to  the  inter- 
national standards  of  tonnage  and  measurement. 

itf)  The  Wholesale  Shoe  League  votes  in  favor  of  the  first  part  of  the  first 
recommendation  on  the  second  ballot,  believing  there  is  a  question  whether  or 
not  the  shipping  board  could  have  control  of  over-sea  transportation. 

(gg)  The  Philadelphia  Bourse,  in  voting  upon  the  second  question  on  the  first 
ballot,  says  it  sees  no  objection  to  the  lease  of  Government-owned  ships  for 
use  in  merchant  service,  provided  such  ships  are  especially  built  and  adapted 
for  use  as  Government  auxiliaries,  to  wit,  colliers,  transports,  and  vessels  of 
such  type.  It  is  the  opinion  of  the  bourse  that  the  Government  should  own  a 
large  nmnber  of  such  vessels  and  that  ships  are  better  cared  for  and  in  better 
shape  for  innnediate  use  if  kept  in  operation  and  good  condition  than  if  laid 
up  in  ordinary.  Regarding  the  third  question  on  the  first  ballot  this  organiza- 
tion says  subsidies  should  cover  not  only  difference  in  cost  of  operation 
but  dilference  in  prime  cost  of  construction  and  consequent  increased  cost  of 
annual  depreciation  and  insurance.  In  opposing  the  creation  of  a  shipping  board 
the  bourse  says  that  the  handicaps  against  vessels  operated  under  the  American 
fiag  are  well  known  and  have  been  reported  by  several  commissions.  Conse- 
quently, it  believes  a  shipping  board  is  unnecessary  for  purposes  of  investiga- 
tion, and  that  such  a  board  could  not,  without  extreme  danger,  have  full  juris- 
diction in  all  matters  pertaining  to  over-sea  transportation. 

ORGANIZATIONS  NOT  FILING  BALLOTS  BUT  RECORDING  OPINIONS. 

The  Baltimore  Chamber  of  Commerce  acted  upon  the  referendum  by  express- 
ing its  disapproval  of  the  ship-purchase  bill  which  was  before  the  last  Congress 
and  by  urging  that  the  Government  at  once  remove  all  restrictions  at  present 
imposed  upon  persons  who  would  invest  capital  in  shipping,  giving  to  Americans 
the  same  freedom  as  citizens  of  other  countries  receive  from  their  Governments. 


SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     485 

The  Charleston  Cotton  Exchange,  by  its  board  of  directors,  adopted  a  resolu- 
tion to  the  effect  that  conditions  make  this  an  inopportune  time  at  which  to 
express  an  opinion  regarding  the  questions  submitted  in  the  referendum. 

The  Washington  Chamber  of  Commerce  adopted  resolutions  in  which  it 
decliped  to  vote  on  this  referendum  for  the  reason  that  it  believes  the  method 
by  which  the  Government  should  assist  in  promoting  an  efficient  commercial 
marine  is  relatively  of  little  consequence  in  view  of  the  urgent  necessity  for 
sufficient  vessels  to  carry  American  commerce.  It  urges  everyone  to  subordi- 
nate individual  views  regarding  methods  in  order  that  all  may  unite  upon  a 
common  plan. 

BALLOTS   RECEIVED    TOO    LATE. 

The  ballots  of  10  organizations  were  received  too  late  to  be  counted.  The 
organizations  represented  by  these  ballots  are  as  follows : 

The  Association  of  American  Cement  Manufacturers,  entitled  to  one  vote, 
indicates  that  it  is  opposed  to  the  first  and  second  propositions  on  the  first 
ballot  and  in  favor  of  all  the  other  questions  on  both  ballots. 

The  Port  Wayne  Commercial  Club,  Indiana,  entitled  to  four  votes,  indicated 
that  it  would  vote  in  favor  of  the  first  proposition  of  the  first  ballot  and  all  the 
questions  on  the  second  ballot,  not  expressing  an  opinion  on  the  other  questions. 

The  Great  Falls  Commercial  Club,  Montana,  entitled  to  one  vote,  indicated 
that  it  opposes  the  first  two  propositions  on  the  first  ballot  and  would  vote  in 
favor  of  all  the  other  questions  on  both  ballots. 

The  Jacksonville  Chamber  of  Commerce,  Florida,  which  is  entitled  to  five 
votes,  forwarded  its  vote  upon  the  second  ballot  too  late  for  official  record. 
It  indicated  that  with  reference  to  the  second  ballot  it  would  express  an  opinion 
only  upon  the  first  recommendation,  voting  in  favor  of  it. 

The  Longmont  Commercial  Association,  Colorado,  entitled  to  one  vote,  indi- 
cated it  would  vote  against  tlie  first  and  second  propositins  on  the  first  ballot 
and  the  second  question  on  the  second  ballot,  and  in  favor  of  the  other  ques- 
tions on  both  ballots. 

The  National  Association  of  Box  Manufacturers,  entitled  to  one  vote,  indi- 
cated it  would  vote  against  the  first  two  propositions  of  the  first  ballot  and 
in  favor  of  all  the  other  questions  on  both  ballots. 

The  New  Albany  Chamber  of  Commerce.  Indiana,  entitled  to  one  vote,  indi- 
cated that  it  opposes  the  first  two  propositions  on  the  first  ballot  and  would 
vote  in  favor  of  all  the  other  questions  on  both  ballots. 

The  United  States  Potters'  Association,  entitled  to  one  vote,  indicated  it 
would  vote  against  the  first  three  propositions  on  the  first  ballot  and  in  favor 
of  all  the  other  propositions  on  both  ballots. 

The  Utica  Chamber  of  Commerce,  New  York,  entitled  to  four  votes,  indicated 
it  would  vote  in  favor  of  all  five  recommendations  on  the  second  ballot. 

The  Yakima  Commercial  Club,  Washington,  entitled  to  three  votes,  indicated 
that  it  opposes  the  third  proposition  on  the  first  ballot  and  the  second  recom- 
mendation on  the  second  ballot,  being  in  favor  of  all  of  the  other  questions  on 
both  ballots. 

Elliot  H.  Goodwin,  General  Secretary. 

STATEMENT  OF  MR.  IRVING  T.  BUSH,  OF  NEW  YORK,  PRESIDENT 
OF  THE  BUSH  TERMINAL  CO. 

Mr.  Bush.  I  would  merely  like  to  say,  in  introducing  Mr.  Strauss, 
that  in  presenting  the  views  of  the  New  York  Chamber  of  Com- 
merce we  have  divided  oin-  presentation  into  four  parts.  Mr.  Frank- 
lin is  to  speak  from  the  general  steamship  standpoint,  and  we  have 
several  shippers  here  to  speak  from  the  shipping  standpoint.  Then 
we  have  one  gentleman  who  is  to  speak  from  the  standpoint  of  our 
coastwise  laws.  Mr.  Strauss  is  to  speak  from  the  standpoint  of  the 
bankers  of  New  York,  who  would  be  interested  in  distributing  the 
securities  and  selling  the  securities  of  the  steamship  companies. 

It  has  been  stated  here,  and  it  has  been  in  the  minds  of  many,  that 
one  of  the  most  difficult  problems  in  reestablishing  the  American 


486     SHIPPING  BOARD,  XAVAL  AUXILIAEY,  AND  MERCHANT  MARINE. 

merchant  marine  is  tlie  financial  problem,  the  attitude  of  the  invest- 
ing public,  and  the  attitude  of  the  bankers  who  distribute  these 
securities  to  the  investing  public.  And  that  is  very  important. 
Mr.  Strauss  is,  unfortunately,  leaving  for  Cuba  a  few  minutes  after 
2  o'clock.  He  has  booked  his  reservations  through,  and  I  ask  that  he 
might  have  an  opportunit}'  to  make  a  brief  statement  before  he  goes. 

STATEMENT  OF  MR.  ALBERT  STRAUSS,  OF  NEW  YORK,  MEMBER 
OF  THE  FIRM  OF  JOHN  W.  SELIGMAN  &  CO.,  BANKERS,  NO.  1 
WILLIAM  STREET,  NEW  YORK  CITY,  N.  Y. 

Mr.  Strauss.  I  will  be  very  brief,  Mr.  Chairman.  There  is  only 
one  point  I  want  to  refer  to.  Mr.  Gibboney  referred  to  the  profits 
that  the  New  York  bankers  insisted  on  making.  He  did  not  dwell 
very  much  on  the  profits  the  shipping  people  were  making  at  the 
present  time.     I  only  make  that  observation  in  passing. 

So  far  as  the  bankers  who  distribute  the  securities  are  concerned, 
they  are  willing  to  distribute  at  a  moderate  profit  any  security  their 
judgment  approves  as  sound.  They  have  to  do  that  with  deference 
to  the  safety  of  the  public  to  whom  they  appeal  and  to  protect  their 
own  reputations,  and  under  those  circumstances  they  make  mistakes. 
But  they  are  willing  to  distribute  any  securities  that  appeal  to  them 
as  sound,  providing  they  can  find  the  people  to  buy  them.  A  security, 
no  matter  how  sound,  if  they  can  not  find  the  people  to  buy  it,  does 
not  interest  them,  because  they  can  not  afford  to  tie  up  any  capital 
in  dead  securities.  Their  activities  would  be  very  limited  if  their 
operations  were  limited  to  securities  of  that  character. 

AVe  have  had  almost  no  experience  in  this  country  in  shipping 
securities,  except  perhaps  on  the  Great  Lakes.  Certainly  in  New 
York  we  have  not  had  any  experience.  England,  I  believe,  has  had 
considerable  experience  with  shipping  securities.  So  that  shipping 
securities  here,  even  if  the  bankers  become  convinced  of  their  safety, 
must  still  be  a  subject  of  gamble  and  education  of  the  investor.  The 
only  point  I  want  to  emphasize  is  that  I  believe  competition  with 
Government  operation  is  going  to  be  fatal  to  any  distribution  of 
securities.  I  do  not  believe  the  investor  will  buy  a  securit}^  which 
will  be  in  competition  with  Government  operation  of  vessels,  having 
behind  them  the  taxing  power. 

And  there  is  one  other  point  in  your  bill,  at  least  one  other — the 
question  of  the  provision  requiring  the  approval  of  the  shipping 
board  to  permit  the  transfer  of  a  vessel  now  under  the  American  flag 
to  a  foreign  flag.  That  might  conceivably  so  limit  the  market  that 
the  person  who  loaned  money  on  the  ship  could  not  sell  it.  If  Amer- 
ican operation  should  become  unprofitable  in  the  future,  and  if  the 
mortgagee  of  a  vessel  is  to  be  limited  to  the  American  operation  to 
look  to  those  people  for  his  market  in  case  he  has  to  sell  out  his 
security,  it  would  very  seriously  impair  the  value  of  the  security  that 
underlies  his  loan.  And  I  believe  that  provision  would  be  absolutely 
fatal  to  the  development  of  any  market  for  shipping  securities  here. 
On  the  other  hand,  if  a  condition  of  affairs  would  be  brought  about 
where  the  investor  would  be  convinced  that  shipping  under  the 
Amerigan  flag  can  be  made  permanently  profitably,  I  believe  those 
same  motives  that  Mr.  Gibbone}^  refereed  to;  that  is.  the  desire  to 
make  a  profit  on  the  investment  will  make  it  possible  to  find  all  the 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      487 

money  that  is  needed.  The  essence  there  is  that  the  public  and  the 
bankers  must  be  convinced  that  ship  operating  can  be  made  perma- 
nently profitable.  And  I  believe  that  ship  operating  can  be  made 
permanently  profitable  and  that  the  difference  in  the  cost  of  con- 
struction will  be  only  a  temporary  matter.  I  believe  the  reason  that 
our  construction  cost  here  has  been  higher  than  abroad  has  been  that 
we  have  not  had  the  volume  and  the  yards  have  not  been  able  to  spe- 
cialize; and  if  legislation  can  be  devised  and  put  through  which  will 
make  the  operation  profitable,  affording  for  a  time  assistance  in  con- 
struction. I  believe  the  necessity  for  permanent  assistance  in  con- 
'        struction  will  vanish. 

That  is  the  only  point  I  wanted  to  make,  Mr.  Chairman. 

The  Chairman.  Is  there  any  demand  now  on  the  part  of  the  in- 
vesting public  for  securities  of  this  kind? 

Mr.  Strauss.  We  do  not  hear  it  or  see  it.  If  we  undertook  to  sell 
that  kind  of  security  we  would  be  met  in  the  first  place  with  the 
absolute  ignorance  of  most  people  in  regard  to  it.  We  would  meet 
their  apprehension  as  to  the  outcome.  And  if  there  were  any  active 
discussion,  as  there  is  now,  on  the  question  of  Government  ownership 
and  Government  operation,  I  think  it  would  be  a  hopeless  task  to  try 
to  convince  people  they  would  be  safe  in  putting  their  money  into 
securities  where  the  Government  itself  as  an  operator,  with  the  tax- 
ing power  behind  it,  was  to  be  a  competitor. 

The  Chairman.  If  it  is  to  be  distinctly  understood  that  under  this 
bill  it  was  not  the  purpose  of  the  Government  to  operate  ships  in  com- 
petition with  privately  owned  ships  in  any  trade  where  our  foreign 
commerce  is  served,  would  that  still  operate  to  intimidate  the  in- 
vestors ? 

Mr.  Strauss.  I  think  so.  I  think  the  menace  of  that  competition 
would  always  be  present. 

The  Chairman.  Is  it  your  view,  then,  that  we  should  do  nothing, 
but  should  wait  for  the  salvation  of  the  Lord  for  what  may  happen 
in  the  future? 

]\Ir.  Strauss.  No;  I  think  not.  I  think  the  bill  that  the  chamber 
of  commerce  has  had  prepared  and  that  they  are  presenting  here 
would  meet  the  situation.  I  do  not  think  that  anything  we  can  do 
now.  immediately,  will  relieve  the  present  situation.  But  there  are 
other  men  here  more  competent  to  speak  on  that  feature  than  I  am. 
All  of  the  shipyards  are  apparently  busy,  and  the  commercial  motive, 
the  motive  to  uiake  a  profit,  is  present  for  any  man  who  can  get 
anything  at  all  that  will  float  and  may  be  moved  on  the  water; 
but  in  the  long  run  I  think  we  will  have  to  do  something  to  make  the 
operation  under  the  American  flag  possible.  So  long  as  we  have  a 
protective  tariff  with  protection  of  wages — and"  the  wages  paid  at 
sea  will  have  to  compare  with  the  wages  paid  on  shore — I  believe 
that  we  have  got  to  do  something  in  the  way  of  annual  payments 
to  equalize  the  cost  of  profitable  operation. 

The  Chairman.  Have  you  made  any  estimate  of  the  cost  of  operat- 
ing, say.  75  vessels,  each  of  10,000  tons  burden,  such  as  might  be 
done  under  this  bill,  under  the  subsidy  scheme  proposed  by  the  New 
York  Chamber  of  Commerce? 

Mr.  Strauss.  I  have  not;  and,  if  I  had,  my  figures  would  not  be 
of  any  value.  A  man  like  Mr.  Franklin  could  say  something  on 
that  that  would  be  of  value ;  I  could  not. 


488      SHIPPING  BOAED^  NAVAL  AUXILIAKY,  AND  MERCHANT  MARINE. 

Mr.  Bruckner.  Mr.  Strauss,  do  yon  voice  the  sentiments  of  the 
bankers  of  New  York? 

Mr.  Strauss.  I  voice  my  own  sentiments.  I  am  not  here  speaking 
for  any  bankers'  association. 

Mr.  Bruckner.  You  are  speaking  as  a  practical  banker? 

Mr.  Strauss.  A  practical  banker.  That  is  my  own  judgment,  but 
I  think  you  would  find  it  to  be  the  judgment  of  almost  all  bankers. 

Mr.  Bruckner.  You  think  the  public  would  fight  shy  of  buying 
those  bonds? 

Mr.  Strauss.  No;  not  Government  bonds,  if  that  is  what  you 
mean? 

Mr.  Bruckner.  The  public  would  fight  shy? 

Mr.  Strauss.  Do  you  mean  buying  Government  bonds  based  on 
shipping  ? 

Mr.  Bruckner.  Yes. 

Mr.  Strauss.  Any  obligation  of  the  Government  is  good  and  can 
be  sold  at  any  time.  My  point  is  that  the  limited  amount  of  money 
placed  in  the  Government  operation  of  shipping  would  discourage 
a  very  much  larger  amount  that  might,  under  suitable  conditions, 
be  looked  for  from  private  enterprise. 

Mr.  Bruckner.  You  think  so? 

Mr.  Strauss.  I  think  so. 

The  Chairman.  But  ^^et  there  is  no  present  demand  for  securities 
of  that  kind? 

Mr.  Strauss.  No  present  demand  for  a  security  of  that  class. 
People  are  suspicious  of  it;  they  do  not  understand  it  themselves 
and  there  are  other  fields  that  they  can  go  into.  It  is  not  in  our 
control;  and  even  if  we  wanted  to  control  it,  we  can  not;  we  have 
to  meet  the  conditions. 

The  Chairman.  This  system  of  Government  ownership  and  con- 
trol is  a  new  one.  It  grew  out  of  a  number  of  conditions  in  the 
foreign  trade  following  the  war  in  Europe. 

Mr.  Strauss.  Undoubtedly. 

The  Chairman.  It  is  more  than  50  years  since  the  Civil  War. 
We  have  been  waiting  long,  and  some  of  us  impatiently,  for  private 
enterprise  to  enter  into  this  business,  but  up  to  this  date  without 
any  substantial  evidence  of  interest  on  their  part.  Various  subsidy 
schemes  have  been  proposed  in  Congress  in  years  past.  None  of 
them  have  ever  been  enacted  into  law,  and  I  do  not  think  I  hazard 
anything  when  I  say  that  the  bill  proposed  by  the  New  York  Cham- 
ber of  Commerce  has  not  a  ghost  of  a  show  of  being  enacted  into 
law.  Now,  under  those  circumstances  do  you  think  there  is  enough 
interest  in  this  bill  to  try  it? 

Mr.  Strauss.  I  do  not  see  that  this  bill  would  do  anything  to 
relieve  the  present  situation.     It  would  not  create  vessels. 

The  Chairman.  It  would  make  a  start,  would  it  not? 

Mr.  Strauss.  We  do  not  see  even  how  this  bill  could  do  that. 

The  Chairman.  Admiral  Benson,  of  the  Navy  Department,  said 
that  the  Navy  Department  would  need  at  least  500,000  tons  of 
merchant  shipping  for  naval  auxiliaries.  That  much  tonnage  could 
be  provided  for  under  this  bill,  and  if  we  do  not  go  any  further  than 
to  supply  that  need  of  the  Navy,  of  its  present  strength,  do  you  not 
think  it  would  be  a  wise  thing  to  do  ? 


SKIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     489 

Mr.  Strauss.  You  could  not  supply  it  so  as  to  relieve  the  present 
situation. 

The  Chairman.  Oh,  you  could  not  do  it  to-morrow;  but  then  you 
could  in  a  year  or  two,  or  possibly  three  years,  if  we  make  a  start. 

Mr.  Strauss.  Three  years,  I  think,  would  be  the  minimum  time. 

The  Chairman.  While  it  is  just  exjDressing  an  opinion,  I  think 
if  we  had  enacted  the  ship-purchase  bill  into  law  in  1914  that  we 
could  have  purchased,  for  the  $50,000,000,  ships  that  to-day  would 
have  been  worth  at  least  $100,000,000,  and  we  would  not  have  been 
in  this  situation.  But  it  was  defeated  just  because  the  people  do  not 
believe  in  Government  ownership.  In  other  words,  they  really 
stood  still  in  the  face  of  what  appeared  to  be  a  great  emergency. 

Mr.  Strauss.  These  ships  are  all  in  operation  now,  that  you  re- 
ferred to. 

The  Chairman.  No;  a  great  many  of  them  are  at  the  bottom  of 
the  sea.  About  a  million  and  a  quarter  tons  are  now  at  the  bottom 
of  the  sea,  and  maybe  a  million  more  have  been  commandeered  by 
their  governments.  Now,  I  do  not  suppose  that  any  of  us,  as  a 
general  proposition,  want  the  Government  to  go  into  a  business 
where  private  enterprise  will  take  it  up  and  conduct  it.  I  do  not. 
But  I  confess  I  have  been  impatient  because  private  enterprise  has 
been  so  slow  to  take  this  matter  up  when  there  was  no  suggestion  of 
the  Government  entering  the  field.  I  would  like  to  see  an  American 
merchant  marine.  I  think  it  is  as  essential  to  the  national  defense 
as  a  navy. 

Mr.  Strauss.  I  agree  with  you. 

The  Chairman.  There  has  been  great  commercial  prosperity,  and 
especially  now,  but  we  must  seek  out  new  avenues  of  trade  and  ex- 
tend our  foreign  commerce  if  we  are  going  to  keep  our  great  manu- 
facturing and  industrial  concerns  active  and  profitable. 

Mr.  Strauss.  I  agree  with  you,  Mr.  Chairman,  but  I  do  not  think 
this  bill  will  do  it,  because  I  think  it  will  discourage  more  private 
enterprise  than  the  limited  amount  of  direct  Government  assistance 
will  give. 

Mr.  Burke.  How  can  private  enterprise  be  any  more  discouraged 
than  it  has  been  ? 

Mr.  Strauss.  I  agree  with  you  on  that. 

Mr.  Burke.  This  is  an  experiment.  Is  it  not  at  least  worth  trying 
when  all  other  means  have  failed  ? 

Mr.  Strauss.  I  believe  the  limited  assistance  of  the  equalization 
payments  that  are  provided  in  the  bill  that  the  chamber  of  com- 
merce has  brought  down  here  would  give  better  results.  I  do  not 
think  there  is  any  question  here  at  all  that  we  are  all  aiming  at  the 
same  thing;  but  there  is  a  difference  of  opinion  as  to  what  is  going 
to  be  effective. 

Mr.  Saunders.  Mr.  Burke  suggests  that  this  is  an  experiment  and 
that  other  means  have  failed.  What  other  experiment  has  been  tried 
heretofore?  Has  any  other  method  been  presented  to  private 
capital  ? 

Mr.  Strauss.  I  do  not  think  so. 

Mr.  Saunders.  So  then  there  has  been  no  failure  on  their  part  to 
take  advantage  of  an  opportunity  when  no  opportunity  has  been 
presented  ? 


490     SHIPPING  BOARD,  XAVAT.  AUXILIAEY,  AND  MEECHANT  MARINE. 

Mr.  Strauss.  Of  private  capital;  no,  I  think  not. 

Mr.  Saunders.  I  think  it  was  agreed  that  until  our  legislation  of  a 
year  or  two  ago  it  was  utterly  impossible  for  American  capital  to  go 
into  the  deep-sea  trade  under  our  ancient  legislation. 

Mr.  Strauss.  I  quite  agree  with  you.  I  think  that  the  remark  of 
Mr.  Gibboney  as  to  the  willingness  of  bankers  to  make  a  profit  is  a 
sufficient  answer  to  that.  I  do  not  think  he  saw  the  application  of 
the  remark  on  the  other  side. 

Mr.  Saunders.  With  respect  to  the  movement  of  goods  from  this 
country,  if  rates  were  reasonable — having  reference  to  the  present 
condition  of  affairs — if  rates  were  lower  than  they  are  now,  no  more 
goods  would  move  now,  w^ould  they?  In  other  words,  the  carrying 
capacities  of  the  ships  were  already  full  before  the  present  ex- 
travagant rates? 

Mr.  Strauss.  So  I  understand,  but  I  think  the  steamship  men 
would  understand  more  about  that  than  I  do.  I  think  there  is  no 
question  about  that,  but  what  it  is  true.  I  think  I  saw  an  evidence 
of  that  in  New  York  the  other  day,  a  side-wheel  steamer  with  walk- 
ing beams  on  the  East  River. 

Mr.  Saunders.  It  is  a  fact,  so  far  as  you  know,  that  even  with  the 
present  robber  rates  we  have  everything  moving  now  that  we  can 
possibly  move;  and  if  the  rates  were  reduced  no  more  traffic  could 
be  carried,  because  there  are  no  carriers  to  take  it? 

Mr.  Strauss.  I  think  so. 

Mr.  Saunders.  These  rates  we  have  heard  of  are  not  being  paid 
by  our  people,  are  they;  they  are  paid  at  the  other  end? 

Mr.  Strauss.  They  are  paid  by  the  purchaser,  I  imagine.  I  am 
sure  our  people  are  not  paying  them. 

Mr.  Saunders.  So  that  they  are  not  a  burden  on  our  people  if 
our  people  are  not  paying  them? 

Mr.  Strauss.  I  think  that  is  correct. 

Mr.  Saunders.  The  shipper  don't  pay  it  at  this  end  and  take  it  out 
at  the  other  end? 

Mr.  Strauss.  I  think  not  under  the  present  conditions,  because 
competition  from  other  countries  has  practically  been  cut  off,  even 
in  neutral  steamers. 

Mr.  Byrnes.  Are  you  satisfied  the  price  which  the  producer  re- 
ceives is  not  affected  at  all  bj^  the  price  of  the  shipping  rates? 

Mr.  Strauss.  I  think  that  is  true  now ;  but  I  do  not  think  it  is 
true  in  normal  conditions. 

jNIr.  Saunders.  I  am  not  limiting  my  inquiry  now  to  normal  con- 
ditions. 

Mr.  Strauss.  Under  normal  conditions  they  have  their  difficulties 
in  common, 

Mr.  Byrnes.  But  do  you  think  there  is  no  effect  at  all? 

Mr.  Strauss.  Broadly  speaking,  I  should  say  not.  There  may  be 
cases. 

Mr.  Byrnes.  You  do  not  think  the  increased  rates  that  the  con- 
sumer pays,  which  has  the  effect  of  reducing  his  purchasing  power, 
would  in  any  way  affect  the  price  received  by  the  producer  for  his 
commodity  ? 

Mr.  Strauss.  I  do  not  think  it  does  under  present  conditions. 
But  men  like  Mr.  Childs  here,  who  are  practical  exporters,  would 
know  about  that. 


I 


SHIPPING  BOARD,  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE.     491 

Mr.  Byrnes.  I  only  asked  the  question  because  of  the  testimony 
of  "witnesses  who  have  come  before  us  during  the  last  two  weeks, 
who  have  different  views,  and  I  wanted  your  view. 

Mr.  Strauss.  That  does  not  come  within  ni}'  experience,  and  I  as- 
sume the  gentleman  does  not  want  me  to  express  an  opinion. 

Mr.  Saunders.  I  want  you  to  understand  that  I  am  limiting  my 
inquiry  to  abnormal  conditions.  I  understand  in  normal  conditions, 
if  the  rates  are  prohibitive,  that  he  would  take  a  lesser  volume  of 
goods. 

Mr.  Strauss.  I  understood  your  question. 

Mr.  Saunders.  I  wanted  to  bring  out  that  we  are  now  moving 
everything  from  this  country  that  we  could  possibly  move  even 
if  rates  were  reduced  at  the  present  time. 

The  Chairman.  Is  it  your  idea  that  private  capital  has  been  de- 
terred from  going  into  the  shipping  business  in  the  last  couple  of 
years  on  account  of  the  persistent  talk  of  Government  ownership? 

Mr.  Strauss.  You  mean  since  the  beginning  of  the  war? 

Mr.  Edmonds.  Yes. 

Mr.  Strauss.  I  think  since  the  beginning  of  the  war  private  capi- 
tal has  gone  into  the  shipping  business,  but  I  think  it  has  generally 
been  under  the  stimulus  of  concerns  like  petroleum  companies,  which 
have  bought  tank  ships  and  paid  high  prices.  The  cost  of  construc- 
tion here,  I  imagine,  has  been  no  higher,  and  perhaps  in  some  cases 
lower,  than  abroad.  And  it  is  from  that  motive  that  the  shipyards 
are  all  filled  up  for  at  least  two  years. 

Mr.  Edmonds.  In  the  building  up  of  a  permanent  merchant  ma- 
rine, do  you  not  think  private  and  ordinary  shippers  have  been  dis- 
couraged in  starting  lines,  and  all  that  sort  of  thing,  on  account  of 
the  Government-ownership  agitation? 

Mr.  Strauss.  I  do  not  think,  supposing  that  the  abnormal  condi- 
tions last  for  two  years,  that  plans  have  been  made  looking  that  far 
ahead:  but  I  can  not  say  as  to  that.  I  think  everyone  has  tried  to 
provide  for  the  needs  of  the  minute,  and  that  they  see  ample  profit 
in  doing  that. 

The  Chairman.  With  this  proposed  legislation  hanging  over  their 
heads  like  Damocles's  sword,  we  have  nearly  a  million  tons  of  ships 
now  being  constructed.  I  wish  they  would  get  real  scared  and  con- 
tract for  a  million  tons  more. 

Mr.  Greene.  The  chairman  has  said  there  has  been  no  effort  made 
to  build  up  an  American  merchant  marine  in  the  past.  There  has 
been  an  effort,  and  it  came  very  much  nearer  being  consummated 
than  even  the  shipping  bill  last  year,  in  the  form  of  subsidy  bills  that 
have  been  presented ;  that  is,  they  were  mail  subsidies,  with  a  condi- 
tion in  them  that  the  vessels  were  likely  to  be  taken  by  the  Govern- 
ment for  the  use  of  the  Navy  in  case  of  trouble  or  for  transports  for 
the  United  States.  There  have  been  efforts  made — I  suppose  to  your 
knowledge — to  procure  that  kind  of  legislation  which  came  very  near 
consummation.  In  one  case  the  bill  passed  the  House,  and  in  another 
case  it  passed  the  Senate  once  and  came  over  to  the  House  and  lacked 
confirmation  by  1  vote  only.  That  is  nearer  than  any  shipping  bill 
has  come  yet. 

Mr.  Strauss.  I  believe  that  the  equalizing  payments  that  are  pro- 
vided for  in  the  bill  of  the  chamber  of  commerce,  so  far  as  construc- 
tion is  concerned,  would  graduallj^  taper  off.    Probably  no  payments 


492      SHIPPTNG  BOAED^  NAVAL  AUXILIARY,  AND  MEECHANT  MAEINE. 

would  be  required  now,  and  I  think  they  would  taper  off,  provided 
operation  is  made  possible.  Of  course,  the  word  "  subsidy "  has 
always  had  a  more  or  less  invidious  meaning. 

Mr.  Greene.  I  understand  that  it  has  scared  some  people. 

Mr.  Strauss.  If  you  call  it  an  equalizing  payment — I  mean  a  pay- 
ment mereW  to  equalize  the  cost  of  operation — perhaps  that  word 
would  be  robbed  of  some  of  its  terrors.  I  believe  what  we  have  to 
have  in  this  country  is  a  campaign  of  education  as  to  equalizing  sub- 
sidies, just  as  we  had  on  gold  and  silver.  It  may  take  time,  but  per- 
sonall}^  I  do  not  believe  we  will  ever  get  anywhere  until  we  educate 
the  public  on  that  point  and  they  come  to  realize  the  necessity. 

Mr.  Greene.  I  think  so  myself. 

Mr.  Strauss.  That  is  just  a  personal  view. 

STATEMENT  OF  MR.  R.  G.  RHETT,  OF  CHARLESTON,  S.  C, 
PRESIDENT  OF  THE  CHAMBER  OF  COMMERCE  OF  THE  UNITED 
STATES. 

Mr.  Rhett,  I  am  at  present  the  president  of  the  Chamber  of  Com- 
merce of  the  United  States,  succeeding  Mr.  Fahey  who  just  spoke. 

I  only  want  to  sayj  Mr.  Chairman,  to  supplement  what  Mr.  Fahey 
has  said,  that  the  mission  of  this  chamber  is  to  endeavor  to  inform 
the  business  people  of  this  country  regarding  great  national  questions, 
such  as  you  are  considering — to  give  them  accurate  and  concise  in- 
formation on  both  sides — and  to  endeavor  to  have  them  consider  these 
questions  carefulh^  and  deliberately,  sending  to  us  their  definite  con- 
clusions on  these  business  subjects. 

We  have  been  trying,  and  each  time  v\e  issue  a  referendum  we  try 
harder,  to  make  these  statements  fair  and  concise — documents  that 
will  really  educate.  We  also  endeavor  to  get  the  commercial  organi- 
zations in  the  membership  to  consider  these  questions  deliberately 
and  to  discuss  them,  finding  among  themselves  the  best  method  of 
informing  their  members  on  these  subjects  in  order  that  their  deci- 
sions may  be  really  intelligent.  It  is  a  process  of  education.  Our 
first  referendum  was  not  very  carefully  considered,  but  each  succeed- 
ing referendum  has  excited  greater  and  greater  interest.  Each  cham- 
ber is  studying  how  it  can  get  a  fair  opinion  from  the  majority  of  the 
business  men  of  its  community. 

Now,  I  noticed  in  the  testimony  of  Mr.  Douglas  that  Mr.  Byrnes, 
from  mj^  own  State,  gave  an  example  of  what  possibly  the  action  of 
a  chamber  might  mean,  referring  to  the  Charleston  Chamber  of 
Commerce.  I  want  first  to  explain  why  that  particular  action  was 
taken  by  the  Charleston  chamber,  and,  in  the  second  place,  to  explain 
to  you  exactly  the  manner  in  which  the  Charleston  chamber  reached 
its' decision,  in  the  national  chamber's  referendum,  regarding  the 
merchant  marine  situation.     Mr.  Byrnes  said : 

With  reference  to  the  value  of  your  referendum.  I  want  to  ask,  inasmuch  as 
this  committee  has  already  before  it  a  bill  regulating  compulsory  pilotage,  and 
the  Charleston  Chamber  of  Commerce  have  presented  here  last  week  a  resolu- 
tion requesting  this  committee  to  report  that  bill,  and  this  week  the  committee 
has  before  it  a  resolution  from  the  same  chamber  asking  us  to  vote  against  the 
bill  which  "it  favored  the  week  before,  do  you  not  think  that  there  is  some  pos- 
sibility, if  the  framer  of  this  bill  should  appear  before  the  Charleston  Chamber 
of  Commerce  and  some  other  organizations  of  that  character,  they  might  behave 
in  like  manner  and  send  resolutions  up  here  asking  us  to  vote  for  the  bill? 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     493 

Now,  gentlemen,  I  would  like  to  explain  personally  what  took  place 
in  that  matter.  Our  merchants  and  shippers  in  Charleston  had  been 
for  years  complaining  that  they  were  unable  to  get  pilotage  rates  in 
the  port  of  Charleston  on  a  parity  in  several  respects  with  neighbor- 
ing ports.  They  came  to  me  and  asked  me  if  I  would  appear  before 
this  committee  on  the  subject  of  the  pilotage  bill,  in  an  endeavor  to 
get  the  Government  to  regulate  the  rates  of  pilotage  on  barges,  about 
which  there  was  most  complaint  and  which  in  my  opinion  were  rather 
outrageous.  I  asked  the  merchants  and  shippers  to  allow  me  to  finish 
the  organization  of  the  Charleston  chamber,  and  then  bring  the  mat- 
ter before  that  body. 

I  completed  our  organization,  with  a  thousand  members,  and  I 
then  called  a  public  meeting,  at  which  I  asked  the  shippers  to  appear, 
and  I  asked  the  pilots'  association  to  appear.  Our  harbor  is  gov- 
erned by  a  harbor  commission  of  13  men,  and  a  subcommittee  of  5 
governs  the  pilots  and  fixes  their  rates.  Two  pilots  are  on  that  sub- 
committee and  three  business  men.  They  appeared  before  the  mem- 
bers of  the  board  of  directors  of  the  chamber,  of  whom  18  out  of  25 
were  present,  and  the  shippers  presented  their  case.  There  then 
appeared  three  men  on  behalf  of  the  pilots — three  out  of  the  five 
members  of  the  subcommittee  of  the  harbor  commission,  the  sub- 
committee that  fixes  the  pilotage  rates.  These  three  men,  in  speaking 
for  the  pilots,  did  not  suggest  that  the  rates  were  to  any  extent  out 
of  the  way.  On  the  other  hand,  they  contended  that  they  were  very 
proper  charges.  When  they  got  through  the  hearing  we  asked  each 
other,  "  What  chance  have  the  shippers  of  Charleston  to  get  these 
pilotage  rates  reduced  ?  "  and  there  was  a  unanimous  vote  that  we 
should  come  up  here  and  ask  3^ou  gentlemen  to  relieve  us  from  the 
situation,  inasmuch  as  three  out  of  the  five  on  the  subcommittee  of 
the  harbor  commission  did  not  see  the  impropriety  of  changing  rates 
on  barges. 

I  did  not  think  that  was  a  fair  test  on  which  to  come  up  here 
before  your  committee.  I  went  before  the  mayor  next  morning  and 
asked  that  the  harbor  commissioners  be  summoned.  I  appeared  be- 
fore the  harbor  commissioners  and  demanded  that  they  put  in  rates 
at  once  which  would  relieve  this  barge  situation  and  also  other  dis- 
criminations. The  result  was  that  the  pilots  offered  to  turn  over  to 
me  their  books  for  5  or  6  or  10  years,  to  show  what  they  received  un- 
der the  current  charges,  including  pilotage  on  barges.  A  motion 
was  made  that  I  take  those  books  and  examine  them  and  come  back 
again  before  the  commission  and  make  a  statement  as  to  what  I 
thought  was  fair  and  just  under  all  the  circumstances.  An  exami- 
nation of  those  books  convinced  me  that  if  the  Government  took 
away  the  whole  of  the  coastwise  pilotage  pilots  in  the  number  then 
serving  the  port  could  not  exist.  I  went  to  the  foreign  shippers, 
and  they  saicl,  "We  could  not  have  a  less  number;  we  are  just  build- 
ing a  new  coal  terminal,  and  it  would  be  very  dangerous  to  reduce  the 
number."  However,  I  satisfied  myself  that  these  things  that  I  asked 
ought  to  be  done.  I  prepared  a  report  reducing  the  charges  for  pilot- 
age barges,  called  the  shippers  before  me,  and  asked  them  whether 
these  reductions  were  satisfactory  to  them.  They  said,  "  Yes."  I 
called  the  pilots  up  to  meet  them,  and  they  agreed  on  the  rates.  I 
went  down  to  the  harbor  commissioners  and  offered  that  amendment 
32910—16 32 


494      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

to  their  j^ilotage  rates,  to  be  put  into  effect  immediately.  The  resohi- 
tion  was  carried  and  the  rates  became  elfective  that  day. 

Under  these  conditions,  gentlemen,  there  was  no  reason  for  the 
Chamber  of  Commerce  to  come  ii]3  here  and  ask  3'ou  gentlemen  to 
fix  rates,  when  we  had  already  arranged  them  to  the  entire  satis- 
faction of  the  shippers,  and  fixed  them  by  reason  of  the  action  of 
the  chamber.  We  therefore  made  a  full  explanation  in  our  resolu- 
tion, stating  that  inasmuch  as  our  harbor  commissioners  had  given 
us  entirely  satisfactory  rates,  we  asked  you  gentlemen  to  confine 
your  regulation  of  tolls  to  the  inland  waterways.  I  think  it  is  due 
to  you,  gentlemen,  that  I  should  make  this  explanation  with  respect 
to  the  situation  to  which  iSIr.  Byrnes  referred. 

So  far  as  the  matter  of  the  merchant  marine  is  concerned.  I  want 
to  explain  to  you  how  our  chamber  proceeded.  The  president  of 
the  chamber,  who  was  in  office  at  the  time,  was  in  favor  of  your  last 
shipping  bill,  and  in  favor  of  the  principle  of  the  United  States 
purchasing  and  owning  and  operating  ships.  He  himself  selected 
a  committee  of  12.  That  committee  came  together  with  the  national 
chamber's  referendum  before  it  and  discussed  it  all  evening.  When 
they  came  to  a  vote,  it  Avas  11  to  1  against  the  Government  acquir- 
ing and  operating  merchant  vessels.  The .  president's  was  the  sole 
vote  favoring  that  proposition. 

Now,  on  the  next  proposition — Government  ownership  of  vessels. 
coupled  with  private  operation — they  said,  "Yes;  if  it  Avas  confined 
to  naval  auxiliaries."  So  far  as  subsidy  as  a  means  of  permanent 
upbuilding  of  the  merchant  marine  of  tramp  ships,  thev  voted 
"Yes." 

The  CiiAiKJLAX.  Are  you  sure  they  voted  "  Yes?" 

Mr.  IviiETT.  For  subsid3^ 

The  Chairman.  On  tramp  ships? 

Mr.  Rhett.  Yes ;  on  tramp  ships. 

The  Chairman.  There  is  no  nation  in  the  world  that  does  that. 

Mr.  Rhett.  On  ships  of  that  class,  you  will  see  on  the  third  ques- 
tion (that  is  the  subsidy  question),  and  on  the  fourth,  for  subA'en- 
tions,  they  voted  j^es.  I  must  say  to  you  gentlemen  that  I  was  ex- 
ceedingly surprised  to  see  that  Charleston.  Savannah,  all  of  Georgia, 
all  of  Tennessee,  and  all  of  Virginia  voted  on  that  as  the  permanent 
means  of  upbuilding  this  merchant  marine. 

NoAv,  that  report  of  the  committee  was  taken  back  to  the  Cham- 
ber of  Commerce.  It  was  not  adopted  in  any  ])erfunctory  way.  It 
was  taken  back  to  the  board  of  directors  and  there  discussed  an 
entire  eA'ening.  I  was  present  and  sat  down  and  listened  to  the 
discussion.  In  that  discussion  they  unanimously  confirmed  the 
report  of  the  committee  so  far  as  the  first  question  Avas  concerned. 

I  only  Avant  to  tell  you  hoAv  carefully  these  things  are  now  being 
done  in  these  chambers.  On  the  present  seamen's  bill  we  have  in 
the  Charleston  chamber  a  committee  of  21.  A  pilot  is  in  the  mem- 
bership: the  president  of  the  labor  union  is  on  the  committee;  and 
Ave  have  farmers  on  the  committee.  We  have  endeavored  to  collect 
the  whole  community,  because  the  purpose  of  these  chambers  is  to 
draw  out  what  the  people  think  Avhen  they  hear  both  sides  of  the 
question.  That  is  all  our  purpose.  If  Ave  do  not  succeed  it  is  not 
because  we  are  not  trying. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     495 

The  Chairman.  What  was  your  action  on  the  seamen's  bill? 

Mr.  Khett.  They  have  not  had  it  yet,  sir. 

The  Chairman.  Several  chambers  of  commerce  have  passed  reso- 
lutions and  sent  them  to  us  recommending  its  repeal,  notwithstand- 
ing that  section  14  of  that  act  includes  in  terms  the  International 
Convention  on  Safety  of  Life  at  Sea,  to  which  all  the  maritime 
nations  of  the  world  have  agreed. 

Mr.  Rhett.  No;  I  want  to  differ  with  you  on  that.  In  the  first 
place,  it  contains  provisions  which  the  international  conference  de- 
clined to  incorporate  and  it  omits  provisions  that  the  international 
conference  did  incorporate. 

The  Chairman.  I  beg  your  pardon:  you  are  not  correct  in  that. 

Mr.  Rhett.  It  contains  an  entire  provision  requiring  these  life- 
boats to  be  manned  by  able  seamen  or  officers;  and  the  international 
conference  declined  to  insert  that. 

The  Chairman.  There  is  only  one  feature:  the  international  con- 
vention says  that  each  lifeboat  shall  be  in  charge  of  a  licensed  officer 
or  seaman.  The  seaman's  law  says  "  a  licensed  officer  or  able  sea- 
man."   That  is  the  only  difference. 

Mr.  Rhett.  The  committee  thought  there  Avere  a  good  many  con- 
diti(ms.  In  the  first  place,  it  applies  not  only  to  passenger  ships,  but 
it  applies  to  all  ships:  in  the  second  place,  it  made  no  provision 
whatever  about  safety  in  construction.  All  of  that  was  omitted  in 
this  bill.    Therefore,  only  parts  of  that  convention  are  included. 

The  Chairman.  I  say  it  included  in  terms,  with  that  one  excep- 
tion, the  provisions  of  the  international  convention  on  safety  of  life 
at  sea.  as  applied  to  vessels  in  the  foreign  trade. 

Mr.  Rhett.  They  felt  that  one  thing  was  a  serious  matter  on  the 
score  of  expense:  but  it  is  out  at  referendum  now  and  we  can  not 
ansAver  until  the  ballots  are  received. 

The  Chairman.  It  just  struck  me  that  they  had  never  read  the 
bill,  and  I  am  inclined  to  think  that  is  so.  They  certainly  did  not 
understand  it. 

(Thereupon,  at  1.07  o'clock  p.  m..  a  recess  was  taken  until  '2  o'clock 
p.  m.) 

after  recess. 

The  committee  reconvened  pursuant  to  the  taking  of  the  recess. 

STATEMENT  OF  MR.  IRVING  T.  BTJSH,  OF  NEW  YORK,  PRESIDENT 
OF  THE  BUSH  TERMINAL  CO. 

Mr.  Bush.  I  speak  today  for  the  Chamber  of  Commerce  of  New 
York,  as  the  chairman  of  their  special  committee  on  merchant  marine 
in  foreign  trade.  I  speak  in  the  absence  of  Mr.  Seth  Low,  president 
of  the  chamber,  who  had  expected  to  be  here. 

The  Chairman.  I  have  a  letter  from  him  in  which  he  under- 
takes to  set  forth  the  position  of  the  chamber  of  commerce  on  the 
bill.    Is  it  your  wish  that  that  go  into  the  record  ? 

Mr.  Bush.  A  printed  letter? 

The  Chairman.  It  is  a  typewritten  letter  addressed  to  me  by 
Mr.  Low  as  president  of  the  chamber  of  commerce. 

Mr.  B.usH.  Yes;  I  would  like  to  have  that  inserted  in  the  record. 


496      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

(The  letter  referred  to  is  as  follows:) 

Chamber  of  Commerce, 

New  York,  February  19,  1916. 
Hon.  Joshua  AV.  Alexander, 

Chairman  Committee  on  Merchant  Murine  and  Fisheries, 

Washington,  D.  C. 

Sir  :  The  Chamber  of  Commerce  of  the  State  of  New  York  regrets  that  it 
can  not  agree  with  the  principles  underlying  the  Alexander  bill,  H.  R.  10500. 

While  the  chamber  is  in  accord  with  the  desire  of  the  authors  of  the  bill  to 
promote  American  shipping  and  to  relieve  the  immediate  and  pressing  need  for 
additional  cargo  capacity  in  the  foreign  trade  of  the  United  States,  it  is  con- 
vinced that  the  establishment  of  the  principle  of  Government  ownership  and 
operation  of  merchant  vessels  will  prevent  the  construction  by  private  capital 
of  a  greater  number  of  vessels  than  will  be  constructed  by  the  Government 
under  the  proposed  bill  and  thus  decrease  and  not  increase  the  number  of 
vessels  available  for  foreign  trade  under  the  American  flag. 

The  chamber  further  submits  that  American  shipbuilding  yards  are  unable 
to  accept  order  for  the  construction  of  vessels  of  sufficient  size  to  engage  profit- 
ably in  foreign  commerce  for  delivery  within  a  period  of  two  years,  and  that 
the  only  tonnage  which  can  be  brought  to  the  relief  of  the  present  situation  by 
Government  ownership  is  the  limited  number  of  merchant  vessels  which  can 
be  built  in  Government  naval  yards. 

The  shipbuilding  industry  of  the  United  States,  after  a  long  period  of  de- 
pression, is  beginning  to  feel  the  stimulus  of  the  increased  demands  for  vessels 
and  the  capacity  of  existing  yards  is  being  increased  and  new  shipbuilding 
enterprises  are  projected. 

It  is  the  opinion  of  the  chamber  that  the  number  of  vessels  which  it  may 
be  possible  to  build  immediately  in  Government  yards  will  be  so  limited  that 
the  advantage  gained  will  not  offset  the  discouragement  to  American  initiative 
to  develop  and  extend  private  owned  shipbuilding  industries  of  the  country. 

The  chamber  is  in  accord  with  the  principle  of  creating  a  Government  board 
to  study  and  control  the  maritime  laws  and  policies  of  the  United  States, 
providing  the  authority  vested  in  such  a  board  looks  to  the  development  of 
American  shipping  by  the  encouragement  of  American  enterprise. 

The  chamber  deprecates  as  unwise  an  attempt  to  regulate  the  rates  for 
carrying  freight  through  the  medium  of  such  a  board.  It  believes  that  \inder 
normal  conditions  the  competition  of  the  ocean-carrying  tonnage  of  the  world 
is  a  sufficient  safeguard  against  unduly  higher  rates,  and  is  convinced  that  an 
attempt  on  the  part  of  such  a  board  to  regulate  the  rates  will  prove  to  be  an 
additional  disadvantage  to  American  conmierce  in  meeting  the  competition  of 
foreign  nations. 

The  chamber  believes  that  the  provision  to  require  a  license  for  all  vessels 
sailing  from  ports  in  the  United  States  should  not  be  enacted  without  more 
careful  stiidy,  and  a  moi'e  complete  estimate  of  the  probable  consequences  to 
the  trade  of  this  country.  Any  provision  which  may  make  it  more  costly  or 
difficult  to  operate  vessels  from  and  to  the  ports  of  this  country  burdens  its 
entire  commerce  and  industry.  The  farmers  of  the  West,  for  instance,  must 
sell  their  grain  in  competition  with  the  growers  of  Argentine.  Any  burden 
upon  shipping  from  American  ports  \\hich  can  not  be  equally  imposed 
upon  shipping  from  the  Argentine  will,  in  the  end,  be  borne  by  those  who 
produce  in  this  country  the  commodities  which  must  be  sold  abroad  in  compe- 
tition with  those  of  other  countries. 

The  discussion  of  the  effect  of  rates  or  other  regulations,  even  such  as  might 
be  applied  to  foreign  ships  plying  from  our  ports  equally  with  American  ships, 
should  not  lose  sight  of  the  fact  that  we  have  not  only  to  consider  the  effects 
upon  shipping  as  such,  but  we  have  also  to  consider  the  effect  upon  our  export 
trade  in  products  and  commodities,  which  is  a  vastly  larger  and  more  important 
question. 

Even  if  all  ships  under  foreign  flags  plying  from  our  ports  could,  by  license 
or  other  means,  be  brought  under  the  same  regulations  as  it  is  intended  to  apply 
to  ships  under  the  American  flag,  it  will  still  be  true  that  all  foreign  ships 
plying  from  their  own  ports  carrying  products  and  commodities  to  foreign  ports 
with  which  our  products  and  commodities  must  be  in  competition  at  those  ports, 
will  be  free  of  all  such  regulations. 

The  foregoing  objections  to  the  Alexander  bill,  H.  R.  10500.  are  fuHdamental 
and  while  the  chamber  of  commerce  would  be  glad  to  believe  that  there  is  some 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     497 

basis  upon  which  this  bill  can  be  amended  and  made  satisfactory,  it  can  see 
no  way  by  which  the  vital  objections  can  be  overcome,  and  therefore  respect- 
fully urges  that  it  be  disapproved. 

^^'hile  disagreeing  with  the  principles  underlying  the  Alexander  bill,  H.  R. 
10500,  the  cliauiber  recognizes  that  if  an  American  merchant  marine  is  to  be 
reestablished,  some  measure  of  Government  aid  must  be  extended.  The  in- 
creased cost  of  operating  vessels  under  the  American  flag  is  largely  due  to 
conditions  which  have  been  created  by  the  American  people  through  legislative 
action,  and  the  increased  cost  of  constructing  vessels  in  this  country  is  largely 
due  to  the  fact  that  the  shipbuilding  industry  has  not  been  sufficiently  developed 
and  the  character  of  ves.sel  and  method  of  construction  not  standardized. 

It  is  the  belief  of  the  chamber  that  when  a  demand  has  been  created  for 
American-built  vessels,  the  capacity  of  American  yards  increased  and  the  type 
standardized,  the  cost  of  constructing  vessels  in  this  country  will  be  no  greater 
than  in  Europe.  The  supply  of  ore  and  coal  is  unlimited  and  American  in- 
genuity has  shown  in  countless  instances  its  ability  to  compete  with  foreign 
nations,  through  the  medium  of  machine  tools,  in  the  production  of  standardized 
articles,  even  though  the  labor  cost  be  higher  in  the  United  States.  Until  con- 
struction cost  is  equalized  by  natural  conditions,  some  artificial  basis  of  equaliza- 
tion must  be  established,  if  vessels  are  to  be  constructed  under  normal  condi- 
tions in  this  country  for  foreign  trade.  Under  present  war  conditions  no 
equalization  of  constriiction  costs  is  necessary. 

While  it  is  the  opinion  of  the  chamber  that  the  difference  in  the  cost  of  op- 
erating vessels  under  the  American  flag  and  under  flags  of  European  nations  is 
less  than  is  sometimes  stated  to  be  the  case,  it  is  still  sufliiciently  large  to  pre- 
vent under  normal  conditions  the  creation  of  a  substantial  merchant  marine 
under  the  American  flag. 

The  chamber  does  not  believe  that  a  subsidy  assuring  a  profit  to  owners  of 
American  vessels  in  foreign  trade  is  neccessary,  or  in  accord  with  the  desires 
of  the  American  people,  but  it  believes  that  the  spirit  of  the  people  of  this 
country  will  agree  with  the  principles  of  Government  aid  to  equalize  construc- 
tion and  operating  conditions  to  a  point  which  will  merely  place  the  American 
vessel  owner  upon  an  ecpial  basis  with  his  foreign  competitors. 

Experience  has  shown  that  the  mail  act  of  1891  has  not  been  a  suflicient  in- 
ducement to  establish  mail-carrying  steamship  lines.  It  is  the  opinion,  however, 
of  the  chamber  that  if  the  speed  requirements  for  vessels  engaged  in  trades 
where  it  is  not  necessary  to  maintain  high  speed  be  reduced  to  reasonable  levels, 
advantage  will  be  taken  of  the  provisions  of  the  mail  act  of  1891,  and  lines  under 
the  American  flag  established. 

The  chamber  has  therefore  prepared  a  bill  which  has  been  introduced  into 
Congress,  providing  for  encouragement  to  private  enterprise  to  develop  and  in- 
crease an  American  merchant  marine. 

The  chief  principles  underlying  this  bill  may  be  divided  into  four  parts : 

First.  The  creation  of  a  shipping  board  of  such  character  to  command  the 
services  of  men  experienced  in  shipping  matters,  whose  judgment  will  inspire 
the  confidence  of  the  people  of  the  United  States.  Under  this  board  should 
be  placed  the  direction  and  control  of  the  laws  and  regulations  of  all  matters 
pertaining  to  Aauerican  shipping,  and  it  should  be  charged  with  the  responsi- 
bility of  suggesting  to  Congress  legislation  which  will  foster  and  encourage  our 
merchant  marine. 

Second.  It  gives  to  the  Postmaster  General  the  discretionary  power  to  make 
certain  reductions  in  the  speed  requirements  of  vessels  operating  under  the 
mail  act  of  1891,  in  trades  where  in  his  judgment  the  pulDlic  welfare  of  this 
country  will  be  served  by  a  speed  for  mail  vessels  less  than  that  called  for 
under  said  act. 

Third.  It  provides  that,  when  the  shipping  board  has  approved  plans  for 
the  construction  of  vessels  under  the  American  flag  for  foreign  trade  and  has 
agreed  that  it  is  in  the  interest  of  the  public  welfare  to  establish  the  service 
in  which  the  vessels  are  to  be  used,  the  Government  pay  to  those  who  construct 
such  vessels  in  American  shipyards  the  difference  between  their  actual  cost 
and  the  cost  of  constructing  vessels  similar  in  all  respects  in  the  yards  of 
nations  having  a  maritime  tonnage  equal  to  or  greater  than  that  of  the  United 
States.  These  payments  should  decrease  as  the  shipbuilding  industry  is  devel- 
oped, and  ultimately  cease. 

Fourth.  It  provides  that  the  Government  shall  pay  for  a  limited  period  to 
the  owners  or  operators  of  vessels  under  the  American  flag,  when  the  con- 
struction of  their  vessels  and  character  of  their  service  has  been  approved  by 


498      SHIPPING  BOAED,  NAVAL  AL'XILIAKV,  AND  MERCHANT  MARINE. 

the  shipping  board,  the  difference  between  the  cost  of  operating  the  vessels 
under  the  American  flag,  and  the  highest  cost  of  operating  them  under  a 
foreign  flag. 

Attention  is  called  to  the  fact  that  nothing  can  be  done  under  this  act  without 
the  approval  of  the  shipping  board  acting  in  the  interest  of  public  welfare, 
and  that  it  provides  for  Government  aid  for  a  definitely  limited  period.  Con- 
tracts under  the  provision  of  this  act  may  only  be  entered  into  for  a  period 
of  10  years,  and  each  contract  will  last  only  for  a  period  of  20  years.  The 
period  of  10  years  has  been  established  because  it  is  the  opinion  of  the  chamber 
that  it  should  be  possible  to  arrange  for  a  substantial  merchant  marine  within 
that  time,  and  a  period  of  development  reached  where  the  cost  of  constructing 
vessels  in  American  yards  be  equalized.  The  period  of  20  years  has  been 
established  because  it  is  the  belief  of  the  chamber  that  any  vessels  constructed 
under  the  act  should  be  entitled  to  equal  operating  conditions  during  the 
ordinary  life  of  vessel  property,  which  is  estimated  to  be  20  years.  The  right 
to  requisition  for  naval  or  military  purposes  all  vessels  built  under  this  act 
is  reserved  to  the  Government. 

The  chamber  respectfully  submits  that  legislation  based  upon  the  foregoing 
l»rincipU'S  will  stimulate  and  encourage  American  enterprise  to  do  far  more 
to  develop  an  American  merchant  marine  than  the  limited  Government 
program  proposed  in  H.  R.  10500.  It  will  substitute  Government  coopera- 
tion for  Government  competition,  and  bring  vastly  greater  benefit  to 
the  commerce  and  industry  of  all  parts  of  the  United  States,  without  creating 
subsidies  unduly  profitable  to  the  owners  of  American  vessels.  It  will  merely 
place  the  American  shipowner  upon  an  equality  with  his  foreign  competit(»r ; 
and  if  this  is  done,  it  is  the  opinion  of  the  chamber  that  the  enterprise  and 
courage  of  the  American  people  will  create  a  merchant  marine  second  to  none. 
Respectfully, 

Seth  Low,  l^rcsidcnt. 

Mr.  Bush.  I  want  first  to  say  just  a  word  about  the  character  of 
the  committee  of  the  chamber  who  have  been  considering  this  mer- 
chant-marine problem.  The  first  consideration  was  before  a  small 
committee  of  which  I  was  chairman.  We  made  a  report  last  year 
to  the  full  chamber,  at  w-hich  time  the  large  meeting  room  of  the 
chamber,  holding  over  300  people,  was  filled :  not  a  seat  Avas  vacant. 
That  report  was  turned  doAvn  and  a  second  report  was  adopted  by  the 
chamber  with,  I  think,  only  one  dissenting  vote. 

The  Chairman.  I  believe  the  first  report  was  in  favor  of  free 
ships,  was  it  not  ? 

Mr.  Bush.  No  ;  that  was  after  the  free-ship  bill  had  been  passed. 

The  Chairman.  I  say  your  first  report  was  in  favor  of  free  ships. 

Mr.  Bush.  That  is  not  the  report  to  which  I  refer.  That  was 
before  my  appointment  as  a  member  of  our  committee,  and  I  am 
not  familiar  with  the  action  which  was  taken.  The  first  report  we 
made  was  made  after  the  free-ship  bill  had  been  passed  by  Congress 
and  was  enacted  into  law. 

The  chamber  was  most  anxious  that  the  body  who  considered  the 
merchant-marine  matter  from  their  standpoint  should  be  representa- 
tive, so  that  three  committees  of  the  chamber,  totaling  about  25 
men.  were  consolidated  into  one  large  group,  and  practically  all  of 
the  considerations  and  discussions  of  the  committee  have  been  by  a 
combined  committee  of  this  character. 

From  the  standpoint  of  New  York,  the  membership  of  that  com- 
mittee is  as  representative  of  shipping  experience  and  intelligence, 
from  the  position  of  the  steamship  men  on  the  committee,  from  the 
position  of  shippers,  and  from  the  position  of  men  identified  with 
banking  and  with  marine  insurance,  as  it  could  be  made.  I  will  be 
very  glad  to  furnish,  should  the  committee  so  desire,  a  list  of  the 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     499 

committee;  but  I  will  not  burden  the  record  with  it  at  the  present 
time.  I  will  say,  however,  that  the  steamship  men  on  that  committee 
are  men  who  have  been  for  a  great  many  years  identified  with  the 
foreign  trade  of  this  country,  and  wdien  they  speak  to-daj'  they  will 
not  speak  from  the  standpoint  of  an  experience  in  sailing  their  first 
vessel. 

The  chamber  is  exceedinglv  sorry  it  can  not  agree  with  the  pro- 
visions of  House  bill  10500.  When  the  Alexander  bill  was  intro- 
duced we  were  most  anxious  to  see  if  there  was  not  some  possible 
basis  on  which  we  could  support  that  measure,  because  we  recognize 
that  the  present  time  is  the  first  great  opportunity  we  have  had  for 
something  really  constructive  in  the  way  of  building  up  our  merchant 
marine.  But  our  differences  with  that  bill  are  so  fundamental  that 
we  see  no  way  in  which  it  can  be  amended  to  meet  what  we  consider 
absolute  essentials  for  the  sound  upbuilding  of  our  merchant  marine. 
Our  basic  objection  to  the  Alexander  bill  is  our  profound  belief  that 
the  entrance  of  the  Government  of  tlie  United  States  into  the  owner- 
ship and  operation  of  merchant  vessels  will  prevent  the  construction 
of  a  greater  tonnage  than  the  United  States  will  bring  to  the  relief 
of  the  present  situation.  As  has  been  pointed  out,  $50,000,000  will 
only  construct  about  50  ships  of  10.000  tons  each,  at  an  average  cost 
of  $100  per  ton:  and  we  are  convinced  that  the  mere  introduction  of 
Government  competition  is  going  to  deprive  the  American  shipper 
and  American  commerce  of  a  much  greater  tonnage  than  this  limited 
tonnage  constructed  by  the  Government.  We  feel  that  the  only  ton- 
nage which  can  be  brought  immediately  to  our  relief  by  the  Govern- 
ment is  tonnage  which  may  be  constructed  in  the  Government  navy 
yards,  but  that  limited  tonnage  is  not  a  sufficient  advantage  to  offset 
the  discouragement  which  we  feel  will  come  to  the  owners  of  Ameri- 
can ships  and  the  owners  of  American  shipyards.  The  American 
ship-building  industry,  after  a  long  period  of  depression,  is  just  be- 
ginning to  feel  its  first  stimulus  from  the  increased  demand  for  ton- 
iiage  constructed  in  this  country. 

These  objections  are  fundamental  and  we  see  no  way  in  which  the 
bill  can  be  amended  to  overcome  them.  We  therefore,  with  a  gi'eat 
deal  of  regret,  have  expressed  our  disapproval  of  the  bill. 

We  also  think  it  unAvise  to  attempt  to  regulate  rates  for  carrying 
freight  through  the  medium  of  such  a  board  as  is  proposed  to  be  es- 
tablished. We  believe  that  in  normal  times  the  competitive  ocean- 
carrying  conditions  of  the  world  will  sufficiently  safeguard  the 
country  against  unduly  high  rates;  and  are  convinced  that  an  at- 
tempt to  regulate  rates  through  such  a  board  will  be  an  additional  dis- 
advantage to  American  commerce  in  meeting  the  competition  of 
foreign  nations. 

And  the  chamber  further  believes  that  the  provision  to  require  a 
license 

The  CHAimiAX.  On  that  first  point,  this  committee  investigated 
what  was  popularly  called  the  "  shipping  trust "  and  we  found  that 
all  the  regular  lines,  commonly  speaking,  in  all  the  trade  areas  of  the 
world,  were  in  some  form  of  combination ;  and  that  in  the  three  years 
preceding  1918  the  ocean-freight  rates  had  increased  from  50  to  200 
per  cent  without  any  appreciable  reason,  because  there  had  not  been 
any  increased  cost  of  operating  ships,  except  that  the  combinations 


500      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

had  been  made  more  perfect.  We  were  confronted  with  this  ])ropo- 
sition :  Either  to  provide  that  these  combinations  might  be  broken 
up  and  the  Sherman  antitrust  law  invoked  against  them,  if  they  were 
pernicious,  or  else  provide  some  rational  Government  supervision. 
And  if  you  had  taken  the  pains  to  read  the  report  of  my  committee 
on  that  subject,  and  the  recommendations  of  the  committee  and 
the  bill  that  is  now  pending,  my  notion  is  that  you  could  not 
urge  any  rational  objection  to  reasonable  Government  supervision  in 
the  fixing  of  rates  and  to  prevent  abuses  in  the  interests  of  the  great 
body  of  American  shippers,  discriminations,  deferred  rebates,  fight- 
ing ships,  and  things  of  that  character. 

Mr.  Bush.  Mr.  Chairman,  I  would  much  prefer  to  have  the  gentle- 
men who  have  come  down  with  me  and  who  are  very  much  more 
familiar  with  the  actual  operation  of  ships,  discuss  those  details; 
because  I  feel  I  would  perhaps  unnecessarily  encumber  the  record 
and  take  up  your  time.  I  am  perfectly  willing  to  answer  any  ques- 
tion of  which  I  am  capable.  I,  of  course,  have  opinions  upon  those 
matters,  but  there  are  gentlemen  here  who  have  spent  a  lifetime 
in  operating  ships  and  are  perfectlj^  familiar  with  all  of  those  con- 
ditions and  can  give  you  a  very  much  better  statement,  probably, 
than  I  can,  and  if  it  is  agreeable  to  the  members  of  the  committee,  I 
will  prefer  to  leave  the  discussion  of  details  to  them. 

We  have  realized,  however,  that  some  measure  of  Government  aid 
must  be  extended,  if  anything  is  to  be  accomplished,  and  partly  as  a 
result  of  statements  which  have  been  made  frequently  in  Washing- 
ton (and  to  which  we  take  no  exception,  for  we  believe  they  are 
correct)  that  Ave  have  not  heretofore  brought  down  any  constructive 
suggestions  as  to  what  might  be  done  to  relieve  the  situation  and 
help  in  the  upbuilding  of  our  merchant  marine,  we  have,  after  a 
great  deal  of  study  b}'  this  committee,  composed  of  men  who  have  had 
long  experience,  both  as  steamship  operators  and  shippers,  prepared 
a  bill  which  has  been  introduced.  And  I  would  like  to  say  a  word  or 
two  upon  that  bill  before  introducing  the  speakers  who  are  to  discuss 
the  matter  more  definitely  from  the  standpoint  of  the  shippers  and 
the  steamship  operators. 

The  Chair3ian.  You  refer  to  H.  R.  11865,  introduced  by  Mr. 
Rowe? 

Mr.  Bush.  Yes,  sir;  that  is  the  bill.  We  recognize  that  the  cost 
of  operating  American  ships  under  normal  conditions  is  higher 
than  the  operation  of  ships  under  foreign  flags.  We  believe  that 
these  operating  costs  have  been  increased  through  legislative  action 
resulting  from  the  wishes  of  the  people  that  the  American  seaman 
and  the  officers  of  xA.merican  ships  be  paid  better  wages ;  that  there  be 
a  greater  number  in  the  crew,  and  that  food  and  provisions  for  their 
comfort  be  greater.  These  differences  in  operating  cost  seem  to  us 
to  be  permanent,  and  we  do  not  believe  with  the  standards  of  living 
that  the  American  people  have  established  for  their  seamen  we  can, 
with  aiw  reasonable  foresight,  see  a  time  when  the  operating  condi- 
tions of  an  American  ship  can  be  brought  down  to  an  equal  basis 
with  foreign  tonnage. 

Our  bill  rests  upon  four  main  points.  The  first  is  the  creation  of  a 
shipping  board,  which  is  a  feature  of  almost  every  bill  Avhich  has 
been  introduced.     The  onlj^  difference  between  the  board  which  we 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      501 

suggest  and  that  which  is  provided  in  the  Alexander  bill  is  that  we 
suggest  a  board  of  seven,  five  of  whom  shall  be  appointed  by  the 
President,  and  the  other  two  to  be  the  Secretary  of  the  Navy  and  the 
Secretary  of  Commerce.  I  quite  agree,  and  I  think  the  members  of 
the  committee  quite  agree,  with  the  objections  of  Mr.  Fahey  to-day 
that  the  Secretary  of  Commerce  and  the  Secretary  of  the  Navy,  being 
administrative  officers,  are  burdened  with  other  duties,  and  it  will 
be  impossible,  over  a  long  period  of  years,  for  them  to  devote  the  nec- 
essary time  to  conduct  the  details  of  the  shipping  board.  We  believe, 
therefore,  the  result  will  probably  be  that  the  two  secretaries  will  be 
able  to  give  perhaps  less  and  less  time  to  the  duties  of  that  board, 
and  that  you  should  have  a  larger  body  than  three  to  have  charge  of 
the  actual  conduct  of  the  work  which  the  board  will  have  to  perform, 
and  we  suggest,  therefore,  a  board  of  seven  instead  of  five,  which  will 
give  five  members  appointed  by  the  President. 

Our  second  recommendation  is  that  discretionary  powers  shall  be 
given  to  the  Postmaster  General  to  reduce  the  speed  requirements 
called  for  in  the  mail  act  of  1891  in  trades,  where,  in  his  judgment, 
the  public  welfare  of  the  country  does  not  call  for  a  high  rate  of 
speed.  We  believe  that  there  are  many  trades  in  South  America,  or 
South  Africa,  or  eastern  countries,  where  the  speed  requirements 
called  for  in  the  mail  act  of  1891  are  entirely  in  excess  of  the  actual 
needs  for  mail  service.  We  suggest,  therefore,  that  discretionary 
power  be  given  to  the  Postmaster  General  to  reduce  the  speed  re- 
quirements to  certain  limits  where,  in  his  judgment,  the  public  w^el- 
fare  is  served  by  a  slower  rate  of  speed.  These  lines  can  not  be 
established  without  the  approval  or  without  the  suggestion  from  the 
Postmaster  General.    It  is  left  entirely  in  his  hands. 

The  third  and  the  fourth  main  principles  of  our  bill  are  the  prin- 
ciples which  have  been  alluded  to  here  to-day  as  equalization  princi- 
ples. The  third  is  that  the  difference  between  the  cost  of  construct- 
ing vessels  in  European  countries  and  the  cost  of  constructing  vessels 
in  American  yards,  under  normal  times  and  normal  conditions,  be 
paid  for  by  the  Government.  For  instance,  if  a  vessel  is  to  be  con- 
structed in  a  yard  on  this  side  of  the  water,  the  man  who  proposes 
to  construct  it  must  first  go  to  the  shipping  board  and  submit  his 
plans,  and  they  must  be  approved  by  the  shipping  board;  he  must 
state  the  service  in  which  the  vessel  is  to  be  used,  and  the  character 
of  the  service  must  be  approved  by  the  board,  from  the  standpoint 
of  the  public  welfare,  whether  it  is  a  line  of  service,  which  from  the 
standpoint  of  the  good  of  the  entire  country,  it  is  desirable  to 
have  developed.  When  these  points  have  been  passed  upon  by  the 
board,  then  the  construction  is  undertaken  and  the  man  or  the  cor- 
poration who  has  the  ship  to  build  must  show  the  reasonable  differ- 
ence in  the  cost  of  constructing  in  an  American  yard  the  vessel  or 
vessels  which  he  is  building  and  of  an  exactly  similar  ship  or  vessel 
constructed  in  a  European  yard.  If,  for  instance,  it  cost  $500,000 
here  and  it  cost  $100,000  to  build  a  ship  in  England,  the  Govern- 
ment is,  under  our  bill,  to  make  good  that  difference  of  $100,000. 
That  is  a  difference  in  construction  cost  only,  and  we  believe  with 
the  standardization  of  types  of  vessels,  and  the  grow'th  in  the  de- 
mand for  vessel  property  and  the  increased  development  of  our  ship- 
building industry,  that  that  difference  will  be  wiped  out. 


502      SHIPPING  BOARD,  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE 

The  Chairman.  Will  you  pardon  me  just  at  that  point.  Under  the 
ship-registry  act  of  August  18,  1914,  American  citizens  can  purchase 
loreign-built  ships  for  the  foreign  trade. 

Mr.  Bush.  If  the  vessels  are  bought  abroad,  of  course  there  is  no 
equalization  necessary.  It  is  only  necessary  where,  in  the  judgment 
of  the  shipping  board,  it  is  wise  and  desirable  to  have  those  vessels 
built  on  this  side.  The  whole  matter  is  discretionary  and  practically 
left  to  the  shipping  board.  If  the  vessel  is  bought  abroad,  of  course 
it  would  come  in  under  the  act  you  have  just  mentioned. 

The  Chairman.  Is  it  your  intention  that  a  subsidy  should  be  paid 
by  the  Grovernment  on  vessels  in  the  coastwise  trade  ? 

Mr.  Bush.  No  ;  only  the  foreign  trade. 

Mr.  EowE.  On  shij^s  used  in  the  foreign  trade  ? 

Mr.  Busii.  Only  on  ships  used  in  the  foreign  trade. 

Mr.  KowE.  I  mean  in  the  matter  of  construction. 

Mr.  Bush.  Yes. 

The  Chairman.  If  the  laws  remain  unamended  would  the  ship- 
ping board  in  any  event  be  justified  in  paying  the  difference  in  the 
cost  of  construction  here  and  abroad  when  the  American  citizen  has 
the  privilege  of  purchasing  his  ship  abroad  if  he  can  buy  it  at  a  less 
price  ? 

Mr.  Bush.  Only  if  in  the  judgment  of  the  board  it  is  to  the  inter- 
ests of  this  country  to  have  ships  built  in  our  shipyards. 

The  Chairman.  On  what  basis  would  you  think  we  would  be  justi- 
fied in  paying  the  difference  in  the  cost  of  construction  of  a  ship 
built  here  and  abroad,  as  a  subsidy,  because  in  the  fancy  of  some 
men  he  might  want  to  build  a  ship  here? 

INIr.  Bush.  I  do  not  believe,  Mr.  Chairman,  you  will  ever  perma- 
nently reconstruct  the  American  merchant  marine  by  having  all  of 
your  ships  built  abroad.  I  believe  we  not  only  need  ships,  but  we 
need  them  built  in  American  shipyards  so  as  to  develop  the  Ameri- 
can shipbuilding  industry,  and  they  should  be  manned  with  Ameri- 
can crews  and  with  American  officers.  I  think  you  will  have  to  have 
those  four  elements  created  in  this  country  before  we  can  reestablish 
our  merchant  marine.  If  our  ships  are  all  to  be  built  abroad,  in 
times  of  national  danger  our  yards  will  not  be  developed  except  as 
ship  repair  yards.  I  think  we  must  take  some  steps,  if  you  are  going 
at  this  on  a  broad  and  comprehensive  basis,  not  only  to  reestablish 
our  ships  on  the  high  seas  but  to  reestablish  the  shipbuilding  in- 
dustry. Our  thought  was  not  to  make  it  mandatory  that  those  ships 
be  built  in  American  yards,  but  to  give  the  board  sufficiently  broad 
powers  so  that  when  they  are  built  on  this  side  the  difference  in  cost 
might  be  made  up  until  that  difference  is  eliminated.  We  believe 
with  the  growth  of  American  shipyards,  with  the  great  supplies  of 
ore  and  coal  in  this  country,  and  the  ability  which  Americans  have 
shown  in  countless  other  instances  to  meet  the  competition  of  for- 
eign nations  when  an  article  has  been  standardized,  that  the  differ- 
ence in  cost  will  gradually  disappear.  The  trouble  to-day  w4th 
American  shipyards  is  that  you  see  on  one  set  of  stocks  a  merchant 
steamer,  on  the  next  a  ferryboat,  on  the  next  a  towboat,  and  on  the 
next  perhaps  an  excursion  boat.  They  have,  on  the  other  side,  a 
standard  type  of  vessel  which  is  turned  out  by  one  yard,  one  after 
the  other,  on  the  same  patterns  and  where  the  cost  of  construction  is 
reduced  to  the  minimum. 


SHIPPING  BOAED^  NAVAL  AUXILIARY,  AND  MEECHANT  MARINE,      503 

AYe  have  done  a  great  many  interesting  things  in  this  country. 
AVe  have  taken  the  automobile,  which  was  invented  and  used  abroad, 
find  have  brought  it  over  here  and  standardized  it,  and  we  are  now 
exporting  to  ccnmtries  where  the  automobile  first  made  its  appear- 
ance. This  is  made  possible  through  the  use  of  American  ma- 
chinery. It  is  perhaps  difficult  to  liken  ship  construction  to  auto- 
mobile construction,  because  ships  are  a  very  much  larger  article, 
but  with  our  supply  of  coal  and  ore  and  the  ability  and  ingenuit}^ 
of  the  American  people,  which  has  been  shown  in  countless  instances 
to  be  able,  even  with  labor  cost  higher  in  this  country,  to  meet  for- 
eign competition,  we  believe,  with  a  standardized  article  and  a 
developed  shipbuilding  industry,  that  foreign  competition  can  be 
met  and  we  can  create  an  industry  which  will  not  only  build  ships 
for  ourselves,  but  which  will  build  ships  for  other  nations  of  the 
world  who  have  not  their  own  shipbuilding  facilities.  We  think 
that  this  inequality  is  temporary,  but  if  we  are  to  reestablish  our 
merchant  marine  and  are  to  have  a  shipbuilding  industry  which  will 
go  with  it.  and  which  must  go  with  it.  the  temporary  inequality 
must  be  met  by  some  measure  of  Government  aid. 

The  fourth  provision  in  our  bill  is  the  equalization  in  the  cost  of 
operating.  Now,  we  belieA'e  that  the  difference  in  cost  of  operating 
these  ships  under  such  normal  conditions  as  existed  before  the  be- 
ginning of  the  war  is  not  nearly  so  great  as  has  been  sometimes 
supposed.  It  has  been  frequently  stated  that  the  cost  of  operating 
American  ships  is  40  per  cent  greater  than  the  cost  of  operating 
foreign  ships.  If  you  figure  the  cost  on  a  percentage  basis  that 
may  be  true,  but  a  percentage  basis  is  a  very  dangerous  basis  to 
follow,  because  the  cost  varies  with  the  type  of  ship,  it  varies  with 
the  trade,  and  it  varies  with  a  great  many  other  things.  An  English 
vessel,  for  instance,  engaged  in  the  trade  between  New  York  and 
South  America,  like  the  Lamport  &  Holt  service,  must  buy  coal 
in  the  same  markets  as  the  American  vessel,  must  purchase  the  same 
engine-room  supplies  and  deck  STipplies.  and  must  buy  food  in  the 
same  markets;  and  practically  every  element  in  the  cost  of  oper- 
ating an  American  vessel  and  an  English  vessel  between  New  Y^ork 
and  South  America,  or  New  Y^ork  and  any  other  countries,  except 
wages  and  food,  is  identically  the  same  as  the  cost  of  operation  of 
an  American  vessel.  On  the  basis  of  estimates  we  have  been  able 
to  secure  (and  we  have  taken  some  pains  to  consult  with  a  great 
many  steamship  people)  the  average  difference  in  cost  of  o])erating 
an  American  vessel,  which  will  cost,  we  will  say,  $500,000  under 
normal  conditions,  such  as  existed  before  the  beginning  of  the  war, 
and  an  English  vessel  of  the  same  type,  will  be  from  $10,000  to 
$12,000  a  year.  That  is  a  high  type  of  merchant  vessel,  and  the 
difference  in  cost  of  $10,000  or  $12,000  a  year  is  not  a  very  large 
amount.  Some  people  may  say  the  American  shipowner,  from 
patriotism,  should  pay  that  difference.  But  if  you  consider  that 
vessels  are  usually  not  operated  as  single  units,  but  are  operated  in 
fleets,  and  if  you  take  a  fleet  of  20  or  30  vessels  you  will  find  that 
the  difference  per  vear  in  the  operation  of  such  a  fleet  will  amount 
to  from  $200,000  to  $300,000.  And  that  is  a  very  considerable  sum. 
Unless  there  is  some  distinct  advantage  to  be  gained  by  operating 
those  ships  under  the  American  flag,  such  as  there  is  at  the  present 


504      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

time,  there  is  no  sufficient  reason  why  the  owner  of  a  steamship 
should  place  his  vessel  under  the  American  flag  when  he  can  obtain 
equal  advantages  under  the  English  flag  and  make  an  annual  sav- 
ing of  from  $10,000  to  $12,000  a  year  on  each  vessel  which  he 
operates. 

These  four  main  principles  are  the  foundation  of  our  suggestion-: 
First,  the  board;  second,  the  power  of  the  Postmaster  General  to 
reduce  speed  where,  in  his  judgment,  the  public  welfare  is  served  by 
a  lesser  speed:  third,  a  temporary  equalization  of  the  cost  of  con- 
struction; and,  fourth,  the  equalization  of  the  operating  costs. 

We  do  not  suggest  that  this  thing  go  on  for  all  time,  but  for  a 
limited  period.  We  suggest  that  during  10  years'  time  contracts  may 
be  made  to  cover  a  period  of  20  years.  The  reason  we  suggest  the 
10  years  is  because  Ave  believe  within  that  time  a  very  substantial 
start  will  be  made,  or  more  than  a  start  can  be  made,  in  the  recon- 
struction of  the  American  merchant  marine.  AVe  suggest  that  the 
contracts  run  for  20  years  because  that  is  usually  considered  to  be 
the  average  life  of  a  vessel.  And  we  think  that  anyone  who  con- 
structs a  vessel  under  this  act  should  be  entitled  to  equalization  of 
the  operating  differences  for  the  life  of  that  vessel — 20  years.  Under 
this  act  the  last  contract  will  expire  within  30  years  from  the  enact- 
ment of  the  law. 

I  also  call  your  attention  to  the  fact  that  nothing  can  be  done  under 
the  bill  without  the  approval  of  the  Federal  Shipping  Board  acting 
in  the  public  interests.  It  is  not  possible  for  a  man  to  come  forward 
and  say,  "This  is  my  plan:  I  want  to  build  these  ships  and  to  place 
them  in  a  certain  trade."  Unless  he  first  goes  to  the  shipping  board 
and  submits  his  plans  and  obtains  approval  of  the  character  of  the 
service  in  which  the  ships  are  to  be  placed,  he  would  not  be  entitled 
to  the  benefits  of  the  act.  The  public  interests  are  safeguarded  by 
this  board  appointed  to  protect  the  public  Avelfare.  We  submit  that 
a  bill  along  these  lines  does  not  afford  a  subsidy  which  will  guarantee 
a  profit  to  the  American  steamship  owners. 

The  gentleman  who  spoke  here  this  morning  picked  out  that  clause 
m  our  bill  and  said  that  it  was  contradictory  to  our  plan  to  provide 
an  equalization  subvention.  Our  statement  is.  It  does  not  provide  a 
subsidy  which  will  guarantee  a  profit.  We  do  not  believe  the  Ameri- 
can people  wish  to  have  steamship  men  giiaranteed  a  profit.  We  do 
not  believe  he  is  entitled  to  be  guaranteed  a  profit.  What  we  do  be- 
lieve is  that  the  spirit  of  the  American  people  is  in  accord  with  plac- 
ing the  American  steamship  oAvner  upon  an  equalit}^,  simply  an 
equality,  with  the  foreign  steamship  owner;  and  the  plan  Avhich 
Ave  outline  does  not  offer  him  any  profit;  it  merely  places  him.  as 
we  believe  he  is  entitled  to  be  placed,  on  an  equality  with  his  for- 
eign competitor.  It  substitutes  Government  cooperation  for  Gov- 
ernment competition.  We  believe  that  is  the  true  function  of  Gov- 
ernment, to  cooperate  and  aid  and  encourage  private  enterprise,  and 
it  merely  places  the  oAvner.  as  I  haA'e  stated,  upon  an  equality  with 
the  foreign  competitor.  And.  if  this  be  done,  we  think  the  courage 
and  enterprise  of  the  American  people  Avill  be  aroused  and  a  sub- 
stantial American  merchant  marine  Avill  be  created. 

We  submit  the  bill  as  the  result  of  a  great  deal  of  labor  and  a 
great  deal  of  thought  by  men  in  New  York  Avho  have  given  most  of 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      505 

their  lives  to  business  matters  connected  with  shippino-  and  the 
export  of  merchandise.  AVe  have  also  provided  in  the  bill  that  the 
vessels  may  be  taken  over  by  the  Government  in  time  of  need. 

I  want  to  say  one  word  about  the  construction  of  (Tovernment  sup- 
ply ships,  or  colliers.  I  do  not  believe  the  sentiment  of  the  business 
community  of  New  York  or  any  other  part  of  the  country  is  against 
the  theory  of  the  Government  constructing  all  the  vessels  which  are 
needed  by  the  Government  as  colliers  or  supply  ships  for  naval  pur- 
poses or  for  military  purposes.  We  recognize  that  as  a  definite  need 
of  the  Government,  and  I  think  it  will  be  very  strange  and  very 
foolish  if  business  men  object  to  that  proposition.  If  the  present 
bill  can  be  so  changed  that  the  money  to  be  appropriated,  the 
$50,000,000,  be  expended  merely  in  the  construction  of  auxiliary 
vessels  for  the  Navy  or  supply  vessels,  and  those  vessels  be  XDut 
up  and  leased  to  the  highest  bidder,  we  believe  they  can  be  leased 
readily  two  or  three  at  a  time.  There  will  be  sufficient  competition 
in  this  country  of  100.000,000  people  to  entirely  prevent  any  possi- 
bility of  any  combination  of  steamship  owners  controlling  the  rates 
which  will  be  paid.  The  competition  will  be  sufficient  to  secure  an 
adequate  return.  I  do  not  think  the  sentiment  of  the  country  is  at 
all  against  the  theory  of  building  such  vessels  as  the  Government 
needs,  pro\iding  they  are  built  to  be  reasonably  useful  for  commer- 
cial purposes,  and  to  allow  the  Government  to  own  them  and  lease 
them  to  the  highest  bidders.  We  believe  such  a  plan  will  take  awav 
the  fear  in  the  minds  of  those  interested  in  the  private  ownership 
and  private  operation  of  vessels,  and  in  the  construction  of  American 
yards  and  of  the  American  investor,  that  he  is  going  to  buy  into  an 
enterprise  or  purchase  American  securities  upon  steamship  property, 
that  ultimately  will  get  into  greater  and  greater  competition  with 
the  Government's  ownership  through  the  taxing  power.  It  is  that 
fundamental  thought  which  we  can  not  iiet  away  from,  considering 
it  as  we  have  from  all  angles,  that  with  all  the  good  will  and  all 
the  good  intentions  that  this  committee  have  in  framing  the  present 
Alexander  shipping  bill,  the  result  of  the  passage  of  that  bill  will  be 
that  it  will  do  more  harm  than  good,  and  that  it  will  prevent  the 
construction  of  more  ships  than  it  will  bring  into  use,  and  that  the 
net  result  will  be  a  decrease  and  not  an  increase  of  ships  available 
for  the  American  commerce. 

I  have  finished,  Mr.  Chairman,  the  statement  which  I  desire  to 
make.  And,  as  I  stated  very  briefly  before  luncheon,  we  have  divided 
our  presentation  into  four  sections.  Mr.  Franklin  is  to  speak  from 
the  standpoint  of  the  steamship  situation  generally.  Mr.  Strauss  has 
already  spoken  from  the  standpoint  of  the  banker's  experience  in  dis- 
tributing American  securities.  Mr.  Luckenbach  will  speak  from  the 
viewpoint  of  the  coastwise  lines.  And  we  have  other  gentlemen  here 
who  will  speak  from  the  standpoint  of  the  shippers  themselves,  in- 
terested in  the  shipping  of  our  goods  abroad.  If  there  are  no  ques- 
tions which  the  gentlemen  of  the  committee  care  to  ask,  I  would  like 
to  have  Mr,  Franklin  follow  me  with  his  statement. 

May  I  say  just  this  one  thing  more:  The  delegations  which  have 
sometimes  come  down  here  from  New  York  to  speak  upon  merchant- 
marine  matters  have  sometimes  been  criticized  because  they  were 
composed  of  representatives  of  foreign  steamship  companies.    I  was 


506     SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

conscious  of  that  and  suggested  when  this  delegation  was  composed 
that  we  limit  our  delegation  to  men  who  were  identified  wdth  lines 
under  the  American  flag  and  to  American  shippers;  and  we  have 
made  this  delegation  as  nearly  American  as  possible.  You  recognize, 
of  course,  that  it  is  extremely  difficult  to  find  men  in  New  York,  San 
Francisco,  or  any  seaport  who  are  identified  exclusively  with  the 
American  trade,  unless  it  be  the  coastwise  trade.  Some  of  the  gentle- 
men who  have  come  with  us  to-day  are  identified  partially  with  the 
American  trade  and  partially  with  foreign  vessels. 

Mr.  Franklin  is  vice  president  of  the  International  Merchant  Ma- 
rine, which  is  the  largest  American  steamship  company,  and  while 
he  has  a  great  number  of  foreign  vessels  under  the  ownership  of 
that  company  he  has  also  some  of  our  very  best  American  vessels. 

Are  there  any  questions? 

The  Chairman.  Yes :  I  would  like  to  ask  you  a  few  questions.  You 
say  you  are  opposed  to  the  principle  of  Government  ownership.  Am 
I  correct  in  that? 

Mr.  Bush.  We  are;  yes. 

The  Chairman,  Were  you  a  member  of  the  committee  that  came 
over  from  New  York  in  1914  and  wanted  the  Government  to  go  into 
the  insurance  business? 

Mr.  Bush.  No;  I  was  not. 

The  Chairman.  I  remember  Mr.  Seth  Low  was,  and  representa- 
tives of  the  New  York  Chamber  of  Commerce  and  other  organizations 
represented  here  to-day  were  here  reflecting  their  sentiment  in  the 
matter  of  organizing  a  war-risk  bureau  in  the  Treasury  Department. 
I  assume  you  will  agree  with  me  that  that  would  be  a  departure  from 
youv  objection  to  the  Government  going  into  business?  It  would  be, 
in  other  words,  just  as  proper  for  the  Government  to  go  into  the 
steamship  business  as  into  the  insurance  business. 

Mr.  Bush.  No;  the  insiu-ance  proposition  was  an  emergency  propo- 
sition.   The  war  had  been  started. 

The  Chairman.  But,  then,  the  principle  does  not  change,  does  it? 

Mr.  Bush.  There  is  a  principle  wdiich  may  be  applicable  to  an 
emergency  measure  Avhich  is  entirely  improper  for  the  permanent 
reconstruction  of  an  industry  in  this  country.  We  believe  that  very 
little,  practically  nothing,  can  be  done  to  bring  shipping  relief  in  the 
emergency  situation.  We  believe  that  the  American  yards  are  full. 
There  are  1,000,000  tons,  as  you  stated  this  morning,  under  con- 
struction, and  everything  is  being  done  that  is  possible  to  be  done. 
We  believe  the  important  consideration  is  that  some  step  should  be 
taken  by  the  Government  to  encourage  the  development  of  a  mer- 
chant mai'ine  under  private  ownership,  so  that  the  American  owner 
can  look  ahead  to  a  period  of  years  where  he  can  see  encouragement 
and  cooperation  and  not  competition;  that,  as  a  permanent  proposi- 
tion along  those  lines,  we  are  absolutely  opposed  to  the  principle  of 
Government  ownership.  To  the  principle  of  the  Government  helping 
out  in  an  emergency  we  are  not  opposed. 

The  Chairman.  This  is  the  way  it  has  occurred  to  me — I  may  be 
wrong  about  it — that  in  that  emergency  you  were  willing  to  waive 
the  question  of  the  Government  going  into  the  insurance  business 
because  there  were  no  American  companies  ready  to  write  war-risk 
insurance ;  but  when  the  Government  undertakes  here  an  initial  step 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MEECHANT  MARIxVE.      507 

to  deA'elop  the  American  merchant  marine,  in  the  interests  of  all  of 
the  people,  imfortiinately  it  comes  into  competition  with  private  in- 
terests and  with  established  lines  that  are  afraid  of  competition  by 
the  Government.  And  it  appears  to  me  that  it  is  not  the  principle 
that  is  in  back  of  this  opposition,  but  it  is  the  conflict  of  views.  That 
is  the  way  it  looks  to  me. 

Mr.  Bush.  That  is  not  my  point  of  view,  Mr.  Chairman. 

The  Chairman.  I  may  be  entirely  wrong  myself,  but  that  is  the 
way  it  seems  to  me. 

Mr.  Bush.  My  point  of  view  is,  and  it  is  our  profound  belief  that 
the  introduction  of  the  principle  of  Government  ownership,  instead 
of  increasing  the  number  of  ships  which  will  be  brought  to  the 
service  of  the  American  commerce  and  industry  will  decrease  the 
number  of  ships,  and  for  that  reason  we  are  against  it.  In  the  insur- 
ance proposition  there  was  practically  no  available  insurance  at  that 
time,  and  it  was  an  emergency  which  it  was  quite  proper  for  the  Gov- 
ernment to  meet.  The  Governments  of  other  nations  had  done  the 
same  thing,  under  the  same  conditions  and  at  the  same  time.  I  think 
the  principles  are  absolutely  different. 

The  Chairman.  I  think  the  principle  is  the  same,  but  the  occasion 
of  invoking  it  may  be  different.  Of  course,  in  response  to  that  same 
demand  we  passed  the  ship-registry  act.  I  was  the  author  of  the  pro- 
vision in  the  Panama  Canal  act  providing  for  the  admission  of  for- 
eign-built ships  to  American  registry  if  not  more  than  five  years  old, 
and  Avhen  the  ship-registry  act  removed  that  provision  and  also  gave 
the  President  power  to  suspend  the  provisions  of  existing  law  with 
reference  to  the  watch  officers  on  those  ships,  that  was  also  in  response 
to  the  demand  on  the  part  of  business  interests  of  Xew  York,  showing 
that  there  has  been  quite  a  desire  on  our  part  to  respond  to  every 
reasonable  suggestion  made  by  the  Chamber  of  Commerce  of  New 
York  and  other  business  interests  of  New^  York.  And  we  were  con- 
scious, at  the  same  time,  that  Avhen  we  were  projecting  a  measure  in 
the  interests  of  all  of  the  people  we  would  run  up  against  certain 
private  interests. 

Would  your  organization  be  willing  to  support  this  bill  if  there 
is  a  limitation  placed  in  section  8,  under  which  the  Government  might 
operate  ships?  I  want  to  get  your  viewpoint.  I  Avant  to  know  if  you 
are  so  opposed  to  this  proposition  that  you  would  rather  all  legisla- 
tion should  fail  unless  you  can  get  your  bill  enacted  into  law?  Sup- 
pose 3^ou  fix  it  at  10  years,  a  reasonable  time.  I  do  not  want  Govern- 
ment-owned shipping  and  control — that  is.  the  management  of 
ships — any  more  than  you  do. 

Mr.  Bush.  I  think,  as  I  attempted  to  say  before,  that  the  sentiment 
of  the  business  community  of  New  York  and  of  all  parts  of  the 
country  will  agree  to  the  construction  of  any  number  of  ships,  whether 
it  is  oO  or  whether  it  is  150,  that  the  Government  may  require  for  its 
own  naval  or  military  service;  and  I  think  that  is  an  entirely  sen- 
sible and  sound  proposition.  When  these  ships  have  been  con- 
structed we  do  not  think  that  even  the  threat  or  power  to  bring  them 
into  competition  with  private  effort  should  be  permitted.  Our 
thought  is  that  the  mere  threat  of  a  possibility  of  Government  com- 
petition will  so  impress  the  investor  of  this  country  that  it  will  make 
it  impossible  for  the  steamship  men  of  New  York  or  anv  other  citv  to 


508      SHIPPING  BOARD.  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

get  the  necessary  funds  to  go  into  the  steamship  business,  and  the 
ultimate  result  will  be  that  the  shipper  of  the  country  instead  of 
being  supplied  with  additional  tonnage  will  be  prevented  from  get- 
ting tonnage  which  would  ordinarily  come  to  their  service. 

The  Chairman.  Mr.  Bush,  suppose  section  8  were  stricken  out 
of, this  bill  and  the  shipping  board  would  build  or  purchase  ships 
and  offer  them  for  charter,  what  power  Avould  there  be  in  this  board 
to  compel  a  rate  that  would  be  reasonable  and  avoid  loss  to  the  Gov- 
ernment unless  in  some  form  the  power  is  reserved,  as  in  section  8 
or  in  some  other  way  ? 

Mr.  Bush.  The  power,  I  think,  which  would  come  to  the  service 
of  the  Government  is  the  ordinary  powder  of  business  competition. 
Under  an  appro]:)riation  of  $50,000,000  you  can  not  build  more  than 
50  serviceable  ships.  It  is  inconceivable  to  me,  and  it  is  inconceivable 
to  our  organization,  that  if  50  ships  be  constructed,  all  American 
ships,  and  are  offered  under  charter  to  the  highest  bidder— not  50 
at  one  time,  but  two  or  three  at  a  time,  as  the  case  may  be — that  in 
a  country  with  100,000,000  people,  with  6,800,000  tons  of  tonnage  in 
the  coastwise  trade  and  with  the  constant  demand  for  tonnage  in 
the  coastwise  trade,  there  will  not  be  many  competitors  for  those 
ships,  and  that  the  (lovernment  will  receive  not  a  low  return,  but 
even  in  normal  conditions  a  very  fair  returii  upon  their  ships,  pro- 
viding they  are  built  in  such  Avay  as  to  be  commercially  useful.  If 
the}'^  are  built  as  colliers  with  all  the  ornamental  machinery  for 
handling  coal,  they  would  not  be  a  business  proposition,  but  it  is 
perfectly  possible  to  have  ships  constructed  in  such  a  way  that  they 
can  be  converted  into  merchant  ships  or  auxiliary  vessels  I  am  in- 
formed by  competent  people;  and  if  that  is  so,  I  believe  the  Govern- 
ment would  be  amply  protected  by  the  ordinary  competitive  con- 
ditions in  their  use. 

The  Chairman.  Then,  as  I  understand,  you  say  if  this  $50,000,000 
w^as  invested  in  the  construction  of  ships  by  the  shipping  board  that 
there  Avould  be  no  trouble  to  charter  them  to  private  persons,  firms, 
or  corporations  at  a  rate  that  would  protect  the  Government,  provide 
for  insurance,  depreciation,  etc. 

Mr.  Bush.  I  think  even  under  normal  conditions,  considering  the 
lovv-  rate  of  interest  for  which  the  Government  can  get  its  money,  that 
there  will  be  no  difficulty  in  getting  a  return  for  the  use  of  those 
ships  which  will  protect  the  Government. 

The  Chairman,  You  think  there  will  be  a  healthy  demand.  Then, 
if  that  is  true,  do  you  not  think  it  desirable  to  enact  this  bill  into 
laAv  if  section  8  is  stricken  out? 

Mr.  Bush,  No;  I  believe  the  mere  inclusion 

The  Chairman,  I  say  if  it  is  stricken  out. 

Mr.  Bush,  I  have  read  the  bill  with  a  great  deal  of  care  more 
than  once,  but  I  would  not  like  to  say  without  further  careful  con- 
sideration. 

The  Chairman.  That  is  the  section  which  provides  for  the  crea- 
tion of  a  corporation,  and,  in  a  certain  contingency,  the  operation 
of  the  ships  by  the  Government. 

Mr.  Bush.  From  my  recollection  of  the  bill— I  do  not  like  to  be 
put  on  record  as  approving  the  bill  as  a  whole — ^with  that  section 
out  and  without  going  through  it  again  more  carefully,  it  would 
provide  merely  for  the  Government  to  build  the  ships  for  auxiliary 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      509 

purposes  and  to  offer  them  for  charter,  to  which  there  will  be  no 
objection. 

The  Chairman.   Those  provisions  are  incorporated  in  section  8? 

Mr.  Bush.  Yes;  that  is  my  remembrance,  although  I  am  speak- 
ing entirely  from  recollection. 

The  Chairman.  I  will  read  it,  so  that  there  will  be  no  mistake 
about  it : 

Skc.  8.  That  the  board  hereby  created,  if  in  its  judgment  siich  action  is  neces- 
sary to  carry  out  the  purposes  of  this  act,  may  form  under  the  hiws  of  the  United 
States,  or  of  tlie  District  of  Columl)ia,  a  corporation  or  corporations  witli  capital 
stoclv  in  sucli  amount  as  the  board  may  prescribe,  sucli  capital  stoclv,  liowever,  to 
be  within  the  limits  of  the  appropriations  made  by  this  act,  whose  object  shall  be 
the  purchase,  construction,  equipment,  maintenance,  and  operation  of  merchant 
vessels  in  the  commerce  of  the  United  States  and  with  foreign  countries  and 
with  Alaska,  the  Panama  Canal  Zone,  the  Philippine  Islands,  the  Hawaiian 
Islands,  or  the  islands  of  Porto  Rico,  Guam,  and  Tutuila,  and  the  chartering  or 
leasing  of  vessels  for  such  purposes  and  for  and  on  behalf  of  the  United  States, 
may  subscribe  to  and  purchase  not  less  than  a  majority  of  the  capital  stock  of 
such  corporation  or  corporations. 

Mr.  Bush.  In  principle,  with  the  elimination  of  that  section,  and 
with  the  elimination  of  the  sections  controlling  the  rates  and  the 
licensing  of  ships,  as  I  recollect  the  bill,  I  think  we  would  agree. 

Mr.  Byrnes.  You  do  not  think  that  the  Government  ought, 
through  this  board,  in  any  way  to  control  the  rates  or  regulate  them  ? 

Mr.  Bush.  We  believe  that  it  would  be  desirable  if  the  Govern- 
ment could  regulate  rates  in  the  interests  of  the  shipper  and,  at  the 
same  time,  assure  the  shippers  that  they  will  be  placed  at  no  disad- 
vantage with  the  shippers  of  foreign  nations.  We  believe  that  it  is 
an  exceedingly  dangerous  principle. 

Mr.  Byrnes.  Some  witness  here  the  other  day  testified  that  the 
rates  on  every  line  had  been  increased  from  100  to  as  high  as  about 
1,000  per  cent,  I  think,  with  the  exception  of  the  Panama  Steamship 
Line,  upon  which  line  the  rates  had  not  been  increased. 

The  Chairman.  Not  only  on  that  line,  but  the  rates  have  not  been 
increased  from  New  York  to  Panama  by  any  line. 

Mr.  Byrnes.  From  New  York  to  Colon  ? 

The  Chairman.  I  mean  to  Colon. 

Mr.  Byrnes.  To  which  port  the  Panama  Steamship  Line  goes. 
Do  you  not  think  that  the  regulation  by  the  Government  in  that 
instance,  merely  by  having  this  line  in  operation,  has  contributed  to 
the  welfare  of  the  shippers  of  the  country? 

Mr.  Bush.  I  do  not  think  that  was  the  controlling  influence;  I 
think  the  controlling  influence  was  the  overland  rail  lines.  I  do  not 
think  that  the  comparatively  insignificant  operations  of  the  Panama 
Steamship  Line,  when  we  consider  the  vast  tonnage  between  the  east 
and  west  coasts,  was  the  controlling  influence.  I  think  the  lines 
operating  between  the  east  and  w^est  coasts  compelled  them  to  keep 
the  rates  down,  because  if  they  did  not  keep  them  down  the  goods 
could  be  moved  overland  by  rail.  I  think  that  was  the  controlling 
influence.     I  think  it  was  competition  that  did  that. 

Mr.  Byrnes.  The  rates  from  here  to  Colon,  then,  were  not  increased 
because  of  the  fact  of  the  influence  of  railroad  rates  and  not  because 
of  the  existence  of  the  Panama  Steamship  Line  ? 

Mr.  Bush.  The  rates  between  here  and  Colon ;  yes. 

Mr.  Byrnes.  That  is  all  I  stated. 

32910—16 33 


510      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Bush.  The  question.  I  think,  raised  by  the  chairman  was  the 
rates  between  the  east  and  the  west  coasts. 

Mr.  Byrnes.  The  statement  that  he  made  was  to  Colon.  Do  you 
think  that  the  fact  that  the  Panama  Line  was  in  operation  had 
nothing  to  do  with  that? 

Mr.  Bush.  No;  I  do  not  say  that.  I  say  the  shipments  to  Colon 
are  insignificant,  and  that  the  Government's  operations  there  were 
a  sufficient  regulating  force.  I  think  the  Government  program  of 
$50,000,000  for  the  construction  of  vessels  to  regulate  the  rates  of 
the  world  when  Great  Britain  alone  has  between  4,000  and  5,000 
ships  engaged  in  foreign  trade  under  normal  conditions — I  think 
the  program  of  $50,000,000  entirely  inadequate  to  do  the  same  thing 
which  the  Panama  Canal  Line  operating  between  Xew  York  and 
a  comparative!}^  insignificant  port  like  Colon  did  do. 

Mr.  Byrnes.  Do  you  believe  there  should  be  no  regulation  by  any 
board  or  commission? 

Mr.  Bush.  I  believe  it  is  a  very  dangerous  program. 

Mr.  Byrnes.  Do  you  think  it  is  dangerous  for  the  railroads  to  be 
regulated  by  the  Interstate  Commerce  Commission  ? 

Mr.  Bush.  I  think  that  is  an  entirely  different  proposition,  be- 
cause there  3'ou  have  the  entire  control  of  the  railroads  under  the 
American  Government.  In  the  operation  of  ships  you  can  not  bring 
the  world's  shipping  under  the  control  of  the  American  Government. 
And  if  you  create  conditions  here  which  make  it  more  costly  to 
operate  ships  to  and  from  American  ports,  the  shipowner  is  quite 
different  from  the  railroad.  The  Pennsylvania  Railroad,  for  in- 
stance, can  not  tear  up  its  tracks  and  move  its  operations  to  some 
other  sphere  of  influence;  it  must  haul  freight  between  New  York 
and  Chicago  whether  the  rates  are  profitable  or  not.  The  steamship 
owner,  if  you  create  conditions  which  make  it  unprofitable  for  the 
ships  to  operate  in  the  American  trade,  can  go  into  any  trade  in  the 
world,  and  the  result  will  be  the  ships  may  go  to  other  trades  an'd 
the  shippers  of  this  country  will  pay  the  price. 

Mr.  Byrnes.  That  is  based  on  the  assumption  that  a  shipping 
board,  having  at  heart  the  development  of  an  American  merchant 
marine,  would  create  conditions  that  would  be  burdensome? 

Mr.  Bush.  If  you  put  into  the  mind  of  the  marine  investor  that  if 
he  invests  in  privately-owned  ship  securities  he  is  going  ultimately 
to  meet  with  the  competition  of  the  Government,  you  are  going  to 
prevent  the  American  investors  from  coming  to  the  relief  of  the 
shippers  and  providing  ships.  As  an  illustration  I  would  like  to 
cite  my  own  experience  in  a  case  which  I  think  is  parallel.  The 
Bush  Terminal  Co.  is  interested,  among  other  things,  in  a  series  of 
piers.  We  started  to  build  quite  a  series  of  piers,  and  our  plan  was 
to  go  on  and  construct  a  great  many  more.  At  that  time  the  city 
of  New  York  was  building  piers  on  Manhattan  Island  for  the  ac- 
commodation of  passenger  lines.  Just  about  the  time  we  finished 
our  present  construction  the  city  of  New  York  went  down  and 
bought  quite  an  amount  of  territory  near  us  and  commenced  the 
policy  of  building  piers  for  the  accommodation  of  freight  vessels. 
At  that  time  I  had  under  contract  quite  a  large  amount  of  other 
property  in  New  York  where  I  intended  to  build  other  piers,  and 
I  had  paid  money  down  on  the  purchase  of  the  property.  I  can- 
celled my  contract  and  stopped  pier  construction.     That  may  have 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      511 

been  my  own  individual  action,  but  all  over  the  harbor  there  have 
been  practically  no  piers  constructed  by  private  pier  owners  since 
the  time  when  the  government  of  the  city  of  New  York  commenced 
the  policy  to  build  piers  to  take  care  of  freight  commerce.  The  city 
of  Xew  York  has  not  been  able  to  meet  the  need  successfully.  It  has 
spent  vast  sums  of  money  for  the  building  of  subways,  and  it  has 
not  been  in  a  financial  position,  and  other  things  have  come  up  to 
divert  the  interest  of  the  officials  of  New  York  from  the  construction 


city  of  JSew  lork  is  now  building  three  piers 
lyn,  with  that  exception  their  entire  construction  program  has  been 
the  reconstruction  of  old  piers  in  New  York  and  the  turning  of 
three  or  four  old  piers  into  one  larger  pier.  But  that  has  not  added 
anything  to  the  accommodations  for  shipping.  The  result  has  been 
that  private  pier  construction  has  stopped;  I  have  stopped  and 
every  other  i)ier  owner  in  Xew  York  has  stopped  building,  while  the 
commerce  in  New  York  has  grown,  and,  very  much  to  my  surprise, 
I  find  I  have  benefited,  because  the  money  which  can  be  derived  from 
piers  has  been  increasing  by  leaps  and  bounds  for  the  reason  that 
no  one  can  provide  enough  capacity.  The  result  is  that  the  com- 
merce of  New  York  and  the  commerce  of  this  country  is  bearing  the 
burden  of  paying  the  increased  price  of  piers.  Pier  rents  would  not 
have  increased  so  greatly  if  a  normal  construction  program  under 
private  ownership  had  gon  on.  I  think  that  is  a  reasonably  parallel 
case  wiiere  the  same  principle  is  involved. 

The  city  of  New  York  has  done  very  little,  and  the  construction 
of  vessels  under  the  administration  bill  would  do  very  little;  but  the 
mere  fear  put  into  the  minds  of  the  private  pier  owners  that  they 
can  not  compete  with  the  taxing  power  has  paralyzed  pier  con- 
struction in  New  York,  and  the  commerce  of  New  York  has  suffered 
because  of  that  fact.  And  I  believe  the  same  thing  would  result  if 
you  put  into  the  minds  of  the  American  investors  that  they  must 
meet  competition  with  Government  money  if  they  buy  securities  of 
privately  owned  steamship  companies. 

Mr.  Byrnes.  You  say  the  mere  threat  would  do  it,  and  I  there- 
fore conclude  in  your  opinion  that  the  investors  wdio  are  now  build- 
ing this  unusual  number  of  ships  in  this  country  do  not  even  con- 
sider the  introduction  of  this  bill,  with  the  backing  of  the  adminis- 
tration, as  a  threat  that  it  will  be  passed.    Is  that  it? 

Mr.  Bush.  No.  sir;  I  did  not  consider  that.  I  consider  that  the 
construction  program  which  is  now  going  on  is,  as  Mr.  Fahey  has 
stated,  in  most  cases  the  building  of  tonnage  absolutely  required  by 
established  services.  There  have  been  very  few  new  services  estab- 
lished, except  such  as  stated  here  to-day  by  Mr.  Gibboney,  which 
were  purely  a  speculative  development  because  of  war  conditions 
and  the  unusual  profits  which  are  offering.  Certain  lines  which  have 
established  services,  which  need  additional  vessels,  are  building  those 
vessels,  but  I  do  not  know  of  any  large  construction  program  or  of 
any  plant  which  is  in  process  of  being  enlarged. 

_Mr.  Bruckner.  Do  you  think  if  New  York  City  had  built  those 
piers  which  you  state  that  your  rates  would  have  been  cheapened  ? 
Mr.  Bush.  If  New  York  City  had  built  the  piers? 


512      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Bruckner.  Yes;  the  piers  that  they  contemplated  building. 
In  other  words,  do  you  think  private  capital  could  not  compete  with 
New  York  City? 

Mr.  Bush.  I  do  not  think  for  a  moment  that  private  capital  would 
attempt  to  compete  with  New  York  City. 

Mr.  Bruckner.  How  about  municipal  ferry  of  New  York  City? 

Mr.  Bush.  The  operation  of  the  municipal  ferry  in  New  York  is 
a  perfect  illustration.  It  was  started  for  Staten  Island  and  South 
Brooklyn — those  territories  which  could  not  be  served  by  subAvays — 
but  the  result  has  been  that  the  several  lines  of  the  Union  Ferry  Co. 
have  been  taken  off  because  they  feared  the  competition  of  public 
money.  And  the  communities  and  water  fronts  which  were  formerly 
served  by  those  ferries  are  now  without  a  service.  That  is  another 
exact  illustration  of  the  point  which  I  make. 

The  Chairman,  In  my  judgment  the  people  of  New  York  will 
never  come  into  their  own  until  they  can  own  the  terminals  there. 

Mr.  Bruckner.  And  then  they  will  not  get  half  of  what  they  are 
entitled  to,  Mr.  Chairman. 

Mr.  Bush.  But  you  have  here  an  entirely  diiferent  proposition.  I 
am  not  standing  here  as  a  shipper,  for  I  think  the  only  reason  I  was 
appointed  chairman  of  this  committee  is  that  I  have  no  financial 
interest  in  vessel  property ;  I  have  not  a  dollar  invested  in  steamship 
lines,  but  I  am  immediately  brought  in  contact  with  them.  If  I 
were  standing  here  as  a  shipper,  and  you  said  the  United  States 
Government  might  supply  all  the  ships  necessary,  running  up  to 
several  billions  of  dollars,  I  might  say,  without  any  regard  to  my 
interests  as  a  citizen  and  a  taxpayer,  that  such  an  investment  might 
meet  the  requirements.  The  fundamental  objection,  it  seems  to  me, 
is  that  you  start  out  to  do  a  big  thing  and  you  do  a  little  thing.  You 
start  out  to  revive  the  American  merchant  marine  and  3"ou  build 
$50,000,000  worth  of  ships,  which  would  be  a  fly  spot  on  the  map. 

The  Chairman.  Would  you  favor  this  bill  if  it  were  increased  to  a 
billion  dollars?  Is  it  the  amount  to  which  3'ou  object  which  we 
propose  to  invest  at  the  start  ? 

Mr.  Bush.  I  am  personally  opposed  to  the  principle  of  bringing 
the  Government  into  competition  with  private  effort.  I  do  not  believe 
that  that  is  the  function  of  the  Government.  I  think  the  function 
of  the  Government  is  cooperation  with  private  effort.  But,  as  I  have 
stated,  if  I  w^ere  speaking  from  the  standpoint  of  a  shipper  without 
any  regard  to  my  interest  as  a  citizen  and  a  taxpayer,  I  would  say  my 
interests  would  be  fully  served  whether  by  a  Government-owned  ship 
or  a  private-owned  ship;  but  I  would  not  want  the  Government  to 
go  into  a  competition  which  would  deprive  me  of  the  services  of 
privately  owned  ships  and  then  not  fully  supply  my  needs. 

The  Chairman.  In  the  ballot  No.  2  in  the  referendum,  the  number 
of  votes  given  on  the  establishment  of  a  merchant  marine 

Mr.  Bush.  I  am  not  speaking  for  that  chamber;  I  am  speaking 
for  the  Chamber  of  Commerce  of  New  York. 

The  Chairman.  I  know,  but  I  am  wondering  how  jour  chamber  of 
commerce  would  stand  on  this  proposition : 

The  committee  recommends  the  creation  of  a  Federal  shipping 
board  to  investigate  and  report  to  Congress  concerning  the  naviga- 
tion laws,  and  to  have  full  jurisdiction,  under  the  law,  in  all  matters 
pertaining  to  overseas  transportation. 


SHIPPING  BOAED,  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE.      513 

The  vote  was  639  in  favor  of  the  recommendation  and  116  votes 
opposed. 

Mr.  Bush.  I  do  not  Imow  how  our  chamber  voted  upon  that  refer- 
endum ;  but  I  do  know  the  chamber  has  voted  in  favor  of  a  shipping 
board.  And  it  is  a  part  of  our  bill.  I  do  not  think  that  we  are  even 
a  member  of  that  association,  are  we? 

Mr.  Franklin.  No. 

Mr.  Bush.  But  our  own  bill  contains  a  provision  in  favor  of  a  ship- 
ping board. 

The  Chairman.  A  great  deal  like  our  Interstate  Commerce  Com- 
mission when  it  was  first  organized,  which  did  not  have  any  power. 
But  we  have  been  giving  it  power  during  the  last  10  or  15  years.  We 
just  thought  we  would  avoid  this  hiatus  by  starting  this  board  off 
with  power  to  exercise  control ;  and  it  must  be  exercised  wisely,  be- 
cause I  agree  with  you  that  it  is  not  practicable  for  that  board  to 
make  rates  in  the  foreign  trade,  or  anything  of  that  sort.  But  are 
you  opposed  to  this  proposition  which  was  put  up  to  the  constituent 
members  of  the  Chamber  of  Commerce  of  the  United  States : 

The  committee  recommends  tliat  there  should  be  legislation  abolishing  de- 
ferred rebates  and  providing  for  supervision  of  rates  by  the  Federal  shipping 
board,  with  requirements  for  filing  with  the  board  schedules  of  rates  and  all 
agreements  with  oversea  lines? 

Mr.  Bush.  We  are  opposed  to  a  regulation  of  rates.  We  believe 
5'ou  are  nursing  a  very  delicate  child  here;  and  we  do  not  want  to 
see  it  put  on  corsets  until  it  has  grown  up. 

The  Chairman.  The  vote  seems  to  have  been  601  in  favor  of  the 
recommendation  and  130  opposed. 

Mr.  Bush.  We  are  not  a  member  of  that  body  at  all. 

The  Chairman.  I  just  wanted  to  emphasize  at  this  point  that  your 
position  is  at  variance  with  the  great  commercial  organizations  of 
the  United  States  on  that  question. 

Mr.  Bush.  We  are  on  that  point;  3'es. 

The  Chairman.  Then  on  this  proposition : 

The  committee  recommends  that  Federal  licenses  should  be  taken  out  by  lines, 
domestic  and  foreign,  engaged  in  shipping  between  ports  of  the  United  States 
and  other  countries. 

I  understand  you  are  opposed  to  that,  and  that  you  reflect  the 
sentiment  of  the  Chamber  of  Commerce  of  New  York.  The  vote  on 
that  proposition  was  610  votes  in  favor  of  the  proposition  and  120 
votes  opposed. 

Mr.  Bush.  I  call  you  attention,  Mr.  Chairman,  to  the  fact  that  we 
have  not  expressed  an  opinion  contrary  to  that.  We  have  stated 
that  the  chamber  believes  that  the  provision  requiring  the  licensing 
of  all  vessels  trading  from  all  ports  of  the  United  States  should  not 
be  enacted  without  more  careful  study  and  a  more  complete  estimate 
of  the  probable  consequences  to  the  trade  of  this  country.  Any  pro- 
vision which  may  make  it  more  costly  or  difficult  to  operate  vessels 
from  and  to  the  ports  of  this  country  burdens  the  entire  commerce  of 
the  country. 

And  then  we  go  on  and  point  out : 

The  farmers  of  the  West,  for  instance,  must  sell  their  grain  in  competition 
with  the  growers  of  Argentina.  Any  burden  upon  shipping  from  American 
ports  which  can  not  be  equally  imposed  upon  shipping  from  Argentina  will,  in 
the  end,  be  borne  by  those  who  produce  in  this  country  the  commodities  which 
must  be  sold  abroad  in  competition  with  those  of  other  countries. 


514      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Our  statement  is  not  that  we  are  against  that;  but  we  are  against 
this  enactment  without  more  careful  study  and  more  complete  esti- 
mates of  what  it  will  probably  do,  not  so  much  to  the  steamship  men 
but  to  the  shippers  and  producers  of  the  country. 

The  Chairman.  You  understand,  of  course,  that  this  provision 
applies  to  foreign  vessels  trading  at  our  ports  the  same  as  to  Ameri- 
can vessels. 

Mr.  Bush.  Yes;  but  it  does  not  provide  for  foreign  vessels  trading 
from  competitive  ports  like  Argentine  or  India  to  England. 

The  Chairman.  You  know  a  few  years  ago  we  rejjorted  from  this 
committee  a  bill  which  provided  that  any  vessels  operating  in  viola- 
tion of  the  Sherman  antitrust  law  might  be  excluded  from  our  ports 
under  penalties.  It  was  said  if  that  bill  were  enacted  into  law  that 
those  foreign  ships  would  not  trade  from  American  ports  unless  we 
permitted  them  to  do  so  on  their  own  terms  and  in  violation  of  law. 
I  imagine  there  would  be  a  gi'eat  diminution  of  the  tonnage  of  the 
world  if  it  were  not  that  they  had  the  privilege  of  trading  to  our 
American  ports.  I  think  we  all  agree  that  these  foreign  lines  are 
supported  largely  by  their  profits  in  trading  to  American  ports. 

Mr.  Bush.  The  commerce  of  this  country  is,  of  course,  an  im- 
portant item. 

The  Chairman.  Yes;  and  I  think  they  would  rather  obey  the  law 
than  to  let  the  ships  rot. 

Mr.  Bush.  Yes. 

The  Chairman.  I  think  so. 

Mr.  Bush.  They  may  obey  the  laws,  Mr.  Chairman;  but  if  any 
burdens  are  placed  there  which  will  increase  their  cost,  that  burden 
is  going  to  be  borne  by  the  man  who  produces  things  in  this  country 
M'hich  must  be  sold  in  competition  with  other  countries. 

The  CiiAiRiNiAN.  If  this  board  is  composed  of  men  such  as  you  and 
I  think  should  compose  the  board.  I  imagine  they  would  have  due 
regard  for  the  interests  of  all  the  American  people  in  this  matter; 
and,  while  they  are  vested  with  large  powers  under  the  bill,  that  they 
would  exercise  those  powers  only  to  correct  abuses  and  not  to  impose 
hardships  upon  anybody.  That  would  be  my  conception  of  their 
duties. 

Mr.  Bush.  Might  I  point  out  one  possibility  ?  It  has  been  repeat- 
edly shown  that  the  pressure  of  public  opinion  in  this  country  is 
always  against  any  advance  in  rates,  Avhether  it  be  legitimate  or  not. 
The  pressure  of  public  opinion  was  against  any  increase  of  the  rates 
of  the  railroads  until  after  years  of  trial  it  was  brought  home  to  the 
Interstate  Commerce  Commission  and  to  the  people  that  they,  the 
people  themselves,  were  suffering  because  the  railroads  were  not 
operating  on  a  more  profitable  basis. 

Now,  if  you  will  conceive  what  Avould  very  frequently  happen  to 
be  the  case,  an  advancing  rate  market  and  the  board  had  established 
a  rate,  we  will  say,  of  $1.  through  a  shortage  of  vessels,  perhaps  due 
to  war,  or  some  other  temporary  condition,  the  world's  rates  ad- 
vanced to  a  point  where  tonnage  could  be  more  profitably  employed 
in  some  other  trade  besides  the  American  trade,  say  at  a  rate  of  $1.25 
or  $1.50.  The  question  would  then  be  with  the  steamship  owner: 
Shall  I  use  my  vessel  in  the  more  profitable  trade  or  can  I  persuade 
the  shipping  board  to  agree  to  advance  the  rate  where  it  Avill  put  me 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      515 

on  an  equality  with  other  trades?  The  pressure  of  public  opinion 
is  always  against  an  advance  of  that  kind  and  it  is  very  slow 
to  take  effect.  The  result,  in  all  probability,  would  be  that 
a  substantial  amount  of  tonnage  would  be  diverted  from  the 
American  trade,  just  as  it  has  been  diverted  from  our  coastwise 
trade.  Many  of  our  vessels  which  were  formerly  engaged  in  trade 
between  the  east  and  west  coasts  have  gone  into  the  foreign 
trade  because  they  can  now  make  more  money  there;  and  if  that 
operation  brought  about  a  condition  where  it  was  more  profitable  to 
operate  ships  in  the  foreign  trade  than  in  the  American  trade,  the 
result  would  be  that  this  country  w^ould  pay  the  cost.  That  is  one 
of  the  fears  we  have  of  a  license.  I  am  willing  to  admit  that  the 
time  will  come  when  a  certain  amount  of  Government  regulation  can 
be  judiciously  and  wisely  put  in  force,  but  to  start  regulating  an 
industry  which  you  have  not  created  and  with  very  little  experience 
here  in  this  country  as  to  what  is  a  wise  regulation,  seems  to  us  to 
be  an  unsound  proposition,  looking  at  it  strictly  as  a  business  propo- 
sition. You  should  first  get  your  merchant  marine  and  establish  it 
on  the  high  seas,  and  then  when  inequalities  dcA'elop  regulate  them, 
but  do  not  regulate  it  off  of  the  high  seas  before  you  get  it. 

The  Chairman.  That  is  where  we  made  the  blunder  with  reference 
to  the  railroads.  If  we  had  enacted  the  law  30  years  ago  vesting  in 
the  Interstate  Commerce  Commission  the  power  to  supervise  the  issu- 
ance of  stocks  and  bonds  by  the  railroad  companies,  there  w^ould  be 
no  occasion  to-day  for  an  increase  of  rates. 

Mr.  Bush.  Possibly  that  is  so,  Mr.  Chairman. 

The  Chairman.  We  do  not  want  to  lock  the  stable  door  after  the 
horse  is  stolen;  we  w^ant  the  regulation  to  go  along  with  the  up- 
building of  the  industry. 

INIr.  I3usH.  I  might  also  call  your  attention,  along  the  same  line, 
to  the  fact  that  the  practical  result  of  the  various  regulations  which 
have  been  established  by  the  Interstate  Commerce  Commission  has 
been  that  no  new  mileage  has  been  built. 

The  Chairman.  Xo;  I  do  not  think  that  is  correct.  There  has  not 
been  the  demand  for  new  mileage  that  there  was  formerly. 

Mr.  Bush.  I  think  our  great  western  country  is  suffering  because 
new  mileage  is  not  constructed.  New  mileage  has  only  been  created, 
or  largely  created,  by  established  lines  which  had  an  established  earn- 
ing power  and  which  could  sell  their  securities.  That  has  been  the 
result  of  the  situation,  though  I  prefer  not  to  be  drawn  into  a  dis- 
cussion of  it,  because  I  think  much  of  the  regulation  by  the  Inter- 
state Commerce  Commission  has  been  eminently  wise  and  successful, 
still  at  the  same  time  it  Avas  established  after  we  had  created  our 
transportation  system. 

The  Chairman.  The  difficulties  of  the  West — and  I  am  more  fa- 
miliar with  the  conditions  there  than  I  am  in  the  East — with  the  Rock 
Island,  the  Frisco,  and  these  other  lines  have  not  grown  out  of  the 
fact  that  they  did  not  have  reasonable  rates,  but  on  account  of  the 
manipulation  of  the  roads  by  stockjobbing  concerns. 

Mr.  Bush.  That  is  quite  a  different  proposition;  that  has  nothing 
to  do  with  the  proposition  under  consideration. 

Mr.  Hadley.  You  say  you  estimate  50  ships  can  be  built  for 
$50,000,000,  serviceable  and  merchantable  ships? 


516     SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Bush.  I  am  estimating  roughly  that  10,000-ton  ships  would 
cost  $100  a  ton. 

Mr.  Hadley.  Taking  that  as  a  basis,  are  jou  able  to  state,  referring 
to  the  third  provision  in  this  bill,  11865 — I  have  not  had  an  oppor- 
tunity to  read  it— in  the  matter  of  construction  the  difference  in  the 
cost  of  construction  here  and  abroad  of  a  type  of  ship  that  you  have 
in  mind— for  50  ships? 

Mr.  Bush.  I  do  not  believe  that  that  bill,  if  passed,  would  be  oper- 
ative, or  would  need  to  be  operative  at  the  present  time.  I  do  not 
believe  there  is  an}^  difference  in  the  cost  of  construction  at  the  pres- 
ent time. 

Mr.  Hadley.  I  mean  under  normal  conditions. 

Mr.  Bush.  Under  normal  conditions,  I  think,  after  the  war  it 
would  be  a  bold  man  who  would  attempt  to  prophesy  what  it  will 
be.  I  think  one  person's  opinion  would  be  as  good  as  the  opinion 
of  anybody  else;  but,  I  say,  after  our  shipbuilding  industry  de- 
velops it  is  going  to  decrease  the  cost  very  much,  and  if  we  can  build 
up  our  shipbuilding  industry  it  will  not  only  create  something  for 
building  ships  for  ourselves,  but  we  will  build  ships  for  other  nations 
of  the  world.  There  are  many  countries  who  do  not  have  ship- 
building yards  who  would  come  to  us  for  the  construction  of  their 
ships,  if  the  opportunity  offered,  at  proper  prices. 

STATEMENT  OF  MR.  P.  A.  S.  FRANKLIN,  OF  NEW  YORK,  RECEIVER 
OF  THE  INTERNATIONAL  MERCANTILE  MARINE  CO.  AND 
PRESIDENT  OF  THE  ATLANTIC  TRANSPORT  CO.,  OF  WEST 
VIRGINIA. 

Mr.  Franklin.  Mr.  Chairman  and  gentlemen,  we  are  the  owners 
and  operators  of  American-flag  steamers  as  well  as  foreign-flag 
steamers,  and  as  practical  men  in  the  shipping  business  we  would 
most  heartily  welcome  the  United  States  taking  any  action  which 
would  tend  to  reestablish  the  American  flag  on  the  high  seas  in  the 
foreign  trade  and  commerce.  The  importance  of  the  import  and  ex- 
port business  of  the  United  States  is  such  that  they  certainly  should 
liave  an  important  merchant  marine  of  their  own  to  carry  their  own 
products. 

We,  hoAvever,  feel  that  this  bill  does  not  deal  either  with  the  pres- 
ent emergency  nor  does  it  create  a  practical  policy  for  the  upbuild- 
ing of  the  American  merchant  marine  in  the  foreign  trade. 

We  also  fear  that  anything  bordering  on  Government  ownership 
or  Government  operation  will  destroy  the  incentive  of  the  individual 
and  the  corporation  to  enter  the  shipping  Inisiness. 

We  further  feel  that  the  building  up  of  an  efficient  American  mer- 
chant marine  can  not  be  done  by  the  construction  of  any  specific 
number  of  ships.  It  should  be  some  general  policy,  which  would  be 
creative  of  ships  for  general  purposes  built  in  the  United  States,  in 
order  to  gradually  reduce  the  cost  of  construction  in  the  United 
States  versus  foreign  countries. 

As  far  as  the  board  proposed  by  the  bill  is  concerned,  we  are 
heartily  in  favor  of  such  a  board.  We  feel  that  this  board  should 
have  certain  definite  instructions  and  that  it  should  be  in  charge  of 
and  given  jurisdiction  over  the  administration  of  all  the  laws  of 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      517 

the  United  States  pertaining  to  shipping.  We  feel  that  this  board 
shoiikl  investigate  thoroughly  the  present  conditions,  laws,  rules,  and 
regulations  and  then  make  their  recommendations  as  to  the  best 
course  for  the  United  States  to  adopt  for  the  upbuilding  of  the 
American  merchant  marine. 

We  consider  that  the  bill,  No.  450,  providing  for  a  board,  which 
your  committee  introduced  after  a  very  careful  investigation  of  all 
the  shipping  conditions,  is  a  very  fair  bill.  We  feel  that  there  might 
be  some  slight  modifications  as  to  the  control  over  rates  that  the 
board  would  have  immeditely  before  they  had  had  an  opportun- 
ity of  thoroughly  studying  the  situTition  and  becoming  conversant 
Avith  it. 

The  Chairman.  You  mean  the  bill  H.  K.  450? 

Mr.  Franklin.  Bill  450. 

The  Chairman.  The  bill  which  I  introduced  in  this  Congress? 

Mr.  Franklin.  That  you  introduced.  This  problem  is  a  very  dif- 
ferent one  from  that  of  the  railroads.  It  is  a  question  of  a  local  prob- 
lem versus  this,  which  is  an  international  trade  problem.  It  would 
be  a  very  difficult  thing,  we  feel,  for  any  board  to  undertake  to  dic- 
tate the  rates  of  freight  for  foreign  commerce  when  you  have  not 
sufficient  ships  to  carry  all  of  your  own  commerce.  When  you  make 
a  law  or  a  rule  or  a  regulation  for  railroads,  it  falls  equally  upon 
them  all,  it  falls  equally  upon  all  the  carriers  interested  in  that  par- 
ticular branch  of  business.  But  if  you  make  a  law,  a  rule,  or  a 
regulation  in  the  international  trade  that  does  not  apply  to  other 
countries  that  are  in  competition  with  this  country  in  the  com- 
merce of  the  world  and  thereby  place  any  burden  upon  the  com- 
merce of  the  United  States  that  is  not  at  the  same  time  placed  on 
the  commerce  of  other  countries  with  which  you  are  competing,  you 
are  putting  a  handicap  on  your  own  trade  and  commerce. 

Personally,  I  feel  that  if  the  rates  were  regulated  or  dictated  that 
the  shippers  would  suffer  a  great  deal  more  than  the  steamers.  The 
tramp  steamer  is  the  great  regulator  of  rates  on  the  bulk  traffic  and 
the  bulk  traffic  brings  a  large  number  of  steamers  to  the  ports.  The 
merchants  of  this  country  depend  largely  upon  the  regular  line 
steamers  for  their  regular  trades.  If  you  are  going  to  regulate  the 
rates  of  freight  on  regular  line  steamers  and  not  on  the  tramp 
steamers,  you  will  gradually  drive  out  the  regular  line  steamers,  and 
I  think  all  of  the  merchants  of  the  country  will  tell  you  that  what 
they  particularly  need  are  the  regular  services  upon  which  they  can 
rely  and  with  w-hich  they  can  make  contracts  covering  a  period,  so 
that  they  can  sell  their  goods  for  six  months  or  a  year  ahead  of  time 
pnd  make  a  contract  accordingly. 

The  Chairman.  If  you  had  read  the  recommendations  of  this  com- 
mittee following  the  investigation  of  the  shipping  combine  under 
House  resolution  587,  out  of  which  this  bill  H.  R.  450  grew,  you  would 
see  that  we  do  not  make  any  such  recommendations  as  that  to  regu- 
late the  rate 

Mr.  Franklin.  You  misunderstood  me.  I  am  heartily  in  favor  of 
the  report  of  the  committee  and  also  bill  450. 

The  Chairman  (continuing).  And  if  the  shipping  board  would 
undertake  to  do  that  I  agree  with  you  it  would  be  a  very  unwise  thing 
to  do. 


518      SHIPPING  BOAED,  NAVAL  AUXILIAEY^  AND  MERCHANT  MARINE. 

Mr.  Franklin.  Yes;  and  I  think  it  would  be  more  detrimental  to 
the  business  of  the  country  and  the  merchants  of  the  country  than  it 
•would  be  to  the  steamers,  which  can  go  into  other  trades. 

The  Chairman.  I  agree  with  you  it  would  be  unwise. 

Mr.  Franklin.  I  think  so  far  as  we  are  concerned,  as  we  stated 
before  your  committee  previously,  that  we  are  heartily  in  favor  of  a 
board  sitting  here  in  Washington  to  which  all  agreements  will  have 
to  be  submitted  and  which  can  make  any  investigations  they  wish 
regarding  the  rates  of  freight  or  other  conditions  wherever  they 
think  something  is  being  done  that  is  unfair  or  unreasonable  from  a 
commercial  point  of  view. 

The  $50,000,000  for  the  purchase  of  tonnage  would  probably  buy 
only  about  50  steamers,  which  would  not  begin  to  supply  the  tonnage 
requirements  and  would  certainly  not  be  in  keeping  with  the  size 
and  dignity  of  the  United  States,  and  particularly  in  connection 
with  this  very  large  and  important  international  and  commercial  sub- 
ject. If  those  steamers  should  be  constructed  as  auxiliaries  for  the 
Army  and  the  Navy  and  this  board  would  take  up  the  question  with 
the  commercial  interests  and  the  steamship  people  and  endeavor  to 
purchase  steamers  that  would  be  useful  commercial  steamers  and,  at 
the  same  time,  answer  the  purposes  of  the  Army  and  the  Navy,  and 
then  let  those  steamers  to  the  highest  bidder,  it  would  put  those 
steamers  in  exactly  the  same  position  as  other  steamers  constructed 
by  private  individuals  or  owned  abroad  or  otherwise;  because  then 
the  people  interested  in  shipping  would  bid  on  those  steamers  for 
time  charters  just  as  they  do  to-day.  We  quite  appreciate  the  impor- 
tance in  the  direction  of  preparedness  that  the  present  position  is  a 
serious  one  and  that  the  United  States  should  have  a  great  tonnage 
under  its  control:  and  we  feel  it  could  be  done  in  that  way  and 
would  not  be  detrimental  to  the  trade  and  commerce  of  the  country. 
If  the  United  States  should  construct  50  steamers  to  be  put  into  trade, 
it  would  be  a  most  difficult  matter  to  divide  those  steamers  among 
the  coasts  of  the  United  States,  the  ports  of  the  United  States,  the 
shippers,  and  the  steamship  agents  in  each  port.  It  would  be  a  very 
serious  and  difficult  problem. 

I  have  covered  before  the  question  of  auxiliaries  and  colliers  for 
the  Navy  and  the  Army. 

The  only  further  suggestion  I  have  to  make  upon  that  point  is  that 
if  there  are  any  colliers  or  auxiliaries  of  the  Navy  to-day  that  are 
not  in  service  they  could  be  loaned  to  the  Belgian  relief  fund,  which 
is  a  neutral  body.  It  is  feeding  the  Belgians  through  Rotterdam,  and 
they  are  chartering  steamers  and  paying  very  high  prices  for  them 
and  are  using  steamers  that  could  be  used  for  commercial  purposes, 
and  if  the  United  States  now  has  any  of  those  steamers  that  are  idle 
it  would  be  a  very  excellent  way  to  employ  them. 

Mr.  Loud.  We  have  an  adverse  recommendation  on  that  very 
proposition  from  the  department  that  just  came  over  yesterday. 

Mr.  RowE.  From  the  Army  or  the  Navy? 

Mr.  Loud.  From  the  Secretary  of  the  Navv  and  the  Secretary  of 
State. 

Mr.  Franklin.  Whatever  the  reasons  are  that  the  Navy  might 
have,  that  is  an  entirely  different  proposition:  but  if  they  are  idle 
to-day,  from  a  practical  point  of  view,  it  seems  to  me  that  it  would 
be  a  very  useful  way  to  employ  them. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      519 

Mr.  Loud.  I  saw  a  copy  of  the  report  which  was  just  submitted 
to-day. 

Mr.  Franklin.  They  have  some  reason? 

Mr.  Loud.  They  have  given  all  of  the  reasons. 

Mr.  Franklin.  Then  it  can  not  be  done? 

INIr.  Loud.  Yes.  It  was  in  response  to  a  resolution  introduced 
by  me. 

Mr.  Franklin.  As  regards  the  selling  restrictions  of  the  bill,  that 
is  an  exceedingly  important  matter  when  nations  are  at  war,  but 
under  normal  circumstances  and  conditions  it  does  not  seem  to  me 
that  it  is  a  desirable  regulation  or  law.  If  it  had  existed  at  the  time 
of  the  Spanish-American  War  the  United  States  would  not  have  been 
able  to  have  accomplished  in  such  a  short  time  what  they  did.  If 
this  country  were  a  large  owner  of  tonnage,  and  therefore  probably 
not  entering  the  market  for  tonnage,  this  would  be  a  different  matter. 
My  suggestion  with  regard  to  that  is  that  the  board  should  be  in- 
structed that,  so  long  as  the  present  abnomal  conditions  exist,  this 
regulation  should  remain  in  force:  but  if  it  is  found  by  the  board 
that  other  nations  are  willing  to  have  their  steamers  sold,  if  the 
English  ships  can  be  purchased,  then  we  should  open  our  regulations 
so  that  our  steamers  could  be  purchased.  That  would  add  to  the 
value  of  the  shipping  property  from  an  investment  point  of  view. 

Mr.  RowE.  You  mean  as  to  the  regulation  against  the  selling  of 
vessels  without  the  consent  of  this  board? 

Mr.  Franklin.  I  mean  that  if  you  had  somebody  willing  to  loan 
you  money  with  which  to  build  a  ship,  and  you  must  admit  that  in 
case  yon  tint!  the  business  you  are  constructing  it  for  has  disappeared — 
the  business  is  a  liuctu.ating  business,  it  is  a  question  of  supply  and 
demand — and  you  ha\e  constructed  a  steamer,  but  there  are  other 
branches  of  trade  where  the  ship  could  be  used  advantageously  and 
you  have  not  the  right  to  sell  it,  naturally  the  men  from  whom  you 
are  anxious  to  borrow  money  become  nervous  about  their  collateral. 
It  may  be  on  your  hands,  with  no  business  for  it.  and  yet  you  would 
not  be  able  to  sell  it.  And  should  the  Government  enter  in  a  specific 
trade  it  would  be  practically  impossible  for  private  individuals  to 
increase  their  interests  in  that  trade,  as  the}'  would  not  be  able  to  get 
the  money  to  build  the  ships  for  the  trade. 

One  of  the  most  unfortunate  features  of  the  bill  is  that  the  present 
interstate  commerce  laws  should  be  applied  to  ships.  All  steamers 
are  not  alike.  The}^  are  just  as  different — even  sister  ships  differ — as 
the  children  of  a  family,  and  more  so.  And,  in  addition  to  that,  cer- 
tain steamers  are  constructed  to  carry  passengers;  others  freight; 
certain  steamers  can  be  loaded  with  a  cargo  measuring  so  much  a  ton, 
and  others  at  a  lower  or  higher  average  measurement  per  ton.  And 
it  is  impossible  for  steamship  lines  to  be  in  a  position  where  they  have 
to  take  everything  that  is  offered  them  or  that  they  must  continue 
to  do  so  at  a  certain  rate.  They  have  their  capacity,  and  their  capacity 
is  booked  for  that  particular  line  of  traffic  and  that  particular  nature 
of  traffic;  and  they  must  go  out  of  the  market  for  that  and  go  into 
the  market  for  other  things;  they  must  take  so  much  grain  and  so 
much  cotton;  so  much  lead  and  so  much  cotton  and  so  much  hay; 
they  must  counteract  the  dense  cargo  with  the  light  cargo.  It  is  a 
complicated,  intricate  business,  and  the  international  features  make 


520     SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

it  very  difFerent  from  the  railroads;  laws  perfectl}^  proper  and  appli- 
cable to  the  railroads  would  be  most  unfair  and  unreasonable  and 
detrimental  to  the  commerce  of  the  United  States  if  applied  to 
shipping. 

In  regard  to  the  question  of  licenses,  I  am  not  quite  clear  as  to  the 
intention  in  regard  to  that.  From  the  bill  it  appears  that  not  only 
the  steamship  agents  and  operating  companies  but  the  individual 
ships  would  require  a  license.  Now,  would  that  license  be  for  that 
trade  or  all  over  the  world  ? 

The  Chairman.  The  trade  from  American  ports. 

Mr.  Franklin.  And  of  course  it  would  have  no  bearing  elsewhere. 

The  Chairman.  No.  We  would  have  no  jurisdiction.  I  imagine, 
except  over  vessels  trading  from  American  ports;  but  if  this  com- 
pany operating  ships  in  other  ports  were  to  operate  them  prejudi- 
ciously  to  American  commerce  that  might  give  this  shipping  board 
the  occasion  and  the  power  by  this  bill  to  revoke  their  license  to 
trade  from  American  ports. 

Mr.  Franklin.  Then,  again,  instead  of  the  American  investing 
his  money  in  the  American-flag  ships,  he  would  invest  in  a  ship 
owned  in  Belgium,  France,  or  some  other  place  where  he  could  op- 
erate it.  without  those  handicaps  and  onerous  regulations.  Now,  if 
the  United  States  is  going  to  pass  a  shipping  bill  it  should  be  some- 
thing that  is  going  to  assist  shipping  and  to  tend  to  build  up  the 
shipping  in  a  general  way  and  not  in  a  specific  manner.  If  we  have 
licenses  and  other  regulations  that  are  not  imposed  by  other  nations, 
then  your  rates  of  freight,  for  the  sake  of  argument,  from  the  United 
States  to  South  America  are  going  to  be  higher  than  from  England 
and  Germany  to  South  America.  Steamers  are  free:  the  commerce 
of  the  world,  generally  speaking,  is  free.  It  is  international.  It 
can  not  be  regulated  simply  by  the  United  States  and  not  by  other 
countries,  except  to  the  disadvantage  of  the  United  States.  There- 
fore, as  I  have  stated  before.  I  do  not  quite  grasp  how  broad  the 
license  feature  would  be.  But  it  is  dangerous  from  my  point  of 
view. 

The  Chairman.  You  do  not  think  that  the  commerce  of  the  United 
States  is  sufficiently  inviting  to  a  foreign  ship  line  to  induce  that  line 
to  conform  to  the  reasonable  regulations  or  rates  that  might  be 
imposed  by  this  shipping  board? 

Mr.  Franklin.  That  line  will  conform  to  all  of  the  laws  and 
regulations  of  the  United  States  so  long  as  it  can  make  more  money 
by  coming  to  the  United  States  than  it  can  make  by  going  to  India, 
China,  Japan,  Australia.  New  Zealand,  South  Africa,  or  other  places 
in  the  world.  There  are  a  great  many  lines  of  steamers,  and  very 
important  lines  of  steamers,  that  do  not  come  to  the  United  States. 
The  United  States  has  not  and  never  will  have  enough  steamers 
under  its  own  flag  to  carry  its  own  commerce,  and  it  should  draw 
at  the  lowest  possible  rates  from  the  tonnage  of  the  world.  If  you 
inaugurate  a  shipping  board,  and  that  shi])ping  board  investigates 
the  situation,  it  will  find  that  during  the  last  10  years  the  commerce 
of  the  United  States  has  been  carried  across  the  North  Atlantic  at 
a  lower  rate  per  mile  than  commerce  has  ever  been  carried  in  the 
history  of  the  world.    That  is  carried  by  foreign  steamers.    If  you 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     521 

are  going  to  impose  burdens  on  those  foreign  steamers,  they  will  go 
elsewhere;  but  those  steamers  that  come  here  for  purposes  of  their 
own,  which  have  been  constructed  particularly  for  this  trade  and 
can  not  go  elsewhere,  will  continue  to  come  here,  and  they  will  con- 
tinue to  comply  with  your  laws.  But  you  will  be  increasing  the  cost 
of  delivering  your  goods  to  the  consumer. 

The  CiiAiiorAX.  You  are  assuming  this  board  will  be  so  blind  or 
stupid  as  to  invoke  regulations  that  would  accomplish  that  end? 

Mr.  Franklin.  No;  I  am  not  assuming  that.  I  am  in  favor  of 
the  l)oard.     I  believe  that  the  board  will  be  reasonable. 

The  Chairman.  Would  it  be  worth  while  to  have  a  board  and  just 
pay  salaries  to  them  and  not  give  them  any  powers  of  supervision? 

Mr.  Franklin.  No;  I  think  the  board  should  have  absolute  power 
of  supervision.  I  feel  the  board,  after  they  investigate  the  matter 
thoroughly,  if  they  feel  a  steamship  company  is  doing  anything 
unreasonable,  should  have  the  power  to  correct  it. 

The  Chairman.  That  is  what  the  provision  is  intended  to  do. 

Mr.  Franklin.  I  think  H.  R.  450  covers  that. 

The  Chairman.  We  have  tried  to  avoid  the  difficulties  you  have 
in  mind  in  this  bill. 

Mr.  Franklin.  As  I  told  3'ou  before,  in  testifying  l)efore  the  com- 
mittee at  that  time.  I  was  never  opposed  to  that.  I  feel  that  the 
United  States,  with  its  tremendous  connnerce,  must  have  somebody 
here  in  Washington  before  whom  the  shippers  can  make  a  plea; 
that  they  can  put  before  them  anything  that  they  think,  in  their 
opinion,  has  been  an  unreasonable  act  on  the  part  of  the  steamship 
company  or  steamship  operators.  But  I  feel  that  it  would  be  a  very 
serious  mistake  to  pass  any  bill  which  includes  a  reference  to  the 
interstate  commerce  act.  The  conditions  are  absolutely  different. 
One  is  a  local  and  the  otlier  an  international  question  and  can  not  be 
dealt  with  as  are  the  railroads. 

The  Chairman.  If  the  provisions  of  section  9  were  stricken  out  of 
this  bill  and  the  provisions  of  H.  R.  450  inserted  in  lieu  of  them,  you 
think  that  would  make  a  better  bill  as  far  as  regulation  is  concerned? 

Mr.  Franklin.  I  say  that  that  would  make  a  decidedly  better  bill, 
to  be  coupled  with  the  elimination  of  the  license  feature. 

The  Chairman.  I  hardly  think  there  would  be  any  reason  for  the 
license  feature  in  that  event:  that  is,  if  the  provision  of  the  House 
bill  No.  450  were  incorporated  in  this  bill  and  section  9  stricken  out. 

Mr.  Franklin.  My  position  has  always  been  it  is  foolish  to  argue 
against  a  board.  The  United  States  should  have  some  board  of  this 
kind.  That  board  should  study  the  whole  shipping  problem.  It 
should  make  its  recommendations;  it  should  be  a  board  similar  to 
the  British  Board  of  Trade.  It  should  have  control  over  all  rules 
and  regulations,  measurements,  inspections,  and  everything  else  now 
covered  by  the  Department  of  Commerce.  It  should  he  the  United 
States  authority  regarding  shipping  and  the  authority  in  control. 

I  do  not  know  whether  I  have  made  it  sufficiently  clear  about  the 
damage  that  I  fear  might  be  done  to  the  commerce  if  the  rates  should 
be  too  severely  regulated;  but  if  there  are  any  questions  on  chat,  I 
shall  be  glad  to  answer  them. 

I  thank  you. 


522      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINIU 

STATEMENT  OF  MR.  WILLIAM  H.  KNOX,  OF  NEW  YORK, 
PRESIDENT  OF  THE  WILLIAM  H.  KNOX  CO. 

Mr.  Knox.  The  William  H.  Knox  Co.  is  a  New  York  corporation 
engaged  in  the  export  and  import  business  and  dealing  in  most  of  the 
large  markets  of  the  world  for  the  last  25  years. 

The  Chairman.  In  what  class  of  merchandise? 

Mr.  Knox.  All  kinds  of  American  manufactured  goods  and  raw 
materials;  everything  from  clothespins  to  locomotives — wheat,  cotton, 
lumber,  pig  iron,  steel  rails,  or  any  other  commodity  for  which  we  can 
find  a  market  abroad.  It  occurs  to  me  that  I  am  occupying  rather  an 
embarrassing  position,  for  the  reason  that,  I  dare  say,  I  represent  the 
very  large  class  of  business  men  in  this  country  whom  the  Govern- 
ment is  endeavoring  to  help.  For  many  years  we  have  fondly  hoped 
that  something  would  happen  whereby  we  would  have  »  restoration 
of  American  shipping  on  the  high  seas.  We  have  heard  a  great  deal 
about  proposals  here  to-day,  but  very  little  about  effective  measures 
that  would  bring  about  the  result  so  much  desired. 

As  a  general  proposition,  I  dare  say,  the  shippers  of  this  country 
would  welcome  any  efficient  relief  that  would  be  afforded,  provided 
there  was  some  clear  understanding  as  to  the  methods  by  which  that 
relief  would  be  exercised  and  its  operation  in  the  general  business 
interests  of  the  country.  We  have  heard  quite  a  bit  to-day  about 
what  I  would  be  pleased  to  call  "  individual  interests  " ;  but  I  have 
yet  to  hear  any  broad  discussion  of  some  of  the  most  important  points 
that  to  my  mind  would  affect  the  shipper  and,  particularly,  the  men 
who  have  to  deal  with  foreign  markets.  The  remarks  of  Mr.  Gib- 
boney  this  morning  would  not  be  accepted  by  any  shipper  as  any 
sound  reasoning,  or,  in  fact,  offering  any  relief  for  what  is  confront- 
ing us.  In  fact,  everything  he  had  to  say,  to  my  mind,  seemed  to  be 
predicated  on  the  continuing  of  present  conditions.  It  may  be  true 
that  he  has  money  to  buy  all  of  the  ships  that  can  be  found,  at  any 
old  prices.  If  it  be  true  that  he  is  willing  to  build  any  number  of 
ships  at  any  price  he  can  get  for  them,  if  it  be  true  that  he  is  pre- 
pared to  take  100,000  tons  of  steamships  from  the  United  States 
Government  on  a  guaranty  of  6  per  cent  net  and  pay  for  the  use  of 
such  vessels,  depreciation,  insurance,  and  all  of  those  charges  in  a 
fluctuating  market  in  which  he  has  to  compete  with  this  commerce,  I 
should  say  that  the  very  point  for  which  he  was  striving  was  to  try 
to  maintain  the  conditions  that  exist  to-day.  But  there  is  absolutely 
no  relief  in  what  he  suggests ;  it  does  not  contribute  1  ton  of  tonnage 
to  the  commerce  of  the  world.  He  offers  a  most  beautifully  painted 
rainbow  which  could  not  last  unless  he  proposed  or  assured  or  guar- 
anteed to  the  Government  that  it  should  have  a  fair  return  on  its 
money.  As  I  view  the  proposition  in  a  broader  sense,  we  want  some 
effective  relief,  workable  methods  that  would  make  the  American 
manufacturer  and  producer  escape  from  the  throttling  methods  to 
which  he  is  being  subjected  to-day. 

A  word  as  to  methods.  Under  this  proposed  legislation  in  theory 
we  seem  to  have  something  that  offers  tangible  relief.  We  are.  how- 
ever, very  largely  concerned,  as  shippers,  as  to  what  effect  the  opera- 
tion of  this  proposed  bill  would  have  upon  the  merchandising  of  our 
American  products.  I  fail  to  see  where  Government  ownership 
could,  bj'  anj^  possibility,  bring  about  an  effective  and  permanent 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      523 

relief.  What  we  all  recognize  to  be  the  crux  of  the  question  is  the 
scarcity  of  tonnage.  I  fear  that  such  Government-owned  ships  would 
very  severely  counteract  upon  the  investment  of  private  capital  in 
the  several  lines  of  business.  To  put  it  briefly,  I  fail  to  see  how  the 
Government  can  compete  with  the  business  men  of  this  country,  but 
I  am  not  perhaps  quite  as  clear  in  my  mind  that  it  is  the  intention 
of  the  Government  so  to  compete.  On  that  point  we  -would  like 
information. 

The  Chairman.  We  have  tried  to  make  it  as  clear  as  we  could,  but 
there  is  a  persistent  disposition  to  misunderstand.  I  think  I  am  war- 
ranted in  making  that  statement.  I  do  not  think  certain  interests 
want  to  understand  our  position  in  this  matter.  If  there  is  anything 
emphasized  in  this  bill,  it  is  that  only  in  those  instances  where  pri- 
vate enterprise  will  not  come  in  and  furnish  you  with  accommoda- 
tions, as  a  shipper,  an  importer,  and  an  exporter,  that  then  the  Gov- 
ernment might  help  you. 
Mr.  Knox.  Quite  true. 
The  Chairman.  Do  3'ou  object  to  that? 

Mr.  Knox.  I  only  asked  for  information.  It  is  not  clear  in  my 
mind  as  to  whether  the  Government  does  intend  to  compete  with 
private  capital. 

The  Chairaian.  On  the  contrary,  the  Oovernment  does  not  intend 
to  compete. 

Mr.  Knox.  Very  well.  sir. 

The  Chairman.  But  if  you  are  indifferent  to  help,  of  course,  that  is 
another  matter.  I  admit  the  Government  is  trying  to  do  something 
for  you  in  the  way  of  a  working  measure. 

Mr.  Knox.  We  are,  however,  I  think,  opposed  and  object  emphati- 
cally to  the  operation  by  the  Government  of  steamers  engaged  in  for- 
eign commerce,  for  the  reason  that  I  fail  to  see  how  any  Government 
control  or  attempted  control  of  such  a  situation  would  do  otherwise 
than  to  affect  detrimentally  the  shipping  interests  of  the  country.  I 
do  not  mean  by  that  the  steamship  men :  I  mean  the  shippere  who 
are  providing  cargoes  for  the  vessels  which  you,  I  hope,  will  be  able 
to  give  us. 

The  Chairman.  If  by  any  sort  of  magic  the  Government  could 
create  a  tonnage  of  100  ships  of  5,000  gross  tons,  which  would  be 
about  7,500  tons  dead  weight  capacity,  to  engage  in  the  foreign  trade, 
you  would  not  oppose  that,  would  you  ? 

Mr.  Knox.  Not  at  all,  sir,  if  I  were  sure  that  the  tonnage  would 
be  distributed  pro]:)erly  to  meet  the  exigencies  of  that  trade.  The 
ramifications  of  this  foreign  business  are  so  many  and  so  great  that 
while  Ave  gladl}''  accept  the  regulations  as  to  rates,  we  would  equally 
be  most  desirous  of  being  assured  that  together  w'ith  the  regulated 
rates  we  would  have  the  requisite  tonnage. 

The  Chairman.  That  you  would  get  your  share  of  the  tonnage  for 
your  business? 

Mr.  Knox.  Of  course  we  will  assume  that  our  legislators  will  en- 
deavor to  give  us  that  tonnage;  but  I  am  now  trying  to  point  out  in 
some  practical  way  how  possible  conditions  confronting  us  in  the 
future  may  affect  the  shippers'  in  that  respect.  I  do  not  think  it 
would  be  at  all  profitable  to  attempt  any  discussion — certainly  not 
on  my  part — as  to  the  conditions  that  exist  being  abnormal  conditions 
to-day.    We  are  between  the  upper  and  the  nether  millstones.    We 


524     SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

could  very  largely  increase  our  business  to-day  with  the  tonnage  to 
carry  the  freight;  but  unfortunately  that  tonnage  is  most  largely 
used  to-day  in  the  transport  of  freights  which  do  not  perhaps  come 
within  the  province  of  my  particular  line  of  business.  If  the  50  per 
cent  of  the  enormous  amount  of  tonnage  now  doing  a  trans- Atlantic 
business  in  the  carriage  of  government  supplies,  etc.,  could  be  diverted 
to  the  ordinary  channels,  we  would  have  very  speedy  relief  from 
the  congested  and  impossible  conditions  at  present. 

The  matter  of  the  regulation  of  rates  is  something  that  would  ap- 
peal to  us  greatly;  but  as  a  shipper  I  would  like  to  know  how  the 
Government,  by  any  possibility,  could  fix  rates  under  which  I  could 
operate.  For  instance,  in  the  ordinary  course  of  business  we  w^ill  be 
asked  to  name  a  price  and  on  all  large  commodities  such  prices  are 
quoted  abroad  on  what  we  call  a  c.  i.  f .  basis ;  that  is,  cost,  insurance, 
and  freight.  Suppose  we  have  to  quote  on  such  a  commodity,  and 
we  have  been  told  by  the  Government  that  the  rate,  say,  will  be  $10 
per  ton.  Now,  I  want  to  make  a  contract  for  the  shipment  of  my 
stuff.  Say  it  is  the  month  of  March  and  I  want  to  make  a  contract 
for  the  shipment  of  my  stuff  next  September.  I  go  to  the  shipping 
people  and  am  told  the  rate  will  be  $10.  I  want  to  make  a  contract. 
They  refuse  on  the  plea  that  they  may  have  more  profitable  freight 
offered  them  before  September,  and  that  they  may  be  full  to  their 
carrying  capacity  at  present  of  the  commodity  which  I  have  to  offer; 
so  they  do  not  find  it  convenient  to  trade  with  me.  I  would  then  be 
in  a  position  of  being  unable  to  go  elsewhere  to  seek  freight  space. 
You  would  very  likely  be  attempting  to  establish  a  fixed  value  on 
what  must  always  be  a  purchasable  commodity,  just  the  same  as 
wheat,  corn,  or  any  other  line  of  merchandise. 

In  the  case  of  a  declining  market  the  shipper  would  be  in  the  posi- 
tion of  having  to  contract  for  freight  which  two  or  three  months 
later  would  have  been  carried  at  a  lower  rate;  and  the  fellow  who 
comes  in  afterwards — I  am  still  dealing,  if  you  please,  with  Govern- 
ment rates  or  regulative  rates — would  be  taking  the  business.  In  the 
case  of  a  rising  market,  I  am  afraid  our  good  brethren  in  the  steam- 
ship business  Avould  find  it  convenient  to  shut  out  our  freights  be- 
cause they  could  get  higher  rates  later  on.  At  present,  under  normal 
conditions,  when  we  have  all  the  shipping  facilities  at  our  com- 
mand, of  the  world  (it  is  simply  a  question  of  price),  we  are  able  to 
make  trading  arrangements  and  individual  contracts  and  the  trade  is 
sealed  and  closed.  To-da}',  of  course,  we  can  not  do  that,  we  are 
living  from  hand  to  mouth,  and  there  are  29  different  rates  for  29 
different  ships  that  go  to  the  same  ports,  and  everything  is  in  a  state 
of  chaos  and  the  only  relief  would  be  increased  tonnage. 

The  Chairman.  You  are  talking  about  conditions  that  I  do  not 
think  anybody  imagines  would  exist  if  this  bill  becomes  a  law,  un- 
less we  assume  the  shipping  board  would  not  be  men  of  average  com- 
mon sense. 

Mr.  Knox.  We  are  in  favor  of  a  shipping  board,  Mr.  Chairman, 
and  that  they  should  exercise  control  over  any  and  all  questions  per- 
taining to  foreign  commerce  and  thereby  prevent  an}^  unreasonable 
restraint  of  trade,  etc.  We  would  be  in  favor  of  the  construction  by 
the  Government  of  auxiliary  vessels  that  would  be  useful  for  com- 
mercial purposes;  but  it  occurs  to  me  to  suggest  that  perhaps  these 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      525 

vessels  could  be  constructed  primarily  for  commercial  purposes 
and  secondaril}'^  for  military  purposes. 

The  Chairman.  That  is  just  what  this  bill  provides  for.  It  says 
that  they  shall  be  leased,  sold,  or  chartered  to  private  purchasers, 
firms,  or  corporations  of  American  citizens. 

Mr.  Knox.  I  understood  the  bill  to  say  that  they  should  be  con- 
structed for  military  and  naval  purposes  first. 

The  Chairman.  Oh,  no:  it  does  not.  It  says  that  they  are  for  com- 
mercial purposes  but  they  shall  be,  of  course,  available  as  naval 
auxiliaries  in  the  event  of  war,  when  the  Government  may  take  them 
over. 

Mr.  ;^^ox.  On  the  matter  of  licenses,  there  are  several  very  impor- 
tant trades  that,  to  my  mind,  would  probably  suffer.  In  the  case  of 
bulk-cargo  freights  where  we  would  be  chartering  foreign-owned  ton- 
nage it  might  suit  the  interests  of  this  country  to  refuse  to  license 
such  a  boat,  in  order  that  such  cargo  would  go  into  American  bot- 
toms. The  probable  consequence  of  that  would  be  that  our  foreign 
competitors,  manufacturers,  and  shippers  would  have  an  increased 
volume  of  tonnage  at  their  command  Avhich  would  in  turn  permit  of 
their  shipping  their  commodities  abroad  at  a  lower  freight  rate  than 
we  could  in  American  bottoms.  Great  Britain  alone  has  over  4,000 
steamers  available  for  their  commercial  purposes.  If  it  be  true  that 
we  have  in  this  country  to-day  some  two  hundred  and  odd  under  con- 
struction, no  immediate  relief  in  the  way  of  increased  tonnage  would, 
of  course,  be  available  for  several  years  to  come.  On  the  other  hand, 
if  it  were  possible  for  the  Government  to  accomplish  the  same  pur- 
pose by  devising  means  whereby  these  individual  builders  and  those 
who  would  like  to  go  into  the  construction  of  ships,  shipyards,  etc. — 
if  it  were  possible  for  the  Government  to  devise  means  whereby  such 
interests  could  obtain  the  use  of  capital  and  have  such  capital  em- 
ployed in  those  industries,  such  money  could  be  properly  safe- 
guarded by  the  issuance  of  mortgages,  as  we  have  heard ;  and  in  the 
case  of  this  $50,000,000  that  you  propose  to  appropriate,  that  may 
serve  as  a  nucleus  for  three  times  the  amount  that  would  be  avail- 
able if  you  go  into  the  business  of  operating  ships. 

Mr.  Byrnes.  You  do  not  mean  by  that  to  lend  the  money  to  the 
shipbuilders  for  the  purpose  of  building  ships  ? 

Mr.  Knox.  Yes;  just  as  in  the  case  of  the  railroads  many  years 
ago.  In  the  matter  of  the  equalization  of  the  construction  cost,  I 
firmly  believe  that  world-wide  conditions  are  such  to-day  that  there 
would  be  very  little  or  in  fact  none  at  all.  And  later  on  when  we 
meet  the  competition  of  foreign  shipbuilding,  I  also  have  it  pretty 
clearly  fixed  in  my  mind  that  we  would  be  building  foreign  ships 
before  many  years.  We  certainly  have  the  material  and  we  only 
need  the  necessary  impetus  to  get  started  in  the  business  in  a  large 
way  to  permit  of  our  competing  with  the  foreign  shipbuilders. 

In  the  matter  of  the  equalization  of  operating  costs,  I  should  think 
it  ought  to  be  possible  to  devise  some  scheme  whereby  a  very  small 
tax  imposed  on  the  freight  moneys  earned  by  those  boats  could  be 
utilized  for  the  purpose  of  amortizing  the  funds  that  might  be  ad- 
vanced by  the  Government  for  the  purpose  of  equalizing  the  costs  of 
operation.  I. also  believe  that  the  cost  of  operation  will  grow  ma- 
terially nearer  to  the  foreign  cost.     One  of  the  very  things  you 

32910—16 34 


526     SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARl  NK. 

perhaps  are  advocating  in  this  measure  would  be  to  bring  about  just 
such  a  condition  as  that.  And  I  would  be  in  favor  of  a  shipping 
board,  but  it  looks  to  me  that  the  perplexities  of  many  of  the  ques- 
tions they  will  be  called  upon  to  handle,  are  perhaps  too  little  recog- 
nized by  the  majority  of  people.  We  are  treating  of  international 
commerce  to  all  of  the  many  foreign  deep-water  ports  of  the  world. 
The  rates  of  freight  vary,  the  conditions  under  which  vessels  are  op- 
erated vary,  the  matters  of  insurance,  the  regulations  affecting  trans- 
portation of  the  freight,  and  all  make  it  a  most  complex  proposition. 
Whereas  to-day  I  can  call  an  expert  on  admiralty  law  on  the  tele- 
phone, or  can  call  an  expert  in  insurance  on  the  telephone,  and  I  can 
get  hold  of  my  steamship  man  and  get  a  rate  of  freight  in  one 
minute,  and  close  up  my  transaction,  I  am  afraid  that  I  would  be  all 
at  sea  if  I  were  to  attempt  to  do  my  business  by  having  in  mind  that 
I  must  work  on  a  rate  that  was  fixed  by  a  board  in  Washington  and 
which  I  could  not  reach  perhaps  without  coming  down  here.  I  could 
not  do  very  much  business  if  I  had  to  wait  upon  my  friends  in 
Washington,  because  in  these  days  of  stress  and  strain  we  do  a  vast 
volume  of  business  by  cable.  It  is  touch  and  go,  and  the  man  who 
has  the  goods  and  who  has  the  freight,  and  who  can  make  a  quick 
trade  is  the  one  that  gets  the  business. 

The  Chairman.  Right  at  that  point,  Mr.  Knox,  I  do  not  suppose 
any  man  who  would  serve  on  the  board  and  has  studied  this  question 
would  for  a  moment  think  of  fixing  a  rate  in  the  foreign  trade  that 
it  would  be  necessary  to  have  changed  by  authority  from  Washington. 

Mr.  Knox.  Would  not  that  be  the  idea  ? 

The  Chairman.  These  difficulties  you  speak  of  do  not  grow  out 
of  this  legislation.  They  are  good,  sound,  economic  principles  ap- 
plied to  the  foreign  trade  and  I  thoroughly  agree  with  you.  But 
I  do  not  see  where,  if  this  bill  were  enacted  into  law,  it  would  be  an 
obstacle  in  carrying  out  those  very  sound  principles  you  are  speaking 
of  now. 

Mr.  Knox.  I  have  attempted  to  show  these  regulatory  provisions, 
sir.  We  have  to  start  on  some  basis.  We  will  take  a  concrete  in- 
stance :  The  shipping  board  says  the  rate  shall  be  $10 

The  Chairman.  I  say  that  while  they  have  general  powers  under 
this  bill  with  reference  to  commerce  I  do  not  suppose  they  would 
insist  that  there  should  be  a  certain  schedule  of  rates  in  the  foreign 
trade  filed  with  this  board,  and  then  they  could  only  be  changed  on 
notice,  and  all  that.  If  they  did,  I  think  it  would  be  unwise  for  the 
very  reason  that  you  state. 

Mr.  Knox.  The  board  would,  of  course,  take  into  consideration  in 
the  fixing  of  the  rate  that  it  was,  and  would  be,  made  having  in  mind 
the  world-wide  competition  that  would  be  brought  against  such  a 
rate. 

The  Chairman.  But  if  this  line  were  to  discriminate  against  you 
in  favor  of  another,  would  you  object  to  that? 

Mr.  Knox.  I  would  naturally  oppose  any  discrimination. 

The  Chairman.  Then  you  would  want  the  board  to  correct  that? 

Mr.  Knox.  Oh,  this  board  should  have  the  power  to  control  such 
matters. 

Mr.  Byrnes.  You  would  not  object  to  the  provision  that  the  board 
should  regulate  through  rates,  as  is  provided  in  section  9  here? 


I 


SHIPPING  BOABD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      527 

Mr.  Knox.  Not  at  all,  sir. 

Mr.  Byrkes.  You  think  they  are  a  good  thing? 

Mr.  Knox.  There  is  one  provision  in  this  same  function  of  the 
board  that  has  not  yet  been  touched  upon  and  which  is  of  very  great 
importance.  You  make  a  reference  there  to  the  power  of  the  board 
to  establish  preferential  rates.  That,  of  course,  in  its  last  analysis, 
is  the  exercise  of  a  protective  principle.  In  some  lines  of  industry 
in  this  country,  noticeably  iron,  steel,  and  cement,  the  occasion  would 
iirise,  Avhen  conditions  reached  normal,  when  we  would  be  unable  to 
compete  with  the  foreign  manufacturers  on  account  of  the  difference 
of  our  freight  rates;  and  it  might  suit  the  Government  and  cer- 
tainly might  suit  the  manufacturer  and  producer  to  have  a  freight 
rate  made  on  a  preferential  basis  that  would  assist  us  in  marketing 
such  products  in  competition  Avith  the  world.  The  foreigner  does 
that  very  thing  to-day. 

Mr.  Byrnes.  Your  idea  is  that  a  board  appointed  and  constituted 
for  the  development  of  a  merchant  marine  would  injure  it,  and  that 
is  why  you  oppose  it? 

Mr.  Knox.  No,  sir. 

Mr.  Byrnes.  Do  you  not  think  that  a  board  constituted  as  that 
board  Avould  be  would  not  do  the  things  that  you  say  noAv  it  is  possi- 
ble that  they  would  do,  but  that  their  purpose  would  be  to  build  up 
a  merchant  marine  instead  of  to  destroy,  and,  if  animated  by  that 
purpose,  it  would  be  a  very  good  body  instead  of  an  injurious  one? 

Mr.  Knox.  That  is  perfectly  proper,  sir;  if  you  say  that  board  as 
constituted  and  proposed  would  have  for  its  purpose,  as  we  recog- 
nize it  would,  the  honest  endeavor  to  build  up  an  American  mer- 
chant marine  and  to  facilitate  the  sale  abroad  of  American  manufac- 
tured stuff  and  American  products. 

Mr.  Byrnes.  That  is  all  it  is;  that  is  the  sole  purpose  of  the  bill. 

Mr.  Knox.  All  we  are  anxious  to  know  would  be,  in  the  proposed 
operation  of  the  methods  to  be  employed,  whether  or  not  our  inter- 
ests would  be  affected  adversely  thereby.  I  say  there  are  some 
things  there  that  do  not  appeal  to  us,  and  we  fear  them. 

Mr.  Byrnes.  Is  not  this  true,  that  that  is  the  purpose  of  the 
board,  and  your  idea  is  that  the  board  in  the  exercise  of  its  power 
might  do  something  to  injure  you?  Is  not  that  true  of  all  boards, 
that  if  a  board  constituted  for  the  purpose  of  developing  an  indus- 
try should  thereafter  take  it  into  its  head  to  destroy  the  industry 
or  to  injure  it,  do  you  not  think  it  is  far-fetched  to  imagine  any 
board  appointed  under  this  bill  would  set  to  work  to  injure  an 
industry  instead  of  to  build  it  up,  when  the  purpose  of  the  bill  is  to 
have  it  developed? 

Mr.  Knox.  I  agree  with  you  there. 

Mr.  Byrnes.  Then  why  indulge  in  the  realm  of  fancy  as  to  what 
injuries  they  might  possibly  inflict  upon  you? 

Mr.  Knox.  Because  I  have  no  assurance  now 

Mr.  Byrnes.  The  railroads  have  no  assurance  that  the  Interstate 
Commerce  Commission  might  not  promptly  promulgate  a  rate  that 
would  be  absolutely  confiscatory ;  but  they  do  not  do  it. 

Mr.  Knox.  That  would  be  an  entirely  different  proposition,  sir. 
You  are  dealing  with  local  matters  as  compared  with  international. 

Mr.  Byrxes.  Is  it  not  true  that  the  railroads  did  believe  that  the 


528      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Interstate  Commerce  Commission  would  destroy  them?  But  in- 
stead of  that  we  find  them  now  looking  to  the  Interstate  Comnierce 
Commission  to  protect  them  against  the  State  railroad  commissions. 
'Mr.  Knox.  Their  objections  to  the  work  of  the  Interstate  Com- 
merce Commission  were  not  founded  on  the  same  reasons  I  have 
been  trying  to  express. 

Mr.  Brynes.  They  were  founded  on  the  principle  they  were  just 
afraid  of  regulation:  that  at  heart  they  were  afraid  of  any  regu- 
lation. 

Mr.  Knox.  I  do  not  protest  against  regulation.  I  protest  against 
what  I  consider  to  be  sound  reasons  wliy  such  regulations  would 
adversely  affect  my  interests  as  a  shipper  of  merchandise. 

Mr.  Byrnes.  What  is  the  particular  regulations  that  you  insist 
would  naturallv  folloAv  the  passage  of  this  bill? 

Mr.  Knox.  You  mean  my  first  one? 

Mr.  Byrnes.  Yes;  that  would  necessarily  follow  the  passage  of 
this  bill.     What  regulation? 

Mr.  Knox.  What  regulation  that  would  immediately  follow  the 
passage  of  the  bill  ? 

Mr.  Byrnes.  Yes;  would  necessarily  follow — that  you  think  the 
board  would  necessarily  put  into  effect? 

Mr.  Knox.  I  am  not  competent  to  say  what  the  board  might  do. 
I  have  a  fair  understanding  of  what  the  bill  might  provide  for. 

Mr.  Byrnes.  You  believe  it  would  injure  you? 

Mr.  Knox.  No;  I  have  not  said  I  thought  it  would  injure  me. 

The  Chairman.  In  section  9  it  sa^^s: 

The  board  herebj^  created  sliall  have  the  power  and  authority  to  rejiuhite 
the  operation  of  all  corporations,  firms,  or  individuals  enjra.Ered  as  common  car- 
riers in  the  transportation  of  passengers  and  property  by  water  between  the 
ports  of  the  United  States  and  not  entirely  within  the  limits  of  a  single  State 
and  between  the  United  States  and  foreign  countries. 

Are  you  opposed  to  having  such  power  as  that  vested  in  the  board? 
Mr.  Knox.  The  regulation  of  rates? 
The  Chairman  (reading)  : 

Regulating  the  operation  of  all  corporations  to  determine  and  prescribe  just 
•and  reasonable  rates  or  charges  to  be  demanded  or  collected  for  the  transpor- 
tation of  passengers  and  property  is  such  trade ;  just,  fair,  and  reasonable 
classifications,  regulations,  or  practices  to  be  followed  with  regard  thereto. 

Mr.  Knox.  I  would  be  in  favor  of  the  board  exercising  any  rea- 
sonable provision  that  Avould  protect  the  shipper  in  the  matter  of 
rates  and  shipping  regulations. 

The  Chairjman.  They  are  simply  given  that  power. 

Mr.  Knox.  Yes. 

The  Chairman  (reading)  : 

Provided,  hoicever.  That  the  board  may  prescril)e  preferential  rates  covering 
the  transportation  aforesaid  if  in  its  judgment  such  rates  are  necessary  in 
order  effectually  to  carry  out  the  purposes  of  this  act. 

Mr.  Knox.  I  would  be  in  favor  of  that,  sir. 
The  Chairman  (reading)  : 

And  when  property  may  be  and  is  transported  by  common  carriers  from  a 
point  within  the  United  States  to  foreign  countries  or  to  and  from  the  Terri- 
tories or  possessions  of  the  United  States,  the  carriage  being  l)y  railroad  or 
railroads  ,or  other  means  of  transportation,  within  the  United  States,  and  a 
vessel  or  vessels  operating  under  American  registry  or  enrollment,  the  board 


SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MEECHANT  MAEINE.      529 

is  hereby  autliorized  to  determine  and  prescribe  through  routes  between  and 
over  sucli  rail-aiid-water  lines,  and  just  and  reasonable  joint  rates  or  charges 
to  be  demanded  and  collected  for  the  transportation  of  property  over  such 
routes,  and  to  determine  and  presci'ibe  just,  fair,  and  reasonable  classifications, 
regulations,  or  practices  to  be  adopted  and  followed  in  regard  to  such  traflic, 
including  the  issuance  and  form  of  through  bills  of  lading  and  permits  for  ship^, 
ments  for  specific  sailings,  which  shipments  are  hereby  expressly  authorized. 

Do  you  object  to  that  provision? 
Mr.  Knox.  Xot  at  all,  sir. 
The  Chairjian  (reading)  : 

Provided,  hoircver,  That  the  board  may  prescribe  preferential  rates  covering 
the  transportation  aforesaid  if  in  its  judgment  such  rates  are  necessary  iu 
order  effectually  to  carry  out  the  purposes  of  this  act. 

In  other  words,  just  a  case  where  you  instance  of  competing  on 
some  particular  product  with  a  foreign  competitor,  and  the  differ- 
ence really  is  the  rail  rate  from,  say,  Pittsburgh  to  the  seaboard. 
Under  that  provision  the  railroad  company  could  quote  3^011  a  rate 
that  would  enable  you  to  meet  that  foreign  competition  and  not 
violate  the  laAv.    Are  you  opposed  to  that  ? 

Mr.  Knox.  No. 

The  Chairman.  What  I  am  curious  to  know  is  just  where  you 
object  to  this: 

Provided,  however,  That  the  board  may  prescribe  preferential  rates  covering 
the  transportation  aforesaid  if  in  its  judgment  such  rates  are  necessary  in 
order  effectually  to  carry  out  the  purposes  of  this  act.  And  whenever  the 
carriers  between  and  over  whose  lines  joint  routes  have  been  established  as 
prescribed  aforesaid  shall  fail  to  agree  among  themselves  as  to  the  apportion- 
ment  or  division  of  the  joint  rate  prescribed  by  the  board  as  aforesaid  the 
board  may,  after  a  hearing,  prescribe  the  just  and  reasonable  proportion. 

That  is,  just  simply  how  much  interest  it  should  have.  Now,  that 
is  the  whole  of  it;  that  is  the  very  provision  in  this  bill. 

Mr.  Knox.  But  we  have  yet  to  learn.  Mr.  Chairman,  how  the 
shipper  is  going  to  get  his  tonnage  under  the  proposed  workings 
of  this  bill. 

The  Chairman.  I  am  talking  about  the  regulatory  features  now, 
and  you  have  assented  to  every  one  of  them. 

Mr.  Byrnes.  That  is  what  I  am  asking  about — the  regulation; 
that  is  the  object  of  those  features  in  the  act.  It  is  another  question 
of  how  you  are  going  to  get  the  tonnage.  As  to  the  regulation,  then, 
you  have  no  objection  to  this  bill? 

Mr.  Knox.  None  whatever  on  that  point. 

Mr.  Byrnes.  I  am  sorry  if  I  caused  you  to  lose  the  thread  of  your 
remarks.  When  I  interrupted  you  you  were  going  to  say  as  to 
w^here  he  would  get  his  tonnage,  which  is  another  question. 

Mr.  Knox.  Mind  you,  I  am  not  discussing  the  question  on  the  basis 
of  present  conditions.  The  mildest  term  I  can  apply  to  that  is  that 
it  would  be  impossible;  our  commerce  is  suffering  from  a  lack  of 
ships.  We,  as  a  Nation,  are  primarily  responsible  for  that  condi- 
tion. We  should  perhaps  confine  our  attention  to  normal  conditions 
which  we  will  assume  will  exist  at  the  close  of  the  war.  Every  indi- 
cation points  to  the  fact  that  this  country,  as  it  undoubtedly  is  to- 
day, will  for  a  number  of  years  after  the  cessation  of  hostilities  in 
Europe,  be  the  largest  producer  of  raw  material  in  the  world.  The 
greatest  bulk  of  the  ocean-borne  commerce  is  going  to  be  moved 


530     SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

eastward  and  westward  from  our  Pacific  and  Atlantic  coasts.  The 
demands  for  what  this  country  can  produce  in  the  way  of  raw  ma- 
terial it  is  simply  impossible  perhaps  to  predicate.  We  recognize 
now  the  tremendous  volume  of  trade  that  is  coming  to  this  country 
without  any  preparation  of  any  kind  for  its  ocean-borne  carriage. 

Mr.  Byrnes.  Let  me  ask  you  this:  That  being  so,  if  it  is  impos- 
sible to  pass  a  bill  through  this  Congress  granting  a  subsidy,  are 
you  opposed  to  us  taking  the  step  provided  for  in  this  bill  ? 

Mr.  Knox.  Except  that  I  do  not  see  how  it  affords  any  relief. 

Mr.  Byrnes.  The  idea  is  that  you  would  rather  have  nothing  done 
than  to  have  this  bill  passed? 

Mr.  Knox,  No  ;  my  idea  would  be  that  the  Government  would  find 
the  means  to  provide  the  business  men  of  this  country  with  reason- 
ably cheap  money,  under  proper  safeguarded  securities,  and  let  busi- 
ness men  go  into  the  business  of  building  ships,  and  constructing 
shipyards  and  going  into  the  steamship  business,  just  as  we  go  into 
a  manufacturing  proposition.  I  contend  that  the  results  to  be 
obtained  by  individual  enterprise  using  such  funds  would  be  vastly 
more  productive  in  the  way  of  increased  tonnage  facilities  than 
Oovernment  navigation,  operation,  or  ownership  could  ever  produce. 
When  I  have  the  backing  of  this  country  and  as  a  shipper  know  that 
a  combination  of  business  men  in  the  same  line  as  myself  can  put  up 
50  per  cent  of  the  cost  of  a  vessel  or  of  a  fleet  of  vessels  and  obtain 
the  necessary  extra  capital  from  the  Government  at  a  reasonable 
rate,  I  then  say  that  is  a  principle  which  will  increase  the  tonnage  of 
this  country,  because  I  am  providing  the  cargo. 

Mr.  Byrnes.  That  is  all  right. 

Mr.  Knox.  I  have  my  markets  now,  but  I  am  dependent  upon  get- 
ting steamships  and  freights,  Avhether  they  be  German,  French,  Ital- 
ian, English,  or  any  other  nationality^  of  the  world.  And  before  the 
outbreak  of  this  war,  permit  me  to  say,  we  were  being  very  well 
served;  there  was  no  great  scarcitj^  of  tonnage  then,  and  we  assume 
there  will  be  no  great  scarcity  of  tonnage  after  this  war  is  over — 
not  to  such  an  extent  as  we  are  suffering  to-day.  But  if  we  attempt 
in  this  country  to  put  any  restrictions  upon  the  coming  to  our  shores 
of  foreign-owned  tonnage,  if  we  make  our  rates  on  such  a  basis 
and  surround  the  operation  of  foreign-owned  tonnage  with  restric- 
tions that  would  be  onerous,  we  are  going  to  drive  that  great  volume 
of  foreign-owned  tonnage  into  traffic  between  their  own  countries  and 
foreign  markets  of  the  world,  and  they  will  be  doing  it  at  lower 
rates  of  freight  than  we  could  ever  touch. 

Mr.  Byrnes  What  do  you  pay  for  capital  to-day?  What  interest 
are  you  paying,  or  shipbuilding  men  investing  in  the  building  of 
ships — what  would  they  have  to  pay,  approximately  ? 

Mr.  Knox.  I  dare  say  5  per  cent. 

Mr.  Byrnes.  Do  3^ou  not  know  that  the  farmers  of  the  West  and 
the  farmers  in  Texas  are  paying  10  and  12  per  cent  interest,  and  they 
want  Congress  to  make  an  arrangement  to  lend  them  money  at  a 
cheaper  rate;  and  if  we  were  to  lend  money  to  build  ships,  cheap 
money,  we  have  got  to  lend  it  to  the  farmers  and  to  most  of  the 
cotton  growers  in  the  South? 

Mr.  Knox.  What  is  the  difference  between  that  and  spending 
$50,000,000? 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      531 

Mr.  Byrnes.  We  do  not  propose  to  go  out  and  raise  all  of  the  cot- 
ton and  grain  in  the  country. 

Mr.  Knox.  The  point  I  make  is  if  this  $50,000,000  can  be  used  as 
a  nucleus  for  a  fund  to  develop  the  American  merchant  marine 
which  will  have  three  times  the  tonnage  available  for  that  purpose, 
and  instead  of  having  500,000  tons  we  would  have  a  million  and  a 
half  tons 

Mr.  Byrnes.  Your  idea  is  to  lend  this  $50,000,000  ? 

Mr.  Knox.  To  lend  that  money  to  the  men  who  know  how  to 
use  it.  I  do  not  ask  you  to  give  it  to  them,  but  I  ask  you  to  lend  it 
to  them,  safeguarded  in  any  manner  that  a  mortgager  would 
demand. 

Mr,  Loud.  And  it  would  provide  auxiliaries  for  the  Army  and 
Navy? 

Mr.  Knox.  I  am  in  favor  of  that. 

Mr.  Loud.  If  it  did  that,  that  would  be  an  answer  to  the  question 
about  the  farmers? 

Mr.  Knox.  When  we  talked  about  the  construction  of  a  conti- 
nental line  of  railroad  in  this  country  the  Government  loaned  the 
money  to  build  that  road,  and  the  farmers  were  the  beneficiaries 
thereby.  But  I  do  not  know  of  any  farmer  in  this  country,  Mr. 
Byrnes,  paying  10  or  12  per  cent  for  his  money. 

Mr.  Byrnes.  Oh,  Lord,  yes.  We  know  of  them.  I  know  in  my 
country  it  is  not  as  bad.  And  not  only  the  farmers,  but  did  you 
not  read  the  report  of  the  Comptroller  of  the  Currency  showing 
that  the  national  banks  of  the  country — I  am  glad  to  say  not  in  my 
State — are  charging  30  per  cent?  Down  in  Texas  and  in  the  West 
they  are  paying  10  and  12,  and  it  is  common  in  my  State,  although 
we  are  a  little  bit  better  off,  to  pay  8,  and  you  can  loan  $500,000 
down  there  on  gilt-edge  securities. 

Mr.  Knox.  All  right,  then;  apply  the  same  principle  to  the  use 
of  that  money  you  applied  to  the  use  of  the  money  in  the  railroad 
construction. 

The  Chairman.  I  do  not  think  we  are  getting  anywhere  with 
that  discussion.  Of  course,  if  we  are  going  to  loan  to  the  ship- 
owners at  3  per  cent  everybody  will  want  money  at  3  per  cent,  and 
we  will  have  to  play  the  game  fair. 

Mr.  Loud.  I  just  want  to  ask  one  question.  As  part  answer  to 
the  inquiry  of  Mr.  Byrnes,  if  the  money  were  loaned  for  the  build- 
ing of  the  ships,  it  would  be  loaned  upon  such  ships  to  be  used  as 
auxiliaries  for  the  Army  and  Navy,  would  it  not,  ships  that  were 
suitable  for  that  purpose? 

Mr.  Knox.  That  would  necessarily  come  within  the  proviso. 

Mr.  Loud.  They  would  have  to  do  so,  necessarily,  to  get  the  loan? 

Mr.  Knox.  Yes. 

Mr.  Loud.  Then  there  is  an  answer  to  the  question.  You  get  the 
auxiliaries  for  that  loan,  but  in  the  case  of  the  farmer  you  wol^ld 
not  get  anything. 

Mr.  Byrnes.  You  would  get  something  to  eat. 

The  Chairman.  Let  us  not  discuss  that  question  any  moi-e.  It 
may  be  desirable,  but  it  is  a  very  dangerous  precedent. 


532      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

STATEMENT  OF  MR.  HARRIS  CHILDS,   OF  NEW  YORK,  EXPORT 
AND  IMPORT  MERCHANT. 

Mr.  Childs.  All  I  have  to  say  is  that  it  seems  terribly  hard  to 
start  in  the  business.  And  there  is  no  doubt  about  it  that  we  want 
some  relief  in  our  particular  business  of  selling  American  products 
and  American  manufactures  abroad.  I  have  sold  cotton  goods  and 
bought  products  from  the  negroes  of  Africa  for  the  last  20  j^ears; 
and  all  I  have  ever  asked  in  m}'  business  was  an  even  break.  I  never 
was  afraid  of  any  foreign  competition.  The  only  thing  that  ever 
worried  me  in  my  business  was  when  some  Yankee  got  into  my  par- 
ticular bailiwick. 

While  we  need  relief,  and  we  need  it  very  badly,  I  think  that  up 
to  the  present  time  we  have  had  a  fair  break.  But  my  friends  in  the 
shipping  business  here  have  jacked  up  the  price  of  freights  in  this 
last  year  from  $5  a  ton  to  $50  because  they  could  get  it.  I  was  free 
to  go  anywhere  and  find  some  philanthropist  to  take  my  freight  and 
to  save  me  a  few  dollars,  and  I  squirmed  and  wiggled,  but  I  could 
not  get  away  from  it. 

It  strikes  me  that  we  have  two  propositions  of  relief  on  the  table. 
I  think  any  man  who  would  prophesy  that  either  one  of  them  was 
perfect  would  come  into  the  position  of  a  prophet.  All  I  can  say 
is  that  wdiile  I  Avas  glad  to  hear  of  the  reincarnation  of  a  great 
shipping  man  this  morning  and  in  his  reincarnation  he  took  the  guise 
of  a  patriot,  I  would  not  feel  like  offering  to  take  any  part  of  his 
100,000  tons  off  his  hands,  and  I  do  not  believe  he  would  get  many 
business  men,  bankers,  or  shippers  to  go  in  with  him. 

I  think  the  desire  and  aim  and  hope  of  every  merchant  and  ex- 
porter of  goods  from  this  or  any  other  country  is  to  own  a  little 
ship.  I  would  like  to  own  a  ship.  And  I  think  if  the  second  bill 
were  put  through  and  the  Government  could  put  me  in  a  position 
to  have  an  even  break  with  the  foreigners  that  I  could  get  some  of 
my  friends  that  I  have,  not  only  in  this  room  but  in  other  places,  to 
go  into  that  business  with  me. 

I  have  only  one  comment  to  make  upon  your  bill,  sir,  and  that  is 
the  one  point  that  has  not  been  taken  up.  That  is  the  important 
part  that  annoys,  the  red  tape  or  anything  placed  on  business. 
Hitherto  when  we  have  had  to  charter  ships  coming  to  American 
ports  they  have  charged  us  a  certain  percentage  over  the  European 
rates  for  the  distance  and  for  the  particular  kind  of  tonnage,  and 
they  have  charged  us  a  little  more  for  the  annoyance  that  they  get 
from  our  port  dues  and  from  the  general  red  tape  and  apparent 
antagonism  to  foreign  bottoms.  I  think  it  is  a  very  important  thing; 
and  I  think,  perhaps,  the  functions  of  a  shipping  board  might  very 
well  enter  into  a  study  of  making  things  easier  for  the  shipping 
people.  And  w^hen  I  say  that  we  want  an  even  break,  the  whole 
thing  comes  on  the  shipper  after  all.  If  the  freights  are  going  in 
competition  with  Argentina  and  the  manufacturers  of  our  cotton 
goods  are  going  in  competition  with  Lancashire  or  India,  we  want 
to  get  our  freights  in  the  cheapest  market,  and  I  believe  that  the 
patriot  to  whom  I  referred  before  did  not  deny  that  he  had  a  couple 
of  ships  now  under  the  British  flag.  I  think  he  still  has  them  under 
that  registry.  He  is  not  altogether  so  patriotic  that  he  wants  to 
forego  that  privilege. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      533 

I  do  not  know  that  I  can  say  anything  more. 

Mr.  Byrnes.  Do  you  have  any  trouble  now  in  getting  bottoms  to 
transport  your  cotton  goods  that  you  have  been  exporting  ? 

Mr.  Childs.  Oh,  yes;  the  difference  between  $5  and  $50. 

Mr.  Byrnes.  Can  you  get  bottoms  at  $50? 

Mr.  Guilds.  Yes;  we  can  get  bottoms  at  $50,  but  we  do  not  want 
them. 

Mr.  Byrnes.  You  do  not ?     Why  ? 

Mr.  Guilds.  Because  we  can  not  get  rid  of  our  stuff. 

Mr.  Byrnes.  Because  you  can  not  compete? 

Mr.  Ghilds.  The  people  simply  won't  buy  the  stuff  if  they  have  to 
pay  too  much  for  it. 

Mr.  Byrnes.  Which  is  the  trouble;  j^ou  can  not  compete  or  the 
people  won't  buy  by  reason  of  the  increased  charges? 

Mr.  Guilds.  Both.  We  can  not  compete  with  other  sources  of 
supply  and  the  people  will  not  pay  the  prices. 

Mr.  By'rnes.  What  countries  would  you  compete  with  now  with 
whom  you  can  not  compete  ? 

Mr.  Ghilds.  We  compete  with  India.  India  manufactures  a  lot 
of  cotton,  and  we  compete  with  Lancashire,  and  Lancashire  manu- 
factures a  lot  of  cotton  goods. 

Mr.  Byrnes.  Is  not  the  difficulty  in  competing  the  high  charges? 

Mr.  Guilds.  I  beg  your  pardon, 

Mr.  By'rnes.  They  are  not  bound  to  pay  these  increased  charges 
and  they  can  undersell  you,  and  therefore  you  are  out  of  the  business? 

Mr.  Ghilds.  Yes,  sir. 

STATEMENT  OF  MR.  WILLIAM  E.  PECK,  104  PEARL  STREET,  NEW 
YORK,  PRESIDENT  OF  WILLIAM  E.  PECK  &  CO.,  IMPORTERS 
AND  EXPORTERS. 

Mr.  Peck.  Mr.  Ghairman  and  gentlemen,  so  much  has  already 
been  said  on  this  question  that  there  is  little  or  nothing  more  that  I 
can  say  at  the  present  time. 

Last  year  the  export  houses  in  New  York  had  probably  the  most 
prosperous  year  in  their  history.  And  although  the  outlook  in 
January  was  extremely  hazy,  conditions  are  changing  so  rapidly 
in  the  last  few  weeks  that  the  outlook  to-day  is  very  dark  and  dreary. 

The  recent  destruction  of  more  vessels  has  emphasized  more  than 
ever  the  trouble  we  are  up  against  for  tonnage.  We  realize  that 
men  w^ho  charter  ships  at  high  prices  must  charge  correspondingly 
high  prices;  but  at  the  same  time  these  high  rates  of  freight  are 
practically  killing  the  export  business  in  many  of  the  staple  lines. 
Where  we  paid  $3  a  ton,  for  instance,  before  the  war,  for  steel  from 
New  York  to  Buenos  Aires,  we  are  paying  now  $20  to  $30 — ten  times 
the  amount.  And,  of  course,  the  only  result  of  these  high  freights 
is  to  discourage  the  importation  of  American  goods  and  gradually 
the  orders  cease  to  come  in  by  cable,  first  from  one  line  and  then 
from  another  line.  And  although  we  are  not  going  to  feel  this  very 
much  until  after  July  1,  because  nearly  all  staples  are  sold  through 
advance  sales,  we  are  going  to  feel  it  very  seriously  after  that  date. 
And  as  I  have  already  remarked,  the  shortage  of  tonnage  is  a  very 
serious  factor  and  therefore  we  would  welcome  any  bill — that  is,  I 


534      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

speak  for  the  shippers — that  would  rectify  in  any  quick  way  the 
trouble  that  we  are  up  against. 

Mr.  Gibboney  this  morning  spoke  of  the  tremendous  profits  that 
the  American  ship  owners  are  making.  If  that  is  so  it  would  seem 
that  it  was  not  necessary  to  discuss  the  Alexander  bill  at  all,  because 
it  would  seem  that  the  quick-get-rich  capital  of  this  country  would 
have  already  seized  all  of  the  vessels  available  and  placed  orders  in 
the  shipyards  for  new  ships.  But  that  is  not  the  trouble.  The 
trouble  is  the  awful  shortage  of  tonnage,  and,  therefore,  I  say  we 
favor  any  bill  that  will  rectify  and  remedy  the  conditions  which 
exist.  We  favor  certain  parts  of  the  Alexander  bill;  also  parts  of 
the  chamber  of  commerce  bill.  Especially  do  we  favor  a  shipping 
board.  I  personally  appeared  two  or  three  times  before  the  British 
Board  of  Trade.  I  had  them  rectify  an  abuse  which  I  encountered 
in  New  York  in  connection  with  shipping  in  our  English  vesels. 
I  found  the  British  Board  of  Trade  very  fair-minded,  and  I  am 
quite  positive  a  shipping  board,  that  would  be  organized  in  this 
country  under  the  Alexander  bill,  or  any  other  bill,  would  be  equally 
fair,  and  all  of  the  shippers  are  desirous  of  having  such  a  shipping 
board. 

The  Chairman.  The  shipping  board  would  be  a  useless  arrange- 
ment just  now  unless  we  had  the  ships,  would  it  not? 

Mr.  Peck.  Yes.  I  do  not  see  how  any  particular  bill  could  rectify 
the  conditions  that  exist  very  quickly.  It  looks  as  though  we  have 
to  suffer  and  to  get  along  as  best  w^e  can  for  the  next  three  or  four 
years. 

The  Chairman.  Would  you  advise  a  beginning? 

Mr.  Peck.  I  do.  I  advise  a  beginning  of  some  kind.  It  can  not 
come  too  quickly. 

Gentlemen,  I  thank  you. 

The  Chairman.  That  was  my  notion,  that  any  rational  man 
would  think  it  advisable. 

STATEMENT   OF  MR.   EDGAR  F-   LTJCKENBACH,   44   WHITEHALL 
STREET,  NEW  YORK,  SHIP  OWNER  AND  OPERATOR. 

Mr.  Luckenbach.  To-day  I  own  about  100,000  tons  of  American 
bhips  and  I  am  building  78,000.  After  reading  over  this  bill  I  am 
sorry  I  own  so  much.  From  Avhat  I  read  in  the  bill,  anyone  can 
come  in  if  you  pass  the  bill,  and  get  Government  aid  and  assistance 
i\nd  run  me  out  of  business.  I  am  in  a  tramp  business  and  I  also 
run  a  regular  line,  and  if  I  understand  the  bill  correctly,  in  the 
regular  line  they  would  give  him  the  same  privilege  as  I  have;  that 
is,  of  running  in  the  coastwise  trade. 

The  Chairman.  Where  is  your  regular  line  running? 

IVIr.  Luckenbach.  From  "New  York  to  San  Francisco. 

The  Chairman.  For  how  long? 

Mr.  Luckenback.  About  how  long  have  we  been  operating? 

The  Chairman.  Yes. 

Mr.  Luckenbach.  We  have  been  operating  a  direct  service  through 
the  canal  ever  since  it  opened.  Previous  to  that  we  were  cocarriers 
with  the  United  States  Government-owned  Panama  Steamship  Co., 
carrying  on  the  Pacific  while  they  carried  on  the  Atlantic. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      535 

According  to  the  terms  and  conditions  of  this  bill  anyone  can 
come  in  if  they  will  satisfy  the  Government  or  the  board  and  operate 
to  Hawaii,  Alaska,  and  other  coastwise  ports. 

The  Chairman.  That  is  the  American-built  ships? 

Mr.  LucKENBACH.  Ycs.  I  do  not  know  why  we  should  get  a 
spanking.  Have  we  raised  the  rates,  or  what  is  the  object  of  doing 
this? 

The  Chairman.  Are  you  opposed  to  American-built  ships  being 
used  in  the  coastwise  trade  in  competition  with  your  foreign-built 
ships? 

Mr.  LuCKENBACH.  Foreign  built? 

The  Chairman.  Yes.  You  have  some  that  were  admitted  to 
American  registry  under  special  act,  have  you  not? 

Mr.  LuCKENBACH.  Ycs ;  but  I  just  told  you  I  am  now  building 
78,000  tons  in  American  shipyards. 

The  Chairman.  I  think  you  have  been  before  this  committee 
more  often  than  anybody  else  to  get  foreign-built  ships  admitted  to 
American  registry,  have  you  not? 

Mr.  LuCKENBACH.  I  liave  not. 

The  Chairman.  You  have  been  before  the  committee,  have  you 
not? 

Mr.  LuCKENBACH.  Yes ;  once. 

The  Chairman.  Are  j^ou  opposed  to  an  American-built  ship  being 
used  in  the  coastwise  trade  ? 

Mr.  LuCKENBACH.  Docs  this  bill  say  that? 

The  Chairman.  I  do  not  care  whether  you  build  them  or  somebody 
else  builds  them,  because  the  other  fellow  has  just  as  much  right  to 
build  those  ships  and  to  run  them.    But  you  want  it  all. 

Mr.  LuCKENBACH.  No.  If  I  unders^iind  the  bill  correctly,  it  says 
here  that  you  can  charter  vessels.  It  does  not  say  that  you  are  going 
to  charter  American  vessels.  You  say  this,  that  you  can  charter  ves- 
sels or  you  can  purchase  vessels. 

Mr.  Byrnes.  Where  are  3^011  reading  now? 

Mr.  LuCKENBACH.  It  does  not  say  you  are  going  to  charter  Ameri- 
can vessels  to  run  in  this  trade,  but  you  are  going  to  charter  foreign 
vessels  and  put  them  in  the  coastwise  trade. 

Mr.  Byrnes.  From  what  section  of  the  bill  are  you  reading,  so  as 
to  direct  our  attention  to  it? 

Mr.  LuCKENBACH.  Scctiou  3.  This  is  what  you  say  in  section  3. 
If  I  am  wrong,  just  correct  me,  please: 

That  the  United  States,  through  the  hoard  and  with  the  approval  of  the 
President,  is  authorized  to  construct  in  American  shipyards  and  navy  yards, 
as  their  capacity  will  permit,  or  elsewhere,  or  to  purchase  or  charter  vessels — 

Is  that  right? 

The  Chairman.  You  are  reading  from  section  3? 

Mr.  LuCKENBACH.  Ycs. 

The  Chairman.  Just  as  long  as  you  stick  to  the  text  you  are  all 
right. 

Mr.  LuCKENBACH.  Docs  not  that  mean  you  can  charter  foreign 
vessels  ? 

The  Chairman.  No,  sir. 

Mr.  LuCKENBACH.  Then  I  am  on  the  wrong  track.  Does  it  not 
mean  you  can  build  foreign  vessels? 


536     SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARI>iE, 

The  Chairman.  They  can  have  vessels  built  abroad  or  they  can 
have  them  built  in  American  shipyards.  If  foreign  built,  they  can 
only  be  used  in  the  foreign  trade. 

Mr.  LucKENBACH.  Where  does  it  say  that? 

The  Chairman.  In  sections  3  and  4. 

Mr.  LuGKENBACH.  Tliis  is  the  privilege  you  give  them. 

The  Chairman.  There  is  a  proviso  here. 

Mr.  Byrnes.  In  section  4 — — 

Mr.  LucKENBACH.  Wait  a  moment;  wait  until  we  finish  section  3, 
line  12.  Is  not  that  a  privilege  you  give  them  in  line  12  ?  On  line 
10  you  say 

The  Chairman.  Let  us  get  that  straight,  because  I  do  not  want  tO' 
mislead  you.  These  foreign-built  ships  may  be  utilized  in  the  foreign 
trade  and  in  the  trade  with  Alaska,  the  Panama  Canal  Zone,  the 
Philippine  Islands,  the  Hawaiian  Islands,  and  the  islands  of  Porto 
Rico,  Guam,  and  Tutuila. 

Mr.  LucKENBACH.  Is  iiot  that  the  coastwise  trade? 

The  Chairman.  That  is  true  to  that  extent. 

Mr.  LucKENBACH.  I  tliought  that  was  right.  Then  my  contention 
was  right. 

The  Chairman.  That  far ;  yes. 

Mr.  Byrnes.  Part  of  it  is  right  and  part  of  it  is  wrong. 

The  Chairman.  You  trade  through  the  canal  to  the  Pacific  coast, 
and  in  that  trade  you  said  they  would  come  in  competition  with  you. 

Mr.  LucKENBACH.  Dou't  I  run  to  Porto  Rico  sometimes?  I  run 
to  Porto  Rico. 

The  Chairman.  You  have  not  said  so  yet. 

Mr.  LucKENBACH.  I  do.  I  have  a  tramp  service.  I  run  every- 
where. And  then  these  foreign  boats  could  come  in  and  compete 
with  me  with  the  boats  I  am  building  in  American  shipyards  at 
$100  a  ton. 

The  Chairman.  We  are  building  foreign  tonnage  in  the  American 
shipyards  just  now  because  we  can  build  it  cheaper  here  than  they 
can  abroad;  so  that  I  do  not  see  where  you  are  prejudiced  here  if 
conditions  continue. 

Mr.  LucKENBACH.  That  is  for  the  present. 

The  Chairman.  Yes. 

Mr.  LucKENBACH.  But  these  ships,  I  think,  will  last  for  some  years 
to  come,  and  so  will  your  bill. 

The  Chairman.  Some  one  expressed  the  opinion  that  ships  in  years 
to  come  can  be  built  more  cheaply  here  than  abroad. 

Mr.  LucKENBACH.  That  is  their  idea.  I  do  not  think  so.  Vessels 
under  the  American  flag  that  come  in  under  the  Panama  Canal  act, 
are  you  going  to  give  them  this  coastwise  privilege? 

The  Chairman.  Which  vessels? 

Mr.  LucKENBACH.  Vcsscls  that  come  under  the  American  flag 
under  the  Panama  Canal  act. 

The  Chairman.  No. 

Mr.  LucKENBACH.  All  right;  that  will  straighten  that  out. 

The  Chairman.  I  will  give  you  my  personal  view  of  the  bill,  if 
you  want  me  to :  I  have  never  yet  favored  the  admission  of  foreign- 
built  ships  to  American  registry  for  the  coastwise  trade.  As  far  as  I 
would  be  willing  to  admit  them  to  participate  would  be,  for  instance, 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      537 

in  going  from  New  York  through  the  Pananica  Canal  to  the  Far  East, 
trading  to  the  Pacific  coast  or  to  Hawaii,  and  then  on  making  that  a 
leg  of  their  journey.  I  have  not  given  my  consent  to  that,  but  that 
is  as  far  as  I  would  care  to  go  at  any  rate.  And  in  the  same  way, 
if  a  vessel  traded  from  New  York  to  South  America,  carrying  pas- 
sengers and  freight  to  and  from  Porto  Eico  as  an  incident  to  that 
voyage. 

Mr.  LucKENBACH.  Yes ;  and  you  would  give  the  foreign  vessel  the 
privilege  to  Porto  Rico  ? 

The  Chairman.  Foreign  built. 

Mr.  LucKENBACH.  Yes ;  you  would  give  him  that. 

The  Chairman.  Owned  by  American  citizens.  I  think  that  is  as 
far  as  I  would  be  willing  to  go. 

Mr.  LucKENBACH.  Yes ;  but  the  rates  have  not  been  raised  to  Porto 
Rico.  Why  punish  the  Porto  Rico  Steamship  Co.  that  have  built 
boats  here?    There  is  no  scarcity  of  tonnage. 

The  Chairman.  I  had  better  have  a  talk  with  Mr.  Bull  about  that ; 
I  have  not  heard  from  him  for  some  time. 

Mr.  Byrnes.  You  say  that  your  boats  run  to  Porto  Rico;  is  that 
a  regular  service? 

Mr.  LucKENBACH.  No ;  we  do  not  run  a  regular  service  to  Porto 
Rico:  it  is  a  tramp  service.  Only  recently,  only  this  year,  have  we 
had  the  San  Francisco  service,  and  that  is  the  reason  we  are  building 
the  boats,  to  put  them  in  this  service.  And  I  want  to  find  out  if  my 
foreign  friends  can  come  in  with  the  boats  they  have  at  the  present 
time  and  be  extended  the  privilege  of  Porto  Rico,  the  Philippine 
Islands,  Hawaii,  and  Alaska. 

I  want  to  object  to  anj'^  cabinet  officers  becoming  members  of  this 
shipping  board,  because  they  are  overworked  at  present.  I  tried 
to  get  an  audience  with  Secretary  Garrison  and  was  refused,  and 
also  another  man.  Avhen  the  Panama  Canal  Co.,  or  when  the  Govern- 
ment raised  the  rates  from  $3  to  $8  a  ton,  and  it  cost  us  $1  50  and 
jiut  me  out  of  business.  So  I  have  had  some  experience  with  Gov- 
ernment men. 

The  Chair:man.  I  expect  the  experience  was  mutual. 

Mr.  LucKENBACH.  It  certainly  is:  there  were  two  of  us  there. 

The  Chairman.  Of  course,  I  do  not  mean  this  offensively;  you 
understand  that. 

Mr.  LucKENBACH.  Now,  as  to  Government  operation.  I  want  to 
talk  about  that  for  a  few  moments.  I  had  the  experience  of  operat- 
ing with  the  Panama  Steamship  Cof,  which  claims  that  last  year 
they  made  $305,000,  and  it  points  with  pride  to  the  fact  that  they 
made  $305,000.  And  in  this  year's  report  they  say  that  they  made 
$500,000.  I  want  to  show  you  how  they  made  it;  how  impossible  it 
would  be  for  you  to  make  it,  or  for  any  other  man  to  make  it.  I  will 
show  you  about  the  way  a  good  many  Government  institutions  are 
run  and,  possibly,  how  this  shipping  board  might  run  the  ships 
that  they  purchased  in  the  same  manner. 

They  own  two  ships.  According  to  their  book  value  they  are 
worth  $764,000.  The  Government  loaned  to  them  four  ships  which 
cost  just  about  $3,100,000.  They  loaned  those.  The  Panama  Steam- 
ship Co.  operates  them  free  of  charter  hire.    AVe  will  be  fair  and  say 


538      SHIPPING  BOARD,  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE. 

the  rate  for  charter  hire  last  year  was  $5  per  dead-weight  ton  per 
month.  If  3^ou  were  operating  the  line  that  is  about  what  you  would 
have  to  pay  for  those  vessels  this  past  year.  And  they  would  have 
cost  you  $1,832,000.  This  the  Government  gives  to  the  Panama 
Steamship  Co.  It  won't  give  it  to  you,  and  it  won't  give  it  to  me, 
but  they  give  it  to  the  Panama  Steamship  Co. 

On  the  two  vessels  that  they  own  they  figure  depreciation  at  6  per 
cent,  but  on  the  $3,100,000  worth  of  ships  they  do  not  pay  one  cent 
of  depreciation.  They  do  not  pay  any  interest  charges;  they  do  not 
pay  any  insurance  charges.  It  would  cost  you  or  I,  or  anyone  else 
who  wanted  to  run  one  of  those  vessels,  for  insurance,  depreciation, 
and  interest  about  17  per  cent,  which  is  given  to  the  Government- 
owned  institution. 

With  this  gift  last  year  they  made  $305,000.    Wonderful  work ! 

The  Chairman.  How  were  those  charges  met?  Who  insured  the 
ships,  and  who  paid  for  that? 

Mr.  LucKENBACH.  No  one  except  the  United  States  Government. 

The  Chairman.  Did  not  the  Government  insure  them? 

Mr.   LuCKENBACH.    No. 

The  Chairman.  They  were  not  insured  at  all? 

Mr.  Luckenbach.  No. 

The  Chairman.  What  ships  are  those? 

Mr.  Luckenbach.  The  Colon^  the  Panama^  the  Cristobal^  and  the 
Ancon. 

The  Chairman.  You  say  they  were  not  insured  at  all? 

Mr.  Luckenbach.  No  insurance  whatsoever.  The  interest  on  these 
vessels,  at  6  per  cent,  together  with  the  insurance,  rental  of  termi- 
nals, and  depreciation,  amounted  to  about  $2,974,000.  Their  total 
revenues  were  $2,642,457.10.    The  deficit  is  $332,363. 

The  Chairman.  These  ships  carried  Government  freight  in  con- 
hection  with  the  building  of  the  Panama  Railroad,  did  they  not  ? 

Mr.  Luckenbach.  They  did,  until  the  opening  of  the  canal;  yes. 

The  Chairman.  And  supplies  for  the  Canal  Zone? 

Mr.  Luckenbach.  The  amount  of  supplies  for  the  canal  has  been 
very  small  since  the  opening  of  the  canal. 

The  Chairman.  And  the  tonnage  they  carried  for  the  Govern- 
ment— for  the  Panama  Canal — was  carried  at  nominal  rates,  was  it 
not? 

Mr.  Luckenbach.  Yes. 

The  Chairman.  If  they  had  charged  the  rates  in  effect  before 
those  ships  were  put  on,  they  could  very  well  have  paid  all  of  these 
charges  that  you  have  in  mind  and  made  a  handsome  profit,  could 
they  not? 

Mr.  Luckenbach.  Yes. 

The  Chairman.  Then  the  Government  is  ahead  on  that  transac- 
tion even  if  it  has  not  made  any  profit  on  those  ships.  That  is  true, 
is  it  not? 

Mr.  Luckenbach.  Yes;  that  is  true. 

I  do  not  know  of  any  objection,  gentlemen,  that  I  want  to  put  in, 
except  to  this  coastwise  trade  and  the  operation  of  the  steamers  by 
the  Government. 

I  thank  you  for  your  attention. 


SIEIPPING  BOABD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      539 


STATEMENT  OF  MR.  JAMES  BARBER,  OF  NEW  YORK,  N.  Y.,  PRESI- 
DENT OF  THE  BARBER  STEAMSHIP  CO. 

Mr.  Barber.  Mr.  Chairman,  I  do  not  wish  to  say  very  much.  T 
did  not  expect  to  be  called  upon,  for  one  thing,  so  that  I  am  liable 
to  be  brief. 

I  am  very  much  in  sympathy  with  the  objects  sought  to  be  ob- 
tained by  this  bill — the  increase  of  the  American  merchant 
marine.  At  the  same  time  I  have  some  doubts  about  the  possibility 
of  some  of  its  provisions.  I  think  all  that  I  could  say  on  those  points 
has  already  been  covered  by  the  previous  speakers,  so  that  I  need 
hardly  repeat  that. 

My  own  personal  idea  has  been  for  years  that  the  American  mer- 
chant marine  would  have  developed  much  more  than  it  has  if  it  had 
been  free  from  the  onerous  restrictions  and  some  of  the  provisions 
in  the  navigation  laws  which  it  has  to  contend  with.  I  think  there  is 
sufficient  enterprise  in  the  American  business  man  to  invest  in  Ameri- 
can shipping  if  he  thought  he  had  an  equal  chance  with  the  foreign- 
controlled  vessels  that  come  here.  In  my  own  business  we  have 
necessity  to  charter  quite  a  number  of  foreign  vessels,  and  since  the 
passage  of  this  bill  last  year,  which  allowed  foreign-built  vessels  to 
come  under  American  registry,  we  have  availed  ourselves  of  that 
privilege  and  placed  five  of  our  steamers  under  the  American  flag. 
We  are  also  buying  other  American  steamers  and  are  building  one. 

At  the  same  time  we  are  very  much  in  hopes  that  this  board,  when 
it  is  appointed,  will  give  serious  consideration  to  the  points  in  the 
existing  laws  that  work  to  the  disadvantage  of  the  American  ship- 
owner. My  own  feeling  is,  and  I  think  you  apparently  agree  with 
the  idea,  that  all  such  points  should  be  toned  down  and  made  to 
work  so  that  the  American  shipowner  would  not  be  under  any  great' 
disadvantage  compared  with  the  foreign  shipowners. 

Mr.  Byrnes.  Mr.  Barber,  what  have  you  in  mind  in  saying  that? 

Mr.  Barber.  It  has  been  referred  to  as  the  extra  cost  of  operation 
caused  by  the  necessity  of  complying  with  the  American  regulations, 

Mr.  Byrnes.  What  regulations? 

Mr.  Barber.  As  contained  in  the  navigation  laws,  with  regard  to 
the  officers  and  seamen. 

Mr.  Byrnes.  As  to  what  ? 

Mr.  Barber.  The  nationality  of  the  officers,  the  seamen  and  engi- 
neers, the  accommodations  and  the  food  scale.  I  do  not  begrudge 
them  the  food  scale.     I  would  be  very  glad  to  have  it  as  it  is. 

Mr.  Byrnes.  Do  you  favor  foreign  officers? 

Mr.  Barber.  If  necessary.  The  point  is  you  have  not  enough 
American  officers  and  engineers  now  to  man  your  ships. 

Mr.  Byrnes.  Do  you  think  it  would  contribute  to  the  building  up 
of  an  American  merchant  marine  which  would  be  of  any  service  in 
time  of  war  if  you  had  foreign  officers? 

Mr.  Barber.  I  should  certainly  favor  having  schools  of  navigation 
and  the  encouragement  of  apprenticeship  and  the  training  of  men 
to  become  officers. 

Mr.  Byrnes.  Do  you  know  that  is  provided  for  in  this  bill:  that 
this  bill  seeks  to  encourage  that? 


540     SHIPPING  BOARD,  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Barber.  I  believe  there  is  some  attempt  at  it. 

Mr.  Byrnes.  You  favor  that  feature  of  this  bill,  then  ? 

Mr.  Barber.  I  do. 

Mr.  Bruckner.  WHiere  does  your  line  operate,  Mr.  Barber? 

Mr.  Barber.  I  think  the  largest  present  operation  is  to  the  River 
Plata  in  Argentina.  We  also  run  to  China  and  Japan.  We  are 
agents  for  South  African  lines,  and  we  have  a  line  running  to  French 
ports,  and  then  we  have  quite  a  number  of  steamers  engaged  in  gen- 
eral trades  which  go  wherever  the  best  market  demands  them. 

As  far  as  the  bill  is  concerned,  I  have  the  same  objection  as  the 
previous  speakers  to  the  Government  operation  of  Government- 
owned  steamers.  If  they  are  built  to  be  of  service  to  the  Army  and 
the  Navy  as  auxiliaries.  I  think  that  would  be  a  very  desirable  thing; 
and  if  they  could  be  so  constructed  as  to  be  available  for  commercial 
purposes  and  leased  to  the  general  shipping  interests  which  might  be 
able  to  use  them.  I  think  that  would  obviate  the  possibility  of  their 
coming  into  competition  directly  with  privately  owned  steamers. 

Mr.  Byrnes.  That  is  in  the  bill,  and  you  are  in  favor  of  that  part 
of  this  l)ill,  then  ? 

Mr.  Barber.  Yes,  sir. 

Mr.  Byrnes.  You  know  that  is  in  the  bill  ? 

Mr.  Barber.  I  do;  yes,  sir. 

I  do  not  think  I  have  anything  further  to  say. 

STATEMENT  OF  J.  PARKER  KIRLIN,  LAWYER,  OF  NEW  YORK 
CITY,  ENGAGED  IN  THE  PRACTICE  OF  ADMIRALTY  AND  MARI- 
TIME LAW. 

Mr.  KiRLiN.  Mr.  Chairman,  as  you  are  aware,  I  am  a  lawyer  by 
j)rofession,  and,  for  more  than  25  years,  my  practice  has  been  largely 
in  the  reahn  of  admiralty  and  martime  law.  Although  not  a  member 
of  the  chamber,  I  have  sat  as  an  honorary  member  of  the  committee 
of  the  Chamber  of  Commerce  of  New  York  by  invitation  of  the 
president,  to  assist  the  committee  in  relation  to  matters  in  connection 
with  the  shipping  which  have  arisen  in  the  course  of  their  delibera- 
tions. 

The  views  of  the  Chamber  of  Commerce  of  New  York  with  refer- 
once  to  the  Alexander  bill,  H.  R.  10500,  are  embodied  in  its  formal 
action,  which  has  already  been  summarized  to  you  by  Mr.  Bush  and 
the  other  members  of  the  committee.  The  views  of  the  chamber  in 
regard  to  the  ste])s  which  it  deems  necessary  to  be  taken  in  order  to 
jtchieve  the  result  of  upbuilding  a  great  national  mercantile  marine 
have  been  put  in  concrete  form  in  the  shape  of  a  proposed  bill  which 
has  been  introduced  by  ]Mr.  Rowe.  IT.  R.  118G5,  and  is  now  before 
the  committee.  I  understand  the  discussion  of  both  measures  is  in 
order,  and  I  purpose  referring  as  shortly  as  I  may  to  both.  I  do  not 
intend  to  go  all  over  the  ground  that  has  been  covered  by  the  mem- 
bers of  the  committee  of  the  Chamber  of  Commerce  of  New  York 
who  have  preceded  me,  but  shall  confine  my  remarks  to  certain  mat- 
ters which  my  own  knowledge  and  experience  in  practice  lead  me  to 
think  are  of  the  deepest  importance  in  working  out  some  serviceable 
plan  to  create,  develop,  and  encourage  a  substantial  American  mer- 
cnntile  marine. 


SHIPP1N(!  BOARD,  NAVAL  AUXII.IAKY;  A ND  MERCHANT  MARINE.      541 

Duiiiiff  tlie  course  of  the  present  war  I  have  had  occasion  in  tho 
course  of  practice  to  deal  with  purchase  and  sales  of  many  vessels, 
with  proposals  for  building  of  vessels,  for  the  establishment  of  a 
shipyard,  and  with  suggestions  and  inquiries  of  bankers  and  capital- 
ists who  have  desired  to  interest  themselves  in  the  development  of  a 
mercantile  marine  by  investing  money  in  ships.  Prior  to  the  begin- 
ning of  the  present  war  I  have  ne^er  had  occasion  to  deal  with  any 
such  matters.  These  circumstances,  as  well  as  public  discussion  of  the 
subject,  convince  me  that  there  is  a  real  growth  of  interest  in  the 
creation  of  an  American  mercantile  marine  bj'  private  enterprise. 
The  development  of  this  interest  has  no  doubt  to  some  extent  been 
fostered  by  rumors  of  the  large  profits  which  have  been  made  during 
war  time,  and  by  the  restrictions  due  to  the  exigencies  of  war  which 
have  been  placed  on  foreign  tonnage.  But  whatever  the  cause,  there 
is  no  doubt  that  there  has  been  a  great  awakening  of  public  interest 
in  this  question,  and  in  the  inquiry  as  to  what,  if  anything,  can  be 
done,  after  the  emergency  due  to  the  war  shall  have  passed,  to  estab- 
lish a  mercantile  marine  sufficiently  large  to  handle  a  substantial 
portion  of  our  connnerce.  It  is  useless  to  discuss  at  the  moment  the 
possibility  of  doing  anything  to  relieve  the  present  emergency,  for 
all  the  tonnage  available  is  now  in  service,  and  no  new  tonnage  which 
could  appreciably  relieve  present  conditions  can  possibly  be  created 
during  the  period  over  which  the  war  is  likely  to  continue. 

It  is  impossible,  in  the  short  time  at  my  disposal,  to  attempt  any 
textual  criticism  of  the  different  sections  of  II.  R.  10500.  I  shall  con- 
fine myself  to  certain  matters  of  principle  which,  in  my  judgment 
as  a  citizen  and  experience  in  dealing  with  the  general  subject,  are 
objectionable,  and  will  have  a  deterrent  rather  than  a  beneficial  effect 
in  the  development  of  an  American  merchant  marine.  I  am  not 
speaking  here  in  behalf  of  any  client  interested  in  this  matter,  but 
solely  as  an  individual  and  as  a  member  of  the  committee. 

The  features  of  the  bill  (H.  R.  10500)  to  which  I  desire  to  refer 
are:  (1)  That  which  provides  in  a  certain  contingency  for  the 
operation  of  Government-owned  steamships  in  private  trade;  (2) 
that  which  provides  in  very  great  detail  for  the  regulation  of  the 
instrumentalities  of  our  foreign  commerce,  including  restriction 
upon  the  sale  of  ships;  and  (3)  the  provisions  with  reference  to 
licenses. 

I  am  sure  that  no  member  of  our  committee  feels  the  slightest  ob- 
jection to  the  Government  spending  $50,000,000,  or  any  other  sum 
that  it  may  deem  proper,  for  the  purchase  of  naval  auxiliaries.  On 
the  contrary,  I  think  they  all  feel  that  this  is  a  necessary  and  valuable 
thing  to  do;  nor  do  I  think  there  is  any  objection  on  their  part,  or  in- 
deed any  sound  objection  in  principle  to  the  Government  putting 
such  vessels,  when  not  needed  for  its  own  purposes,  in  the  hands  of  a 
shipping  board,  with  authority  to  charter  them  for  operation  by  pri- 
vate enterprise.  Ships  are  articles  of  commerce.  They  haAe  their 
prices  and  values.  Sometimes  these  are  high,  while  at  other  times 
they  are  low;  but  ships  are  commodities  which  the  Government,  if 
it  should  buy  or  build  them,  would  not  own  exclusively.  They  would 
be  commodities  which  it  would  own  in  common  with  all  other  per- 
sons or  companies  that  own  shipping  property  which  at  times  is 
available  for  chartering. 

3291()~16 85 


542      SHlPPlNi;  BOARD,  iXAVAL  Ai;  Xli.lAK  V,  AND  MERCHANT  MARINli, 

I  am  perfectly  satisfied  that  any  \essel  built  or  piirchase>l  by  the 
Government  after  careful  inquiry  as  to  its  suital)ility  for  commercial 
purposes,  as  well  as  for  naval  purposes  in  cases  of  emergency,  would 
be  an  attractive  proposition  for  charter,  and  that  any  such  vessel, 
when  not  in  use  by  the  United  States,  if  offered  as  other  like  vessels 
are  offered  by  people  who  own  them,  in  the  open  market,  singly  and 
without  undue  restriction,  would  be  in  great  demand  for  chartering; 
and  that  at  all  times  when  such  vessels  could  be  operated  with  profit 
by  anybody,  they  Avould  be  readily  chartered  and  operated  by  private 
enterprise.  I  am  sure  that  all  the  shipping  men  here  present  will 
confirm  my  views  in  this  respect. 

The  feature  of  your  bill  which  renders  capital  timid  and  w^ill  de- 
ter investment  in  private  shipping,  so  long  as  it  remains  in  the  meas- 
ure, is  that  which  reserves  the  right,  in  case  the  shipping  board  does 
not  find  a  ready  or  suitable  charter  for  any  one  of  these  vessels,  to 
put  it  in  trade  and  operate  it  by  means  of  a  company  organized  for 
that  purpose.  This  provision  embodies  an  authority  to  the  Govern- 
ment, though  a  governmental  instrumentality,  to  engage  in  the  pri- 
vate business  of  operating  steamships.  It  may  be  that  the  contin- 
gency in  which  the  Government  would  operate  ships  is  remote,  but 
nevertheless  the  authority  to  do  so  is  there,  and  the  public  has  come 
to  believe,  whether  rightly  or  wrongly,  that  an  authority  of  this 
nature,  if  once  vested  in  a  board,  would  be  exercised.  The  natural 
fear  is  that,  if  exercised  at  all,  it  would  be  exercised  in  competition 
with  private  enterprise. 

There  is  no  limitation  in  the  bill  as  to  the  trades  in  which  the  board 
should  authorize  the  operation  of  Government  ships,  nor  has  there 
ever  been  an  answer  to  the  inquiry.  In  what  trades  is  it  proposed  to 
operate  them  ?  Everj'body  of  experience  in  the  shipping  trade  knows 
that  private  enterprise  has  already  established  shipping  lines  to  prac- 
tically every  port  in  the  universe  where  a  line  can  profitably  be  main- 
tained in  times  of  peace.  It  would  be  impossible,  therefore,  to  oper- 
ate the  Government  vessels,  which  would  be  of  substantial  size,  to  any 
point  or  points  where  the}"  would  not  come  in  competition  with 
private  operation. 

It  has  been  suggested  that  the  Government  would  place  these  ves- 
sels in  certain  trades  not  now  developed  and  keep  them  there  until 
the  business  should  be  established  and  then  turn  over  the  trade  to 
private  enterprise.  But  no  names  of  ports  lia^e  been  given  in  this 
connection.  All  trades  have  been  tried  hj  private  enterprise,  lines 
have  been  established  to  all  points  where  they  can  be  operated  profit- 
ably, and  occasional  sailings  are  made  to  all  other  ports  where  profit- 
able business  is  to  be  found.  The  only  trades  for  which  established 
direct  lines  are  not  in  operation  are  those  whose  physical  character- 
istics are  such  as  not  to  admit  of  the  operation  of  any  vessels  which 
would  be  suitable  as  naval  auxiliaries.  They  are  trades  to  ports  to 
which  deep-draft  vessels  can  not  proceed  and  which  have  hitherto 
been  served  by  coastal  A^essels  carrying  cargoes  transshipped  from 
larger  central  points  of  import.  The  natural  result  of  these  con- 
ditions would  be  that,  if  a  Government  ship  was  put  up  for  charter 
and  was  not  taken  by  private  persons  or  companies  engaged  in  the 
steamship  business,  the  reason  for  it  would  be  that  private  enterprise 
could  not  at  that  moment  operate  the  ship  profitably.     The  failure  of 


Slili'PIXc;  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      543 

the  ship  to  obtain  a  charter  would  be  clear  proof  to  the  business  com- 
munity that,  at  that  particular  time,  no  gain  could  be  made  from  the 
operation  of  it.  It  would  be  understood  in  the  business  community, 
in  those  circumstances,  that,  if  the  (jrovernment  then  proceeded  to 
operate  the  vessel  in  private  trade,  it  was  going  to  operate  the  vessel 
at  a  loss,  if  the  expenses  of  operation  should  be  figured  as  the  ex- 
penses of  private  companies  have  to  be  figured.  The  fear  that  the 
Government,  in  any  conceivable  contingencj^  W'Ould  enter  into  com- 
petition with  private  enterprise,  at  a  time  and  in  circumstances  when 
it  could  only  operate  at  a  loss  in  competition  with  private  enterprise, 
will  necessarily  deter  private  capital  from  entering  into  a  business 
which  may  be  subject  to  such  a  risk. 

The  business  view  of  this  matter  undoubtedly  is  that  the  Govern- 
ment ought  not  to  enter  into  competition  with  private  enterprise 
under  circumstances  which  may  involve  a  loss  to  the  Government, 
because  a  loss  to  the  Government  means  not  only  a  loss  to  the  tax- 
payers but  also  to  private  companies  engaged  in  the  same  business. 
If  the  ships  can  not  be  chartered  for  prices  that  will  jaeld  a  fair 
return  to  the  Government  on  its  investment,  they  ought  to  be  laid  up 
and  reserved  for  their  primary  use  as  Government  ships.  The  very 
fact  that  they  could  not  be  chartered  would  show  that  there  was  no 
urgent  need  for  them  in  commerce.  To  put  them  in  commerce  at  a 
time  when  there  was  no  such  need  for  them  as  would  lead  to  their 
being  chartered  could  only  injure  private  enterprise,  and  ever}^  pos- 
sible injury  to  private  enterprise  will  check  the  inclination  of  private 
individuals  to  inA'est  in  the  shipping  business. 

I  submit  this  matter  as  a  question  of  broad  public  policy  rather 
than  as  a  criticism  in  detail  of  the  bill,  for  I  am  convinced  from 
what  I  have  heard  here  to-day  (and  I  had  not  intended  to  speak  on 
the  subject,  but  have  been  led  to  do  so  by  the  very  earnest  character 
of  the  discussion)  that  the  weakest  feature  of  the  bill  is  that  it  con- 
tains no  suggestion,  no  ray  or  hope  or  promise  for  the  development 
of  an  American  merchant  marine  by  private  enterprise,  and  no  en- 
couragement or  incentive  for  the  investment  of  private  capital  in 
that  business. 

The  Chairman.  Your  view,  then,  is  that  if  section  8  were  stricken 
out  there  would  be  that  incentive? 

Mr.  KiRLiN.  I  believe  myself  that  No.  8  should  be  stricken  out. 

The  Chairman.  If  that  w^ere  stricken  out,  then  the  ray  of  hope 
would  appear  ? 

Mr.  KiRLix.  The  ray  of  hope  would  not  appear;  that  is,  the  ray  of 
hope  of  private  enterprise  building  up  a  merchant  marine  will  not 
appear;  but  neither  does  it  appear  from  your  project  of  building 
$50,000,000  worth  of  ships.  The  quantity  of  tonnage  which  that 
investment  would  buy  would  be  almost  negligible  in  comparison  with 
the  total  amount  of  tonnage  necessary  to  move  the  commerce  of  the 
United  States.  What  is  desired  is  the  adoption  of  some  plan  which 
will  ultimately  lead  to  the  creation  and  operation  under  the  Ameri- 
can flag  of  a  sufficient  number  of  ships  to  carry  our  commerce.  I  do 
not  assume  for  a  moment  that  the  project  contained  in  H.  R.  10500 
is  the  first  step  intended  to  be  taken  in  the  direction  of  the  creation 
of  a  governmental  mercantile  marine  sufficient  to  do  the  whole  busi- 
ness of  the  Nation;  yet.  if  it  is  not  such  a  step,  the  bill  should  not 


544     SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

retain  any  feature  likely  to  deter  private  capital  from  supplying  the 
needs  of  the  Nation.  On  the  contrary,  it  should  contain  some  affirma- 
tive provision  which  will  encourage  private  capital  to  supply  that 
great  need. 

The  practical  difficulty  to  be  overcome  is  that  vessels  built  in 
American  shipyards  in  times  of  peace  cost  more  than  similar  ships 
built  in  foreign  yards;  and  that  the  cost  of  operating  American 
ships,  whether  built  in  American  yards  or  purchased  abroad,  is 
greater  than  the  cost  of  operating  British,  German,  French,  or 
Scandinavian  ships.  Whether  the  enhanced  cost  of  building  in 
America  and  of  operation  under  the  American  flag  be  due  to  the 
higher  standards  of  living  of  American  workmen,  to  the  larger  num- 
ber of  officers,  engineers,  and  men  required  by  our  laws^  and  regula- 
tions to  be  employed  on  American  vessels,  or  to  a  combination  of  these 
causes,  it  is  a  fact,  proved  by  experience,  that  the  cost  of  American 
building  and  operation  is  larger  than  the  foreign  cost  to  an  extent 
which  has  deterred  American  capital  from  investing  in  shipping  em- 
ployed in  the  foreign  trade. 

Leaving  out  of  view  for  the  moment  the  extra  cost  of  building  in 
the  United  States,  what  is  the  position  with  regard  to  the  operation 
of  American  ships  in  the  foreign  trade  ?  Experience  has  shown  that 
the  extra  cost  of  operating  American  ships  in  the  general  foreign 
trade  is  such  that  it  has  not  been  profitable  to  operate  them. 
There  is  a  difference  between  the  cost  of  operation  under  the  Ameri- 
can flag  and  under  a  foreign  flag,  varying  with  respect  to  different 
ships  and  different  trades,  which  in  any  particular  trade  may  be 
approximately  computed:  and  such  difference  in  the  cost  of  opera- 
tion constitutes  a  fixed  charge  on  the  operation  of  American  ships  in 
such  trade.  Such  difference  in  cost  is  a  charge  which  must  be  borne 
by  every  ship  that  operates  in  the  foreign  trade  in  competition  with 
a  foreign  ship.  It  has  to  be  borne  by  ships  operating  under  private 
enterprises.  It  would  have  to  be  borne  equally  by  governmental 
ships  operated  under  the  supervision  of  a  governmental  board. 
There  can  be  no  possible  difference,  therefore,  in  the  expenditures  to 
be  made  by  the  Treasury  of  the  United  States  between  the  Govern- 
ment bearing  that  burden  as  an  incident  to  the  cost  of  governmental 
operation  of  ships  and  paying  the  amount  of  it  to  private  enterprise 
in  order  to  equalize  the  opportunities  of  American  shipowners  in  the 
foreign  trade  with  those  of  foreign  owners  who  may  compete  with 
them  in  the  same  or  similar  trades. 

There  can  therefore  be  no  development  of  an  American  mercantile 
marine  sufficient  to  handle  the  commerce  of  the  United  States,  unless 
the  Government  is  prepared  to  provide  the  entire  tonnage  necessary, 
and  to  bear,  itself,  the  extra  cost  of  operating  under  the  American 
flag,  or  to  adopt  some  plan  by  which  allowances  can  be  made  to  pri- 
vate individuals  and  companies  to  cover  this  difference  of  operation, 
so  that  they  can  compete  upon  equal  terms  with  ships  operated  under 
a  foreign  flag. 

Such  a  plan  is  outlined  in  the  measure  suggested  by  the  Chamber 
of  Commerce  of  New  York,  and  introduced  by  Mr.  Rowe  as  H.  R. 
11865. 

An  objection  is  made  to  this  plan  on  the  theory  that  it  would  in- 
volve the  payment  of  a  subsidy,  and  that  subsidies  are  impolitic.     I 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      545 

do  not  enter  on  the  controversial  subject  as  to  whether  subsidies  in 
the  popular  sense  would  or  would  not  reestablish  our  mercantile 
marine,  or  whether  they  are  expedient,  beyond  suggesting  that  the 
mercantile  marine  of  countries  with  which  our  citizens  must  compete 
have  at  times  received  and  now  receive  subsidies.  Discussion  of  that 
matter  is  unnecessary,  for  the  reason  that  the  plan  of  equalizing 
expenses  of  building  and  operation  under  American  auspices  is  not 
in  any  proper  sense  a  subsidy  or  open  to  the  objections  commonly 
made  to  subsidies.  It  would  not  be  an  appropriation  out  of  which 
those  receiving  it  could  possibly  receive  any  profit.  The  provision 
by  which  the  board  would  fix  the  amount  of  it  would  make  it  impos- 
sible that  any  profit  should  result  from  the  equalization  allowance. 
There  is  no  more  propriety  in  describing  an  equalization  allowance 
as  a  subsidy  than  there  would  be  in  saying  that  the  $50,000,000  pro- 
posed to  be  appropriated  by  the  pending  bill  is  a  subsidy.  If  the 
vessels  purchased  by  means  of  that  appropriation  should  be  operated 
under  governmental  auspices,  the  exact  number  of  dollars  that  would 
be  paid  to  private  enterprise  for  the  operation  of  a  similar  number  of 
ships  would  have  to  be  paid  out  of  the  Treasury  for  the  operation  of 
the  Government  ships,  because  the  difference  between  American  and 
foreign  cost  of  operation  is  a  fixed  charge  on  the  business  of 
operation. 

Both  the  Alexander  bill  and  the  Rowe  bill  contain  plans  intended 
to  aid  the  development  of  our  merchant  marine.  The  Alexander 
bill,  as  well  as  the  other,  is  based  on  a  realization  of  the  necessity  of  a 
governmental  appropriation  of  money  to  aid  the  development  of  a 
mercantile  marine.  If  it  was  not  realized  that  something  must  be 
done  by  the  Government  in  this  direction,  an  appropriation  of 
$50,000,000  for  vessels  the  primary  purpose  of  which  is  to  carry  our 
commerce  would  not  be  thought  of. 

The  point  I  wish  to  make  is  that  whether  the  Government  operates 
ships  or  encourages  private  enterprise  to  operate  them,  it  is  going 
to  cost  a  certain  number  of  dollars  per  annum  more  to  operate  ships 
under  the  American  flag  than  it  will  cost  the  owners  of  similar  ships 
operating  in  competition  with  them  under  foreign  flags ;  and  that  in 
either  event  the  Government  must  bear  that  difference  in  the  cost  of 
operation  if  it  really  desires  to  reestablish  our  flag  in  the  foreign 
trade.  I  am  as  much  opposed  as  any  of  the  members  of  this  com- 
mittee to  the  granting  of  a  subsidy  in  the  ordinary  sense.  I  do  not 
think  that  shipowners  generally  want  a  subsidy.  AH  that  they  wish, 
and  certainly  all  that  they  need,  is  an  allowance  to  equalize  the  extra 
cost  of  building  and  operation,  due  to  no  conditions  that  they  can 
control,  but  which  arises  from  our  conditions  of  life  and  from  our 
maritime  laws  and  regulations.  Such  an  allowance  is  not  open  to 
the  objection  that  may  be  made  against  a  subsidy,  that  the  recipient 
can  make  a  profit  from  it;  I  mean  a  profit  out  of  the  subsidy  as 
distingushed  from  a  profit  from  the  business.  If  you  can  point  out 
any  particular  in  which  the  plan  contained  in  H.  R.  11865  would 
enable  the  shipowners  to  make  a  profit  out  of  the  equalization  allow- 
ances made  to  them  by  the  board,  which  is  left  full  discretion  to  deter- 
mine the  amount  of  them,  then  it  will  be  proper  to  describe  the  plan 
as  a  "  subsidy  " ;  otherwise  it  can  not  justly  be  called  a  subsidy  in  the 
ordinary  sense. 


546      SHIPPING  BOARD,  XAVAL  AUXILIAR V,  AND  MERCHANT  MARINE 

It  is  quite  idle  to  expect  that  American  caj^ital  will  be  irnefeted 
permanently  in  American  merchant  marine,  unless  the  operation  of 
ships  under  the  American  flag  enables  their  owners  to  make  money, 
or  indeed  unless  they  can  make  the  same  amount  of  money  that 
would  arise  from  the  operation  of  the  same  ships  under  a  foreign 
flag.  Those  investing  in  American  shipping  can  not  make  money 
unless  the  ships  can  be  operated  at  the  same  relative  profit  as  foreign 
ships  which  operate  in  competition  with  them.  It  is  absolutely 
futile  to  expect  the  development  of  an  American  mercantile  marine 
until  these  conditions  can  be  equalized.  Congress  must  -do  something 
for  our  citizens  w^hom  it  wishes  to  have  engage  in  the  building  and 
operation  of  American  ships  in  order  to  equalize  their  operations 
with  those  of  foreign  citizens.  The  adoption  of  a  plan  of  equaliza- 
tion as  a  national  policy  should  be  o])en  to  no  objection,  since  the 
necessity  for  it  arises  from  our  conditions  of  life  and  labor  and 
the  laws  and  regulations  which  the  wisdom  of  Congress  has  ordained 
for  the  regulation  of  American  ships.  If  it  is  thought  proper  to  re- 
quire that  our  ships  should  have  a  greater  number  of  officers  and 
engineers,  the  engineers  should  have  a  greater  number  of  helpers, 
and  there  should  be  a  greater  number  of  certificated  seamen  on 
board,  using  a  common  language,  and  the  conditions  of  life  are  such 
that  the  employees  of  the  vessel  must  receive  higher  rates  of  wages 
than  those  similarly  employed  on  foreign  ships,  upon  what  theory 
can  it  be  expected  that  private  enterprise  will  continue  to  operate 
ships  in  a  foreign  trade  unless  the  Government  equalizes  to  him  in 
some  manner  from  the  Public  Treasury  the  additional  burdens  which 
our  laws  and  conditions  impose  upon  him  ? 

It  is  not  just,  as  is  sometimes  done,  to  say  that  American  ship- 
owners who  operate  ships  under  foreign  flags  are  unpatriotic;  they 
have  to  deal  with  matters  of  business,  and,  like  any  other  class  of 
merchants,  they  operate  where  their  costs  are  the  least  and  profits 
the  most.  If  Congress  would  set  an  example  in  patriotism  by 
making  it  possible  for  our  citizens  to  build  ships  in  their  own 
country  and  to  operate  them  under  their  own  flag  at  the  same  cost 
and  W'ith  the  same  amount  of  profit,  I  have  no  doubt  the  example 
would  be  followed,  and  that  feelings  of  patriotism  would  prompt 
all  shipowners  to  build  in  America  whenever  the  shipping  board 
approved  of  that  course,  and  to  operate  their  ships,  whether  built 
in  America  or  purchased  abroad,  under  the  American  flag,  and  that 
a  mercantile  marine  adequate  to  the  needs  of  the  country  would  be 
created  as  rapidly  as  conditions  would  permit. 

The  plan  of  equalization  of  costs  of  building  and  operation  recom- 
mended in  the  Chamber  of  Commerce  measure  is  not  open  to  any  of 
the  objections  to  which  a  subsidy,  so  called,  is  subject.  It  is  pro- 
vided that  the  equalization  allowances  to  be  made  are  wholly  within 
the  control  of  the  shipping  board.  If  the  board  does  not  approve 
of  the  plan  for  building  any  specific  ship  and  the  contract  and 
specifications  for  building,  no  equalization  allowance  for  the  cost  of 
building  can  be  obtained.  Similarly,  if  the  board  does  not  approve 
of  the  trade  in  which  the  vessel  is  intended  to  be  employed,  an 
equalization  of  the  cost  of  operation  can  not  be  secured.  In  other 
words,  the  shipowner,  in  order  to  obtain  equalization  allowances,  can 
only  do  the  things  which  a  shipping  board  wants  him  to  do,  and 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      547 

the  ship  can  only  serve  the  purposes  that  the  board  may  wish  to 
have  served. 

The  Chairman.  I  have  not  read  the  bill  with  care;  but  is  this 
subsidy  or  subvention  only  to  apply  to  ships  hereafter  to  be  con- 
structed ? 

Mr.  KiRLiN.  Yes;  and,  so  far  as  the  operation  of  ships  is  con- 
cerned, the  equalization  allowance  can  only  apply  to  ships  in  services 
which  the  shipping  board  may  approve. 

The  Chairman.  Whether  heretofore  constructed  or  not? 

Mr.  Kirlin.  Yes;  but  in  this  connection  I  should  point  out  that 
it  will  cost  an  American  citizen  just  as  much  to  operate  a  ship  in 
the  next  20  years,  that  he  bought  during  the  war  or  before  the  war, 
as  it  will  cost  to  operate  one  that  he  has  built  during  the  war;  so 
that  the  reason  for  equalization  allowances  applies  just  the  same  to 
one  class  of  ships  as  to  the  other. 

The  Chairman.  If  he  had  bought  a  ship  during  the  war,  at  the 
present  rate — say  $100  a  ton — and  normal  conditions  ensue,  after  a 
while,  when  ships  can  be  built  for,  say,  $40  to  $50  a  ton,  should  the 
board  equalize  that  cost  now  in  the  way  of  a  subsidy  to  him? 

Mr.  Kirlin.  You  mean  the  cost  of  building? 

The  Chairman.  No;  the  cost  of  his  ships  to  him. 

Mr.  Kirlin.  No;  there  is  no  suggestion  of  that  kind  in  the  bill. 
There  is  no  suggestion  of  any  allowance  to  be  made  on  account  of 
ships  that  are  purchased.  It  is  only  for  building  in  American  yards 
that  the  building  equalization  is  to  be  given.  If  the  board  does  not 
approve  of  building  in  American  yards,  there  will  be  no  equalization 
allowances  for  the  extra  cost  of  building  here.  The  only  object  of 
creating  building  allowances  is  for  the  purpose  of  stimulating  the 
establishment  and  improvement  of  the  building  yards  in  this  coun- 
try, with  the  twofold  purpose  of  improving  the  yards  for  general 
building  purposes  and  of  developing  in  the  yards  the  business  of 
the  construction  of  standardized  vessels.  The  only  further  object 
of  building  in  American  yards  would  be  the  acquisition  of  vessels 
which,  in  the  judgment  of  the  board,  would  be  peculiarly  available 
for  the  kinds  of  trade  which  the  board  may  think  ought  to  be  fos- 
tered and  encouraged  and  the  construction  of  ships  especially  adapt- 
able for  governmental  purposes,  which  could  be  secured  by  the 
requisition  of  the  ships  at  any  time  for  the  use  of  any  of  the  depart- 
ments of  the  Government. 

The  objectionable  feature  of  the  bill,  H.  R.  10500,  is  that  it  con- 
tains no  provisions  tending  to  encourage  private  initiative  in  the 
business  of  operating  ships  in  the  foreign  trade,  which  private  ini- 
tiative would  gladly  enter  if  equality  of  opportunity  should  be 
afforded,  in  which,  if  such  opportunity  should  be  afforded,  private 
enterprise  would  enter  to  such  an  extent  that  in  years  to  come  our 
merchant  marine,  instead  of  that  of  other  nations,  would  dominate 
the  seas. 

I  do  not  believe  that  any  man  of  the  slightest  experience  in  the 
steamship  business,  w'hether  as  a  shipper  or  shipowner,  would  deny 
for  one  moment  that  if  H.  R.  11865,  introduced  by  Mr.  Rowe,  could 
be  put  upon  the  statute  books,  you  could  possibly  fail  to  create,  de- 
velop, and  maintain  an  American  merchant  marine  of  whatever  size 
the  board  was  willing  to  foster. 


548      SHIPPING  BOARD,  NAVAL  AUXILIAKV,  AND  MERCHANT  MARINE. 

The  Chairman.  That  is,  that  the  (joveriunent  was  willing  to  pay 
for  in  the  way  of  subsidies? 

Mr.  KiRLiN.  That  the  Government  was  willing  to  pay  for  in  the 
way  of  equalization — not  in  subsidies.  I  must  dissent  from  the  use 
of  that  term  as  applied  to  equalization.  It  is  no  more  a  subsidy  than 
the  amount  of  money  which  the  Government  will  put  into  the  enter- 
prise under  H.  11.  10500.  The  money  which  the  Government  would 
lose  in  the  operation  of  a  vessel  in  the  merchant  marine  is  just  as 
much  a  subsidy  as  the  money  which  it  w^ould  give  to  a  private  citizen 
to  enable  him  to  equalize  his  cost  of  operation. 

The  Chairman.  Except  in  the  one  case  the  benefit  would  be  to 
all  the  people  in  the  United  States  and  in  the  other  instance  it  would 
benefit  the  few\ 

Mr.  KiRLiN.  The  object  of  the  creation  of  an  American  merchant 
marine,  as  I  understand  it,  is  to  benefit  the  whole  people  of  the 
United  States.  It  is  not  to  benefit  the  shipowners.  It  is  to  benefit 
our  commerce.  And  if  you  know  and  see,  as  practical  men,  that  you 
can  not  accomplish  that  object  Avithout  doin^  something  affirmative 
and  helpful  by  providing  the  necessary  equalization  allowances,  con- 
siderations of  broad  public  policy  should  not  lead  to  a  refusal  to  do 
that  thing  because  some  people  may  apply  to  it  a  name  which  has  an 
unpleasant  sound  to  the  public  ear. 

The  Chairman.  Mr.  Bush  said  you  had  somebody  here  who  was 
going  to  give  an  estimate  of  what  it  would  cost  per  annum  to  build 
such  a  merchant  marine  as  he  thinks  we  ought  to  have,  of  200  or  300 
ships,  under  the  provisions  of  the  Eowe  bill. 

Mr.  KiRLiN.  I  do  not  think  there  is  anybody  here  who  can  give 
such  an  estimate.  Unfortunately,  our  delegation  did  not  include  any 
shipbuilder,  and  as  I  remember  Mr.  Bush's  final  remark  to  one  of 
the  members  of  the  committee,  he  said  that  no  man  could  prophesy 
with  accuracy  'what  that  cost  would  amount  to. 

The  Chairman.  If  based  on  the  estimates  before  the  war  in 
Europe,  it  w^ould  be  an  interesting  proposition.  I  am  going  to  have 
it  figured  out  on  the  basis  of  a  statement  that  will  be  made  here 
about  the  difference  in  cost. 

Mr.  KiRLiN.  I  suppose  the  difference  between  the  cost  of  building 
in  this  country  and  abroad  before  the  war  and  the  difference  in  the 
cost  of  operation  before  the  war  can  be  figured  out  fairly  accurately. 
But  it  would  be  quite  illusory  to  take  these  figures  as  the  basis  of 
estimating  the  cost  of  entering  upon  a  great  national  undertaking, 
the  result  of  which  would  be  the  development  of  standardization  in 
shipyards  that  would  result  in  a  diminished  cost  of  building  and  of 
operation.  The  adoption  of  a  broad  national  policy  w^ould  result  in 
a  tendency  toward  maritime  investments,  and  would  lead  many 
people  to  adopt  a  maritime  calling,  as  a  result  of  which  there  w^ould 
probably  be  a  reduction  in  the  cost  of  operation  under  the  American 
flag. 

It  must  be  expected  that  the  development  of  a  great  national 
mercantile  marine  will  require  long  and  patient  effort  and  a  con- 
siderable period  of  time.  Men  must  be  educated  to  the  value  of 
maritime  investments  and  to  the  opportunities  incident  to  following 
the  life  of  the  sea.  Our  mercantile  marine  has  developed  so  rapidly 
during  the  war  that  there  is  the  greatest  difficulty  in  finding  sufficient 


SHIPPING  BOAKI),  NAVAL  AUXllJAKY,  AND  MERCHANT  MARINE.      549 

number  of  officers,  engineers,  and  seamen  to  man  and  operate  the 
vessels  that  are  now  running.  It  must  be  a  subject  of  grave  concern 
to  those  who  are  constructing  the  large  amount  of  tonnage  now  build- 
ing in  our  shipyards  as  to  where  they  are  to  find  the  men  to  operate 
these  ships.  I  have  heard  those  engaged  in  these  operations  express 
their  anxiety  in  this  regard  very  freely. 

When  normal  times  return  the  building  up  of  the  American  mer- 
chant marine  must  be  a  slow  process.  To  accomplish  it  we  must  not 
only  have  the  ships,  but  must  develop  a  love  of  the  seafaring  life 
on  the  part  of  the  large  numbers  of  men  who  will  be  required  to 
officer,  man,  and  operate  the  ships.  Congress  will  have  to  adopt  a 
great  national  policy  which  the  public  can  see  is  likely  to  endure  in 
order  to  lead  men  in  large  numbers  to  follow  the  life  of  the  sea  as  a 
calling.  It  can  not  be  expected  that  this  can  be  accomplished  in  a 
short  time.  Officers  and  men  may  be  found  and  developed  in 
sufficient  numbers  to  take  care  of  the  moderate  needs  of  the  ships  that 
may  be  purchased  and  built  in  the  next  few  years;  but  to  develop 
officers  and  seamen  in  sufficient  numbers  to  man  the  great  quantity 
of  ships  which  will  be  necessary  to  handle  the  commerce  of  the 
United  States  will,  in  my  judgment,  require,  if  n!)t  a  lifetime,  at  least 
the  period  of  one  generation.  Now,  when  everybody  is  anxious  to 
do  something  constructive,  and  when,  for  the  first  time  in  my  recol- 
lection, the  subject  of  an  American  merchant  marine  has  engrossed 
the  minds  and  thoughts  of  the  people,  I  am  anxious  to  see  something 
done  which  may  inaugurate  such  a  national  policy  as  will  interest 
our  people,  as  it  has  interested  the  people  of  other  countries,  in  the 
sea  as  a  calling,  and  that  may  attract  the  investments  which  may  be 
necessary  to  carry  forward  that  policy  with  the  same  measure  of 
success  that  American  investments  have  achieved  in  other  vocations. 

I  come  now  to  the  subject  of  the  ]:)rovisions  of  the  bill  relating  to 
the  regulation  of  foreign  commerce.  These  provisions,  in  my  opin- 
ion, are  unnecessarily  drastic,  definite,  and  comj)rehensive  as  applied 
to  a  new  business.  Too  much  regulation  is  a  clog  on  business,  and 
has  a  natural  effect  of  deterring  capital  from  investing  in  it.  It 
should  be  borne  in  mind  that  the  object  to  be  attained  is  to  attract 
capital  to  the  shipping  business.  Individual  firms  and  corporations 
have  a  natural  dislike  to  engage  in  anj^  business  that  their  necessities 
do  not  require  them  to  follow  where  regulations  of  an  inquisitorial 
nature  are  provided  to  govern  it.  If  two  aAenues  of  investment  are 
open  to  capital,  one  of  which  involves  the  conduct  of  the  business 
subject  to  governmental  regulation,  not  only  of  the  business  itself, 
but  of  those  who  engage  in  it,  and  the  other  does  not  involve  such 
supervision,  regulation,  and  control,  it  is  only  natural  that  the  avenue 
which  is  untrammeled  will  be  chosen.  The  provisions  of  H.  R. 
10500  go  a  A'ery  long  way  and  are  very  minute  in  providing  for  regu- 
lation, and  on  top  of  the  specific  provisions  in  that  regard  there  is  the 
general  provision  that  the  interstate  commerce  laws,  so  far  as  they  fit, 
are  also  to  be  applicable :  and  the  first  sentence  of  section  9  provides 
for  regulating  "  the  operation  of  all  corporations,  firms,  or  indi- 
viduals engaged  as  common  carriers,"  etc.  These  provisions,  taken 
together,  provide  a  larger  authority  to  regulate  the  business  than  is 
really  necessary,  and  indeed  than  the  committee  would  expect  to  see 
exercised.    I  concur  with  Mr.  Franklin  in  the  opinion  that  a  certain 


550      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

amount  of  regulation  may  be  necessary,  but  I  do  not  think  it  is  either 
necessar}'  or  expedient  to  provide  such  minute  regulation  or  t<^ 
adopt  the  tone  of  the  bill  which  expresses  the  idea  of  regulation  in 
such  a  deterrent  manner. 

The  Chairman.  I  would  be  very  glad  if  you  would  suggest  some 
amendment  which  would  meet  your  objections  and  submit  it  to  the 
committee. 

Mr.  KiRLiK.  You  gentlemen  who  are  connected  with  the  Govern- 
ment are  more  or  less  accustomed  to  the  ways  of  the  various  depart- 
ments and  do  not  stand  in  the  same  state  of  mind  toward  it  as  citi- 
zens who  are  engaged  in  business.  They  feel  a  certain  degree  of  fear 
of  the  Government.  They  dread  the  hour  when  the  supervising 
Government  official  comes  to  look  into  their  business.  They  fear  that 
he  is  going  to  do  something  unfair,  or  to  encumber  it  with  restric- 
tions which  interfere  with  its  successful  operation.  Possibly  this 
may  in  some  instances  result  from  a  guilty  conscience,  and,  for  that 
reason,  I  freely  admit  that  some  method  of  regulation  may  be  neces- 
sary. But  if  you  want  to  encourage  the  development  of  the  American 
merchant  marine  as  a  new  business  my  advice,  based  on  my  ex- 
perience, would  be  not  to  surround  it  at  the  start  with  any  more 
regulations  than  the  business  really  requires  for  its  fair  conduct. 
These  observations  apply  with  peculiar  iome  to  the  provision  which 
would  prohibit  the  sale  of  American-owned  vessels  without  the  per- 
mission of  the  shipping  board.  Unless  Congress  decides  to  do  some- 
thing in  the  way  of  equalizing  the  expenses  of  operation  of  Ameri- 
can tonnage  in  the  foreign  trade  after  the  war,  such  operation  will 
necessarily  be  to  a  considerable  extent  unprofitable.  If  experience 
teaches  that  it  has  been  unprofitable  in  time  of  peace  in  the  past,  capi- 
tal will  naturally  apprehend  that  without  governmental  aid.  it  will  be 
un])rofitable  in  the  future.  It  will  therefore  be  doubly  difficult  to 
induce  private  capital  to  enter  into  that  business  if  it  is  fettered 
with  a  provision  that  the  operating  property  can  not  either  be  op- 
erated at  a  profit  or  sold  to  those  who,  under  another  flag,  can 
operate  it  at  a  profit,  and  would  hence  presumably  pay  fair  prices 
for  it.  It  would  no  doubt  be  proper  to  retain  a  provision  that  the 
vessels  built  with  the  $50,000,000  appropriated  by  this  act,  if  sold  to 
private  individuals,  should  not  be  resold,  since  such  resale  would 
deprive  the  Government  of  the  right  of  requisitioning  the  vessels 
in  case  of  need;  but  it  would  be  quite  unprecedented,  and  I  think 
fatal  to  the  main  purpose  of  increasing  the  development  of  the  mer- 
chart  marine,  to  provide  that  vessels  built  or  purchased  by  private 
enterprise  should  not  be  capable  of  sale  without  governmental  per- 
mission. No  competing  national  has  ever  had  such  a  provision  in 
times  of  peace,  and  it  is  not  to  be  doubted  that  the  limitations  upon 
sale  which  have  been  imposed  by  the  various  carrying  nations  for  the 
period  of  the  war  will  be  rescinded  upon  the  restoration  of  peace.  To 
retain  such  a  fetter  upon  the  instrumentalities  of  our  own  commerce 
in  time  of  peace  could  therefore  only  place  it  at  an  unnecessary  dis- 
advantage. 

I  think  the  provision  in  the  bill  regarding  licensing  is  also  highly 
objectionable  for  the  same  reason.  The  very  vagueness  of  the  pro- 
vision itself  would  have  an  unfortunate  effect  upon  investments  in 


SllU'l'iXG   BOAED,  NAVAL  AL^XlLlAItV,  A.N  D  MEKCHANT  MARINE.      551 

American  tonnage.  It  does  not  say  what  kind  of  a  license  is  intended ; 
^Yhethel■  it  is  a  license  to  do  business  generally,  snch  as  a  corporation 
in  one  State  must  take  out  in  another;  whether  it  is  a  license  that 
lines  must  obtain  or  that  every  ship  must  secure;  or  whether  it  is 
for  a  term  of  years  or  months  or  days  or  for  a  specific  trip.  It  says 
nothing  at  all  except  that  no  corporation,  firm,  or  individual  shall 
engage  in  the  business  of  transporting  passengers  or  property  by 
water  to  or  from  the  United  States  without  first  obtaining  a  license 
so  to  do  from  the  shipping  board,  and  that  if  a  ship  shall,  for  any 
reason,  load  a  cargo  wdthout  obtaining  such  a  license  it  can  not  be 
cleared  from  our  customhouses. 

The  necessity  of  securing  a  license  implies  the  power  to  revoke  it. 
How  can  it  be  expected  that  new  capital  will  go  into  a  business  which 
requires  a  license  for  its  conduct,  when  the  investor  might  think  that, 
owing  to  some  fault  in  the  management  of  the  property,  of  which  he 
would  have  no  personal  knowledge,  the  conduct  of  the  business  might 
be  stopped  by  the  revocation  of  the  license,  and  yet  the  instruments 
by  which  the  business  was  conducted  could  not  be  sold  without  the 
leave  of  the  Government?  Whether  rightly  or  wrongly,  the  public 
will  naturally  believe  that  the  requirement  for  such  a  license  is  in  the 
nature  of  a  club  to  compel  those  wdio  are  engaged  in  it  to  conduct  it 
to  the  satisfaction  of  the  Government,  rather  than  in  such  manner 
as  will  yield  the  largest  returns  upon  the  investment.  The  require- 
ment for  the  proper  conduct  of  the  business  should  be  provided  for 
by  more  moderate  provisions  for  regulations,  so  that  it  can  be  car- 
ried on  to  the  mutual  satisfaction  of  the  Government  and  the  in- 
vestor, without  the  fear  of  a  revocation  of  license  or  possible  restric- 
tions upon  the  sale  of  the  property. 

I  would  therefore  respectfully  suggest,  for  the  consideration  of  the 
committee,  that  the  sections  of  the  bill  as  they  now  stand,  providing 
for  regulation  of  the  business  and  for  licenses,  be  eliminated,  and  that 
there  be  substituted  in  place  of  them  a  section  in  short  form,  easily 
comprehended  by  the  ordinary  business  man,  limiting  the  regidatory 
power  of  the  board  to  matters  of  fair  dealing,  and  providing  that  the 
board  should  merel}'  have  authority  to  prohibit  unfair  practices. 
Such  a  provision  would  be  generally  understood.  If  the  investor 
knew  beforehand  that  only  unfair  practices,  such  as  discriminatory 
rates  or  practices,  or  improper  combinations  and  agreements,  were 
prohibited  and  were  subject  to  regulations,  he  would  know  what  was 
intended  to  be  prohibited,  and  could  readily  appreciate  the  advan- 
tages or  disadvantages  in  investing  in  a  business  subject  to  that  meas- 
ure of  supervision. 

I  do  not  suggest  that  the  bill  intends  to  be  harmful  in  tone.  On 
the  contrary,  I  know  it  is  not  intended  to  be  so,  and  I  fnlly  appreci- 
ate the  honorable  intentions  of  its  framers.  Yet  it  seems  to  me,  in 
reading  it  over,  the  framers  of  the  bill  have  expressed  their  intentions 
in  terms  of  undue  harshness.  If  it  is  not  intended  to  have  all  the 
wide  provisions  for  regulation  exercised,  they  should  not  be  in  the 
bill.  A  board  created  with  such  very  ample  powers  will  naturally 
assume  that  the  authority  for  regulation  conferred  upon  them  consti- 
tutes their  mandate,  and  there  will  be  an  inevitable  tendency  on  the 
part  of  the  board  to  exercise  the  powers  which  are  conferred  upon  it. 


652      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

At  least,  such  would  be  the  view  of  the  man  in  the  street.  It  is  de- 
sirable, therefore,  to  avoid  provisions  for  restrictions  that  are  unnec- 
essary for  the  fair  conduct  of  the  business;  it  is  desirable  even  to 
avoid  the  appearance  of  a  desire  to  regulate  the  business  to  an  extent 
beyond  that  which  the  committee  may  consider  to  be  necessary.  The 
reason  for  this  is  that  the  public  will  ascribe  to  the  bill  whatever 
intention  ma}^  legitimately  be  inferred  from  the  powers  of  regulation 
which  stand  out  on  the  face  of  it,  and,  as  those  powers  are  now  ex- 
pressed, there  is  no  doulit  in  my  mind  that  they  wdll  operate  as  a  most 
powerful  deterrent  upon  the  entry  of  private  capital  in  shipping  to 
De  operated  under  this  act. 

I  would  therefore  very  humbly  and  with  the  greatest  respect  sug- 
gest that  the  committee  leave  out  of  this  bill  that  part  of  it  which 
provides  for  the  contingent  operation  of  ships  by  the  Government  in 
competition  w^ith  private  enterprise  and  the  provisions  which  look  to 
an  undue  regulation  of  the  business,  an  unnecessary  restriction  upon 
the  sale  of  property  employed  in  it,  and  all  the  provisions  wath  regard 
to  licensing.  In  place  of  those,  I  would  suggest  the  substitution  of 
a  shorter  regulatory  provision  of  the  tenor  of  that  w^hich  I  have  pre- 
viously referred  to,  and  the  incorporation  in  the  bill  in  some  form 
of  the  basic  ideas  which  underlie  the  measure  H.  R.  11865,  which 
has  been  introduced  by  Mr.  Rowe,  without  which,  in  my  opinion,  no 
considerable  development  of  the  mercantile  marine  of  the  United 
States  can  be  expected  unless  the  United  States  intends  to  build  and 
own  the  whole  of  the  tonnage  necessary  to  handle  the  commerce  of 
this  country  in  the  foreign  trade. 

I  desire  also  to  call  attention  to  two  further  provisions  of  the 
chamber  of  commerce  bill.  The  first  of  these  provides  that  the  Gov- 
ernment may  at  any  time  requisition  for  its  own  use  any  vessels 
which  receive  equalization  allowances  upon  terms  to  be  determined 
by  an  impartial  board  of  three  surveyors.  The  other  is  that  which 
provides  that  every  vessel  receiving  such  allowances  shall  carry  at 
feast  two  apprentices,  one  of  whom  shall  be  in  the  deck  department 
and  one  in  the  engineering  department,  who  shall  receive  instruc- 
tion, respectively,  in  the  science  of  navigation  and  of  marine  engi- 
neering. There  would  be  no  objection,  I  am  sure,  to  increasing  the 
number  of  such  apprentices.  This  provision  is  of  the  kind  adopted 
by  foreign  nations  for  the  instruction  and  development  of  officers 
and  engineers.  An  apprentice  who  has  served  on  board  ship  for  a 
number  of  years  is  generally  qualified  for  examination  for  officer 
and  for  engineer  and,  upon  examination,  secures  a  certificate  which 
enables  him  at  once  to  step  up  from  the  position  of  apprentice  to 
the  position  of  an  officer  or  engineer.  Under  such  a  provision  the 
Nation  would  develop  its  own  officers  and  engineers  automatically 
with  the  increase  and  development  of  its  tonnage.  The  officers  and 
engineers  thus  secured  w^ould  be  qualified  by  the  experience  and  in- 
struction that  they  would  receive  while  serving  in  vessels  employed 
in  the  foreign  trades  for  the  proper  and  intelligent  discharge  of  all 
the  duties  which  would  fall  upon  them  thereafter  in  serving  as  offi- 
cers in  such  trades. 

The  Chairman.  I  would  be  very  glad  if  you  would  suggest  that 
amended  provision  in  reference  to  regulation,  and  we  will  consider  it. 

Mr.  KiRLiN.  I  do  not  know  that  I  am  competent  to  do  that,  but 
lam  quite  willing  to  put  my  hand  to  it. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINK.      553 

The  Chairman,  I  wish  to  incorporate  in  the  record  a  letter  from 
Mr.  George  S.  Dearborn,  president  of  the  American-Hawaiian 
Steamship  Co. : 

Nkw  Yokk,  F<  iDKarii  10,  I!>I6. 
Dear  Sir:  With  an  iippreciatlon  of  the  great  interest  you  liave  had  in  the  de- 
velopment of  an  American  mercliant  marine  in  the  foreign  trade,  and  long  be- 
fore that  question  was  of  the  importance  that  it  is  to-day,  I  am  taking  the 
liberty  of  submitting  herewith  some  views  that  I  have  upon  the  subject  of  the 
bill  now  being  considered  by  your  connnittee  and  also  the  original  ship-purchase 
bill,  and  what  would  have  resulted  if  the  latter  had  become  a  law : 

(1)  Not  an  additional  ship  would  have  been  added  to  the  ocean-carrying 
trade,  barring,  of  course,  the  interned  C4erman  and  Austrian  ships. 

(2)  Such  ships  as  would  have  been  purchased  and  operated  by  the  Govern- 
ment would,  by  the  limits  of  the  appropriation  proposed,  have  been  greatly  in 
the  minority  of  the  privately  o\vned  ships  in  the  foreign  carrying  trade.  Thus 
the  latter  ships,  talcing  the  bulli  of  the  business,  would  have  fixed  the  rates 
and,  assuming  that  tlie  comparatively  small  number  of  ships  opei'ated  by  the 
Government  would  have  taken  freight  at  lower  rates,  only  a  small  proportion  of 
all  the  cargo  carried  could  have  received  the  benefits.  Therefore  it  would  liave 
been  impossible  to  apportion  these  benefits  to  shippers  equitably — those  who 
were  fortunate  would  have  reaped  the  benefits  and  would  thus  have  re- 
ceived a  bounty  from  the  Government,  a  subsidy  in  substance,  which  would 
have  resulted  in  discrimination  as  between  shippers.  The  favored  shippers, 
who  would  be  exporters,  being  middle  men,  would  have  pocketed  the  bounty,  in 
which  the  manufacturers  in  this  country  or  the  importers  in  the  foreign  country 
would  not  have  participated. 

I  know  of  exiforters  to-day  who  have  l<*i)g-time  freighting  contracts  at  nor- 
mal rates  who  are  making  this  difference  between  those  rates  and  the  present 
abnormally  high  rates. 

Furthermore,  had  tliis  bill  b(Tome  a  law  no  ships  would  have  been  built  in 
this  country  by  private  capital,  in  the  belief  that  the  Government,  once  in  the 
ocean-carrying  trade,  would  gradually  extend  it  operations,  and  that  private 
capital  could  never  compete.  Tiierefore  the  un])recedented  nuinl^er  of  ships  now 
building  in  this  country  by  private  capital  would  not  have  been  built. 

The  bill  now  under  consideration  differs  from  the  original  bill  in  that  it  gives 
the  shipping  board,  to  be  created,  the  power  to  sell  or  lease  ships  (to  be  built 
or  purchased)  to  private  owners,  or  to  operate  them  thi'ough  a  Government- 
controlled  corporation ;  so  that,  as  it  reads,  the  Government  can  go  into  the 
ocean-carrying  trade,  and  in  view  of  the  fact  that  it  was  the  declared  purpose 
of  the  framers  of  the  original  bill  that  this  should  be,  there  would  be  every  rea- 
son for  the  public  to  believe  that  the  members  of  the  board,  appointees  of  the 
administration,  would  .so  order. 

In  the  event  of  leasing  to  private  owners  no  method  is  provided  as  to  whether 
the  lease  or  sale  shall  be  awarded  to  the  highest  bidder.  Otherwise,  if  they  are 
to  be  leased  on  the  terms  that  have  been  suggested— rates  of  interest  and  de- 
preciation far  below  commercial  rates — who  are  to  have  the  benefits  of  these 
bounties— and  subsidies  they  would  be — in  such  an  event?  Such  inducements 
would  attract  irresponsible  adventurers,  and,  in  the  event  of  their  failure,  the 
ships  would  fall  back  into  the  hands  of  the  Government. 

THE  FUTILITY  OF  ATTEMPTING,  THROUGH  LEGISLATION,  A  SOLUTION  OF  THE  PRESENT 
OCEAN   TRANSPORTATION   PROBLEMS. 

If  ships  were  purchased,  a  price  based  upon  present  fabulous  earning  power 
would  have  to  be  paid,  and  to  build  the  number  of  ships  that  the  appropriation 
contamplates  would  require  a  period  of  years,  at  a  cost  of  over  $100  per  ton, 
and  before  the  end  of  which  period  it  is  fair  to  assume  that  war  conditions 
will  have  ended  and  a  sufficient  supply  of  ships  of  all  nationalities  will  be 
available  to  meet  the  demands  of  our  exporters. 

WHAT  SHALL  BE  DONE  TO  DEVELOP  A  MERCHANT   MARINE? 

First,  remove  the  present  menace  of  Government  ownership  and  operation, 
i.  e.,  the  ship-purchase  bill,  and  let  nature  take  its  course.  In  the  belief  that 
the  ship-purchase  bill  of  a  year  ago  would  not  be  revived  an  unprecedented 


554    shippijStg  board,  naval  auxiliary,  and  merchant  marine. 

jiumbor  of  ships  were  contracted  for  in  tliis  country  for  tlie  foreign  trade, 
and  about  200  foreign-built  ships  have  been  transferred  to  the  American  flag. 
Therefore,  why  arrest  this  development  by  injecting  the  menace  of  Government 
participation  in  any  form,  except  to  equalize  the  cost  and  operation  of  ships 
when  necessary  ? 

Owners  of  American  ships  engaged  in  the  foreign  trade  are  now  accuundating 
large  surplus  earnings,  which,  in  the  absence  of  menace,  would  naturally  be 
applied  to  further  development. 

Capital  in  this  country  is  more  interested  in  shipping  than  ever  before,  and, 
with  tinancnig  facilities,  the  present  large  nucleus  of  American  ships  should 
develop  into  a  fleet  of  importance,  and  once  that  capital  is  in  the  business 
it  is  1  lively  to  remain  through  good  and  bad  times. 

REGULATING    WATER    RATES. 

This  would  1)6  impracticable  and  unworkable.  Ships  receive  nothing  from 
the  State  and  can  not  be  forced  to  operate.  To  apply  interstate-connuerce- 
regulations  would  eliminate  the  tramp  steamer  and  hamper  the  regular  lines. 
There  is  no  more  resison  to  fix  ocean  freights  than  to  fix  the  prices  of  the 
products  of  the  mill.  A  ship  is  a  factory  producing  transportation,  and  the 
price  of  this  commodity  must  be  governed  by  conditions  of  supply  and  demand, 
as  are  the  prices  of  all  other  commodities.  Every  steamship  man  and  every 
important  shipper  in  the  country  would  confirm  this. 

Controlling  practices  in  steamship  l)usiness  is  another  matter  and  could  be 
dealt  with. 

An  American  merchant  marine  half  Government  owned  and  half  privately 
owned  can  not  exist  together.  It  must  be  one  or  the  other.  If  the  Government 
goes  into  the  business  on  the  small  scale  contemplated,  it  will  be  the  opening 
wedge,  which  will  be  driven  home  to  the  limit,  and  privately  owned  ships  will 
eventually  entirely  disappear. 
Yours,  very  truly, 

Geo.  S.  Dearborn. 

Hon.  J.  W.  Alexander, 

Chairman  Comviittce  on  Merchant  Marine  and  Fisheries, 

House  of  Representatives,  Washington.  D.  C. 

xllso  a  letter  from  Mr.  George  L.  Duval,  chairman  of  maritime 
committee  of  the  Merchants'  Association  of  New  York : 

New^  York,  February  2Jf,  1916. 
Hon.  J.  W.  Alexander, 

Chairman  House  Committee  on  Merchant  Marine  and  Fisheries, 

Washington,  D.  C. 
Dear    Sir:  This    association   desires   to   express   its   opposition   to   the   bill 
(H.  R.  10500)    "for  the  purpose  of  encouraging,   developing,   and   creating  a 
naval  auxiliary,  a  naval  reserve,  and  a  merchant  marine,"  because  in  its  judg- 
ment the  provisions  of  the  bill  will  not  accomplish  the  purpose  stated. 
This  bill  contemplates — 

(a)  The  construction  or  purchase  of  merchant  vessels  by  the  Government. 

(b)  The  operation  of  such  vessels  through  a  Government-controlled  cor- 
poration. 

Neither  of  these  purposes  is  desirable,  nor  is  it  likely  that  they  will  be 
effective  in  operation. 

It  is  furthermore  practically  inevitable  that  the  provisions  noted  above,  so 
far  from  encouraging  private  enterprise  to  provide  additional  shipping  facili- 
tes,  will  on  the  contrary  effectually  prevent  private  capital  from  being  thus 
employed  by  reason  of  the  invariably  destructive  effect  of  governmental  com- 
petition with  private  undertakings. 

This  association  has  hitherto  carefully  studied  the  results  of  Government 
operation  of  public  utilities  and  other  economic  undertakings,  and  it  is  con- 
vinced that  in  an  economic  sense  such  governmental  undertakings  are  extremely 
harmful.  It  may  be  stated  as  a  general  proposition  which  can  be  sustained  by 
abundant  proof  that  Government  undertakings  in  the  economic  field  are  never 
as  efficient  and  never  as  economical  as  private  undertakings;  that  such  Gov- 
ernment undertakings,  not  being  dependent  upon  their  earnings,  but  being  sup- 
ported from  the  Treasury,  tend  to  exclude  private  undertakings  from  similar 
fields  for  the  reason  that  private  capital  will  not  be  risked  against  Government 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      555 

competition  not  based  upon  their  true  cost ;  and,  further,  that  the  harmful  effect 
of  creatine:  great  armies  of  pul)lic  employees  in  connection  with  business  under- 
takings is  extremely  serious. 

We  believe,  therefore,  that  the  main  and  probably  the  sole  result  of  this 
bill  would  be  to  prevent  the  entrance  of  private  capital  into  the  building  of 
merchant  ships  and  to  put  the  Government  squarely  into  the  business  of  build- 
ing and  operating  merchant  ships  in  competition  with  those  now  existing,  with 
great  detriment  to  the  latter. 

This  association  has  hitherto  during  a  series  of  years  consistently  contended 
that  the  practical  nonexistence  of  an  American  merchant  marine  is  due 
mainly — 

(a)  To  the  economic  disabilities  arising  from  the  lesser  cost  of  constniction 
and  operation  of  foreign-built  sliii)s  as  compared  with  American  ships. 

(b)  To  the  disabilities  imposed  upon  American  shipping  as  the  result  of  the 
navigation  laws. 

The  association  has  further  contended  that  in  order  to  counterbalance  these 
disabilities  and  to  produce  an  economic  parity  between  American  and  foreign 
built  ships,  some  form  of  subvention  or  subsidy  should  be  provided  for  American 
shii^ping  under  such  conditions  that  its  benefits  should,  with  certainty,  accrue 
to  American  citizens  and  not  to  the  builders  of  foreign  ships.  Such  subvention 
might  properly  take  the  form  either  of  a  direct  bonus  to  American  shipowners 
for  the  construction  of  vessels  suitable  to  be  used  as  naval  auxiliaries  in  the 
case  of  necessity,  or  mail  contracts  of  sufficient  liberality  to  make  it  profitable 
to  operate  American  ships  upon  routes  from  which  no  profit  can  be  derived 
under  existing  conditions. 

The  justification  for  the  outlay  necessary  under  such  proposed  subvention  is 
foiuid  in  the  fact  that  it  is  to  be  applied  to  supply  the  necessary  element 
required  by  the  Navy  in  the  national  defense,  namely,  a  national  merchant 
marine  with  all  the  facilities  necessary  to  repair,  overhaul,  and  replace.  There- 
fore such  expense  should  properly  be  met  by  the  Nation  as  a  whole.  Its  result 
would  be  the  stimulation  of  private  enterprise  in  shipbuilding  as  contra- 
distinguished from  the  discouragement  to  such  private  enterprise  which  would 
result  from  the  form  of  expenditures  proposed  by  the  Alexander  bill,  namely, 
direct  investment  of  capital  by  the  Government  in  tonnage  to  be  used  in  com- 
petition with  private  enterprise. 

The  association  has  further  advocated  the  creation  of  a  shipping  commission 
composed  of  practical  men  of  large  experience,  not  dominated  by  ex  officio 
members,  which  shipping  board  should  concern  itself  with  the  investigation 
of  economic  conditions  affecting  the  operation  of  shipping,  the  devising  of  reme- 
dies for  conditions  found  to  be  adverse,  and  the  development  of  such  modifi- 
cations of  the  navigation  laws  as  will  tend  to  make  them  a  help  instead  of  a 
hindrance  to  the  profitable  operation  of  an  American  merchant  marine. 

We  do  not  think  that  any  of  the  fundamental  propositions  which  we  have 
indicated  will  be  promoted  by  the  terms  of  the  Alexander  bill.  Hence  our 
opposition  to  it. 

As  a  further  expression  of  our  views  upon  this  subject  we  have  pleasure  in 
inclosing  herewith  copy  of  resolutions  adopted  by  this  association  following  a 
report  of  the  association's  maritime  committee,  appended  to  those  resolutions, 
which,  together  with  this  letter  we  respectfully  request  you  to  present  to  the 
committee  and  to  include  as  a  part  of  the  record. 
Yours,  very  truly. 

Merchants'  Association  of  New  York. 
By  G.  L.  Duval, 

Chairman  Maritime  Commit1('r. 


[Greater  New  York,  Nov.  22,  1915.] 

Advocates  a  Commission  for  Merchant  Marine. 

merchants'  association  believes  that  men  experienced  in  maritime  affairs 

SHOULD  be  asked  TO  INVESTIGATE  CONDITIONS  AND  PROPOSE  REMEDIES,  THAT 
HARMFUL  NAVIGATION  LAWS  SHOULD  BE  REPEALED,  AND  THAT  THE  LA  FOLLETTE 
LAW    SHOULD   BE   ABROGATED. 

Upon  the  basis  of  a  report  made  by  its  maritime  committee  and  in  accordance 
with  action  previously  taken,  the  merchants'  association  has  defined  its  attitude 
upon  measures  designed  to  rehabilitate  the  American  merchant  marine. 


556      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

The  members  of  the  merchants'  association's  maritime  committee  are :  Mr. 
George  L.  Duval,  chairman ;  Mr.  Cliarles  D.  Barry,  Mr.  Guy  Van  Amringe,  Mr. 
Silas  D.  Webb,  and  Mr.  James  G.  White. 

In  view  of  the  agitation  of  the  subject  and  of  the  possibility  of  some  action 
upon  it  during  the  approaching  session  of  Congress,  President  William  Fellowes 
Morgan  asked  the  committee  to  make  a  special  report  upon  the  present  situa- 
tion. This  the  committee  did,  and  with  its  report  it  submitted  a  form  of  pre- 
ambles and  resolutions  defining  the  position  of  tho  association. 

RESOLUTIONS   ADOPTED. 

These  preambles  and  resolutions,  after  being  carefully  considered  and  dis- 
cussed, with  the  report  by  the  board  of  directors,  were  adopted  as  follows : 
"  Whereas  the  United  States  Navy  requires  for  elliciency  in  the  hour  of  emer- 
gency a  fleet  of  auxiliary  tonnage,  which  a  merchant  marine  alone  can 
provide ;  and 
"  Whereas  the  creation  of  such  merchant  marine  has  hither  to  been  prevented 
by  the  more  profitable  employment  offered  to  capital  in  the  internal  devel- 
opment of  the  country,  and  by  the  restrictions  which  our  navigation  laws 
have  placed  on  the  operation  of  the  United  States  tonnage  coming  in  com- 
petition for  the  world's  commerce,  with  foreign  tonnage ;  and 
"  Whereas  to  meet  the  conditions  arising  from  the  existing  war  and  to  induce 
citizens  of  the  United  States  to  acquire  foreign  tonnage  and  bring  it  under 
United  States  registry,  the  Congress  authorized  the  President  to  suspend 
for  a  term  some  of  the  provisions  of  the  navigation  laws ;  and 
"  Whereas  the  expectations  of  the  Government  from  the  suspension  of  the  mos 
burdensome  requirements  of  the  navigation  laws  were  disappointed,  for  the 
reasons  that  the  purchase  of  foreign  tonnage  for  American  registry  was 
impracticable  because  of  prohibitive  prices  and  because  capital  was  unwill- 
ing to  enter  into  business  operations  depending  for  their  success  on  the 
tolerance  of  Government  in  respect  to  the  suspension  of  such  requirements ; 
and 
"  Whereas  this  failure  of  the  Government's  expectations  gave  rise  to  a  project 
of  Government  purchase  and  operation  of  tonnage  in  commercial  pursuits, 
which  proposition  this  association  has  hitherto  opposed  for   the   reason, 
among  others,  that  the  investment  of  private  capital  iii  shipping  would  be 
practically  debarred  by  reason  of  the  adverse  conditions  resulting  from 
Government  competition ;  and 
"  Whereas  the  provisions  of   the  seamen's  act — commonly   known  as   the  La 
Follette  Act — add  new  burdens  to  the  operations  of  United  States  tonnage 
and  create  conditions  of  further  heavy  discrimination  to  the  advantage  of 
foreign  tonnage,  and  therefore  still  further  discourage  the  investment  of 
capital  in  United  States  tonnage :  Be  it 
"  Resolved,  That  the  Merchants'  Association  of  New  York  reaffirms  Its  advo- 
cacy of  Government  aid  to  a  merchant  marine  to  the  extent  and  for  the  time 
necessary  to  offset  the  conditions  that  now  impede  its  development ;  and 

"  Resolved,  That  it  is  opposed  to  the  purchase  or  operation  by  the  Govern- 
ment of  ships  for  commercial  purposes ;  and 

"  Resolved,  That  it  is  in  accord  with  the  adverse  opinion  held  in  shipping 
circles  generally  concerning  the  La  Follette  seamen's  act,  and  therefore  urges 
Its  repeal ;  and 

"  Resolved,  That  inasmuch  as  temporary  suspension  of  portions  of  the  navi- 
gation laws  has  proven  of  no  avail,  in  the  opinion  of  this  board  those  portions 
of  the  navigation  laws  which  unduly  impede  the  building  and  operation  of 
American  ships  should  be  permanently  repealed ;  and 

"  Resolved,  That  it  favors  the  creation  of  a  merchant  marine  commission, 
composed  of  citizens  experienced  in  maritime  affairs,  for  the  purpose  of  fully 
investigating  the  conditions  which  now  operate  against  American  shipping,  and 
of  reconuuending  such  revision  of  the  laws  as  may  be  desirable  and  necessary." 

REPORT   OF   THE    COMMITTEE. 

The  report  of  the  committee,  which  was  adopted  as  a  memorandum  to  Presi- 
dent Morgan,  was  as  follows : 

"  Tour  committee  deems  it  opportune,  in  view  of  the  approaching  session  of 
Congress,  to  reaffirm  its  views  concerning  a  national  merchant  marine  and  the 
collateral  subjects  now  engaging  public  attention. 


SHIPPING  BOARD,  NAVAi  AUXILIAHY,  AND  MEKCHANT  MARINE.      557 

"  The  merchants'  association  has  for  the  past  15  years  earnestly  advocated 
necessary  assistance  from  the  Government  for  the  development  of  a  merchant 
marine  of  national  construction  as  an  essential  adjunct  to  the  Navy  in  the 
national  defense.  It  has  been  obliged  to  oppose  the  various  subsidy  measures 
considered  by  the  Congress  during  that  period  because  none  of  them  would 
serve  that  purpose  effectively.  The  Navy,  which  is  the  just  pride  of  the  entire 
country,  requires  for  its  efficiency  in  the  hour  of  emergency  a  fleet  of  auxiliary 
tonnage,  which  a  merchant  marine  would  provide.  An  integral  part  of  such 
requirement  is  the  facility  to  repair,  overhaul,  and  replace  such  tonnage,  for 
which  purpose  more  shipyards  are  necessary,  and  for  this  reason  and  on  be- 
linlf  of  shipbuilding  In  the  United  States  the  association  has  opposed  any  grant 
of  pulilic  money,  directly  or  indirectly,  to  foreign  tonnage,  even  when  acquired 
by  citizens  of  the  United  States  and  transferred  to  our  flag." 

DECLINE   OF    SHIPBUILDING. 

•'  From  an  important  industry,  as  it  was  prior  to  the  Civil  War,  shipbuilding 
in  the  United  States  languished  until  it  became  practically  confined  to  tonnage 
for  coastwise  purposes.  The  two  principal  causes  for  the  lapse  were  the 
more  profitable  employment  offered  to  capital  in  the  internal  development  of 
the  country  and  the  restrictions  which  our  navigation  laws  have  placed  on 
the  operation  of  United  States  tonnage  coming  in  competition  witli  foreign 
tonnage  for  the  world's  commerce,  including  our  own. 

"  The  association  has  sedulously  avoided  making  any  claim  upon  Government 
in  the  name  of  commerce  on  behalf  of  a  merchant  marine  because  commerce 
has  not  required  transportation  under  the  national  flag  but  has  progressed 
l)y  inviting  free  competition  for  its  service  of  the  world's  tonnage,  of  which 
there  has  been  an  abundant  supply.  Whatever  satisfaction  would  accure  from 
carrying  our  products  to  foreign  markets  in  vessels  flying  our  flag  and  bringing 
back  foreign  pro(lHcts  under  the  same  auspices,  it  is  not  to  be  expected  that  a 
greater  demand  abroad  or  at  home  would  ensue,  or  that  consumers  would  be 
willing  to  pay  a  higher  price  because  of  the  carrying  flag." 

EFFECT    OF    THE    WAR    IN    EUROPE. 

"  Freight  rates  on  ocean  routes  generally  at  the  outbreak  of  the  war  in 
Europe  were  at  a  low  level  and,  without  Government  aid,  would  not  permit 
tonnage  flying  the  United  States  flag  to  operate.  Had  there  been  at  that  time, 
or  previously,  a  considerable  merchant  marine  of  the  United  States  it  would 
either  have  replaced  to  a  measurable  extent  the  foreign  tonnage  in  operation 
or  have  been  redundant.  It  would  have  been  a  national  asset  through  the  ad- 
vantage gained  by  the  higher  freight  rates  that  supervened,  but  its  advantage 
to  commerce  would  be  limited  to  the  premium  of  insurance  attaching  to  war 
risk  on  belligerent  tonnage,  because  it  is  not  to  be  expected  that  the  owners  of 
such  tonnage  would  forego  the  higher  fi-eights  obtainable. 

"  To  meet  the  conditions  caused  by  the  war  and  to  induce  citizens  of  the 
United  States  to  acquire  foreign  tonnage  and  bring  it  under  United  States 
registry  the  Congress  authorized  the  President  to  suspend  for  a  term  some  of 
the  conditions  of  the  navigation  laws  that  made  it  impracticable  to  operate 
tonnage  of  the  United  States  in  competition  with  foreign  tonnage,  and  a  limited 
amount  of  foreign  tonnage  previously  owned  or  controlled  by  citizens  of  the 
United  States  was  transferred  to  United  States  registry.  As  far  as  your  com- 
mittee is  informed,  however,  no  foreign  tonnage  was  acquired  for  that  purpose 
under  the  indulgence  granted  by  the  suspension  of  the  onerous  requirements  of 
the  navigation  laws ;  indeed,  the  purchase  of  tonnage  at  the  price  it  was  held 
liecame  practically  prohibitive,  and  capital  was  unwilling  to  undertake  an 
operation  depending  for  its  success  on  the  tolerance  of  Government  in  respect 
to  the  suspension  of  such  requirements.  Among  the  provisions  of  the  navigation 
laws,  that  which  requires  the  watch  officers  to  be  citizens  of  the  United  States 
is  the  most  burdensome  by  reason  of  the  higher  wages  commanded  by  a  limited 
class ;  yet  without  such  provision  the  value  of  a  merchant  marine  as  a  reliance 
of  the  Navy  is  greatly  impaired,  and  your  committee  is  of  the  opinion  that  the 
provision  as  a  permanence  is  a  wise  and  necessary  one,  without  prejudice  to 
the  justification  for  a  temporary  suspension  under  the  conditions  which 
prevailed." 

32910—16 36 


558      SHIPPING   liOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINK. 

thp:  ship-pukohask  bii.i.. 

"  The  expectations  of  the  Govermnent  fr<»in  the  susiyeusion  of  the  most  bur- 
densome reqiiirements  of  the  navigations  laws  were  disappointed  and  gave  rise 
to  a  project  of  (Government  purchase  and  operation  of  tonnage  in  commercial 
pursTiits.  The  association,  at  the  request  of  the  Chamber  of  Commerce  of  the 
United  States,  expressed  its  opinion  on  that  project  and  stated  its  reasons  for 
an  adverse  view,  which  may  be  paraphrased  and  amplified  as  follows: 

"  It  would  he  a  i)ernicious  departure  from  the  functions  of  Government  for 
the  relief  of  a  department  of  commerce  from  the  effect  of  natural  causes,  and 
would  establish  a  precedent  that  every  other  department  of  commerce  would  in 
its  turn  be  entitled  to  invoke.  Your  committee,  in  stating  these  views,  is  not 
unmindful  of  the  right  of  Government  to  control  and  suppress  oppression,  but 
it  is  not  oppression  that  confronts  us.  The  phenomenal  advance  in  freight  rates 
does  not  bear  upon  the  commerce  of  the  United  States  alone ;  it  is  world- 
wide, affecting  all  commerce,  and  obeys  the  law  of  supply  and  demand.  The 
enforced  withdrawal  from  the  service  of  commerce  of  a  large  volimie  of  the 
world's  merchant  marine,  the  requisition  by  belligerent  Governments  of  a 
large  proportion  of  tonnage  remaining  in  operation,  and  the  destruction  of  a 
considerable  proportion  of  that  which  w^as  in  service  before  the  war  are  each 
contributing  causes  to  the  present  scarcity.  It  is  evident  that  the  total  of 
tonnage  thus  diverted  from  its  ordinary  pursuits  is  greater  than  the  curtail- 
ment of  commerce  caused  by  the  war,  so  that  which  continues  to  be  available 
is  in  position  to  command  its  own  price,  just  as  the  scarcity  of  any  commodity 
woidd  augment  its  value  in  proportion  to  the  needs  of  the  comnninity." 

I'KOVISION    INADEQUATE.  " 

"Even  if  jiistitication  could  be  shown  for  the  project  of  Government,  the  ap- 
propriation proposed  woidd  be  totally  inadequate  to  acquire  the  tonnage  re- 
quired by  the  commerce  of  the  United  States.  The  motive  being  to  maintain 
a  lower  level  of  freight  rates  than  is  otherwise  accessible  to  commerce,  it  is 
evident  that,  however  unwittingly,  favoritism  would  ensue  either  in  selecting 
the  routes  to  be  served  or  in  the  bookings  secured  by  shippers  should  the  ton- 
nage be  fairly  distributed  over  all  the  roiites  of  commerce.  There  is,  more- 
over, no  appreciable  volume  of  existing  tonnage  open  to  Government  purchase — 
unless  it  could  come  to  terms  with  the  owners  of  interned  tonnage  without 
violating  the  laws  of  neutrality.  The  ownership  and  operation  of  tonnage  by 
Government  would  be  harmful  to  the  cause  of  the  merchant  marine  in  placing 
an  embargo  upon  private  enterprise  in  that  department  of  commerce,  while  in 
an  adequate  sense  and  in  its  continuance  a  merchant  marine  relies  upon  pri- 
vate enterprise.  The  extraordinary  measures  proposed  by  Government  are  de- 
signed to  meet  the  emergency  of  an  era  of  high  freights.  Should  Government 
resolve  to  acquire  a  merchant  marine  through  the  medium  of  our  shipyards, 
it  w^ould  give  a  happy  impetus  to  shipbuilding,  but  the  tonnage  would  not,  it  is 
to  be  hoped,  be  available  until  after  the  war  and  the  resumption  of  normal 
conditions.  In  this  case,  or  in  any  case,  upon  the  return  to  normal.  Govern- 
ment would  have  an  enterprise  on  hand  that  could  not  compete  with  private 
enterprise  more  economically  conducted,  free  of  the  '  red  tape '  inseparable 
from  public  business  and  managed  by  experience  and  judgment  that  it  would 
be  difficult,  if  possible,  for  a  department  of  Government  to  acquire." 

I'ARTNEKSHIP    IMPOSSIBLE. 

"A  partnership  between  Government  and  private  interests,  as  was  suggested 
in  the  ship-purchase  bill,  is  manifestly  impracticable.  The  control  in  such  a 
partnership  would  necessarily  be  with  the  Government,  while  the  management 
would  depend  on  the  efficiency  of  the  junior  partners,  hampered  by  conditions 
attaching  to  all  governmental  functions  and  repugnant  in  the  conduct  of  com- 
merce. Finally,  it  is  obvious  that  even  the  greater  economy  in  the  administra- 
tion of  a  private  enterprise  would  not  be  an  inducement  to  enter  into  competi- 
tion with  Government,  because  the  advantage  in  periods  of  high  freights 
would  be  neglected  by  Government  while  essential  to  private  interests,  which 
during  periods  of  unremunerative  freight  would  have  its  own  losses  to  foot, 
whereas  Government  has  the  power  of  distribution." 


SHIPPING  BOARD.  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE.      559 

THE   seamen's   act. 

"  Under  these  cireumstauces  and  in  face  of  the  amelioration  granted  by  the 
(Jovernment  from  the  conditions  of  the  navigation  laws  which  impBded  devel- 
opment of  a  merchant  marine,  the  seamen's  act,  commonly  known  as  the 
La  Follette  bill,  was  enacted  by  Congress,  to  take  effect  at  an  early  date,  de- 
signed '  To  promote  the  welfare  of  the  American  seamen  in  the  merchant  marine 
of  the  United  States,'  etc.  Its  provisions  add  new  burdens  to  the  operation  of 
United  States  tonnage.  So  far  as  the  burdens  bear  on  all  alike  it  is  not  a 
hardship  upon  the  operation  of  tonnage  because  it  will  be  covered  in  the  freight 
rates  and  made  a  charge  upon  commerce,  ultimately  upon  the  consumer.  In 
ihe  coastwise  trade  such  an  effect  is  inevitable,  but  in  the  foreign  service  the 
act  discriminates  against  United  States  tonnage,  upon  which  some  of  its  re- 
quirements impose  exclusivelj',  while  the  requirements  that  equally  affect  for- 
eign tonnage  apply  only  to  commerce  with  the  United  States.  Thus,  the  act  in 
denying  to  United  States  tonnage  a  competitive  status  on  foreign  routes  im- 
pairs its  value  and  still  further  discourages  the  investment  of  capital  therein. 
The  act  has  also  a  harmful  effect  upon  the  foreign  connnerce  of  the  United 
States  in  competing  with  other  foreign  countries  for  the  markets  of  the  world, 
inasmuch  as  the  rates  of  freight  outward  and  homeward  from  and  to  the 
United  States  must  necessarily  be  higher  than  the  rates  of  freight  outward  and 
homeward  from  foreign  countries  to  the  same  markets. 

"  It  is  evident,  therefore,  that  the  law  is  a  gi'ievance  to  a  national  merchant 
marine  which  can  not  make  headway  against  discriminating  charges.  Your 
committee  respectfully  suggests  that  if  the  seafaring  class  is  a  natural  and  ex- 
clusive ward  of  tlie  Government,  then  provision  should  be  made,  at  the  public 
cliarge.  for  the  required  care  and  protection,  so  that  the  expense  is  not  visited 
Mil  an  industry  already  so  handicapped  as  to  put  it  out  of  competition,  par- 
ticularly when  that  industry  is  one  upon  which  the  nationnl  defense  is  in  no 
minor  degree  dependent." 

SHIPPING   COMMISSION   FAVORED. 

"  Your  committee  strongly  favors  the  appointment  of  a  shipping  commission, 
composed  of  practical  men,  to  take  cognizance  of  all  matters  pertaining  to  a 
merchant  marine,  the  commission  to  be  required  to  investigate  the  conditions 
that  make  again.st  a  national  merchant  marine  and  to  report  to  the  Congress 
upon  such  aid  as  is  necessary  to  offset  the  impediments  imposed  by  law  or 
otherwise. 

"  Your  committee  believes,  notwithstanding  the  scandals  associated  with 
the  name  of  subsidy  in  the  past  and  the  effort  made  in  recent  years  to  appro- 
priate such  a  public  grant  to  private  advantage,  that  a  campaign  -of  ed\tcation 
throughout  the  country  on  behalf  of  a  subvention — by  whatever  name  it  is 
called — to  a  merchant  marine  of  national  construction,  as  an  adjunct  to  the 
Navy  in  the  national  defense,  will  meet  with  the  response  that  the  citizens  of 
the  United  States  are  accustomed  to  give  to  a  call  upon  their  patriotism.  It 
believes,  moreover,  that  there  has  not  hitherto  been  a  more  propitious  time  for 
such  a  call  than  the  present  when  the  transcendent  need  of  measures  on  behalf 
of  the  national  defense  is  so  apparent  to  all  open-minded  citizens. 

"  Your  committee  is  confirmed,  accordingly,  in  its  advocacy  of  legislative  aid 
to  a  national  merchant  marine  to  the  extent  and  for  the  time  necessary  to  offset 
the  conditions  that  now  impede  its  development ;  it  is  opposed  to  the  ship-pur- 
("liase  project  of  the  Government ;  it  is  in  accord  with  the  adverse  opinion  held  in 
shipping  circles  generally  concerning  the  La  Follette  bill,  and  is  in  favor  of  the 
creation  of  a  merchant  marine  commi.ssion  composed  of  citizens  of  experience 
in  maritime  affairs." 

(Thereupon    at    5.40   o'clock   the   hearings   were    adjourned    until 
Saturday,  February  26.  1916.  at  10.30  o'clock  a.  m.) 


CREATING  A  SHIPPING  BOARD,  A  NAVAL  AUXILIARY,  AND  A 
MERCHANT  MARINE. 


Committee  on  the  Merchant  Marine  and  Fisheries, 

House  of  Eepresentatives, 
Washington,  D.  C,  Felruary  W,  1916. 
The  committee  met  at  10.30  o'clock  a.  m.,  Hon.  Joshua  W.  Alex- 
ander (chairman)  presiding. 

The  Chairman.  Mr.  Penton,  of  Cleveland,  is  here  and  he  has 
asked  to  be  heard  on  this  bill.  If  there  is  no  objection,  we  will 
proceed. 

Mr.  Curry.  Mr.  Chairman,  you  will  remember  that  Gov.  Gillett 
wanted  to  speak  to  us  for  just  about  five  minutes.     That  is  all  he 
wants,  unless  we  care  to  ask  some  questions. 
The  Chairman.  Very  well.  Governor. 

STATEMENT  OF  HON.  J.  N.  GILLETT,  OF  SAN  FRANCISCO,  CAL. 

Mr.  Gillett.  I  appear  here  at  the  request  of  the  Matson  Naviga- 
tion Co.,  of  San  Francisco,  one  of  the  largest  steam-shipping  com- 
panies on  the  Pacific  coast,  and  one  that  runs  a  regular  line  of 
steamers  from  San  Francisco  to  the  Hawaiian  Islands. 

The  Chairman.  What  is  your  official  position  now,  Governor  f 
You  are  the  ex-governor  of  the  State  of  California  ? 

Mr.  Gillett.  Yes.  I  hold  no  official  position  now.  Formerly,  I 
was  a  member  of  this  honorable  body;  then  I  became  governor  of 
California.  I  now  have  no  position  at  all  in  an  official  way- 
Mr.  CuRRT.  You  did  not  lose  it? 

Mr.  Gillett.  I  did  not  lose  it  because  I  was  beaten,  but  because  I 
wanted  to  quit. 

The  Chairman.  What  is  your  business  now? 

Mr.  Gillett.  Attorney  at  law. 

The  Chairman.  And  you  are  appearing  here  as  attorney  for  the 
Matson  Navigation  Co.? 

Mr.  Gillett.  I  am  appearing  for  the  Matson  Navigation  Co.,  but 
not  as  its  attorney.  There  are  only  one  or  two  words  that  I  wish  to 
say  with  reference  to  a  few  amendments  which  I  want  to  offer.  As 
I  understand,  the  purpose  of  this  bill  is  to  encourage  our  foreign 
shipping  and  is  not  to  interfere  with  the  coastwise  trade.  That,  I 
undertake  to  be  the  prime  purpose  of  the  bill,  from  reading  its  pro- 
visions. 

In  section  4,  which  is  the  section  to  which  I  wish  to  call  the  com- 
mittee's particular  attention,  appears  the  following  language : 

The  board  is  hereby  authorized  to  charter,  lease,  or  sell  the  vessels  purchased, 
chartered,  or  constructed  by  the  United  States,  as  herein  provided,  to  any 

561 


662     SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

corporation,  firm,  or  individual,  a  citizen  or  citizens  of  tlie  United  States,  de- 
siring to  use  tliem  in  tlie  transportation  of  tiie  commerce  of  tlie  United  States 
witli  foreign  countries,  or  witli  Alasl^a,  tlie  Panama  Canal  Zone,  the  Philippine 
Islands,  the  Hawaiian  Islands,  or  the  islands  of  Porto  Rico,  etc. 

Alaska  and  the  Hawaiian  Islands  are  within  the  coastwise  trade 
and  they  form  a  very  important  part  of  the  coastwise  trade  of  the 
Pacific  coast. 

Mr.  Edmonds.  And  Porto  Rico  also. 

Mr.  GiLLETT.  And  Porto  Rico  on  the  eastern  coast.  We  have  had 
for  a  number  of  years  on  the  Pacific  coast  men  who  have  been  busily 
engaged  in  building  up  commerce  between  the  Hawaiian  Islands  and 
the  mainland  and  Alaska  and  the  West  Coast  States.  They  feel 
that  this  bill,  if  it  permits  a  corporation  formed  by  the  United  States 
and  controlled  by  the  United  States  to  take  part  in  this  coastwise 
trade,  will  seriously  injure  the  business  which  they  have  established 
and  which  they  have  built  uj),  and  they  see  no  reason  why  the  coast- 
wise trade  of  the  Pacific  coast  should  not  be  protected  the  same  as  the 
coastwise  trade  of  any  other  part  of  the  country.  In  other  words, 
they  feel  that  the  coastAvise  trade  between  San  Francisco  and  Hono- 
lulu should  be  as  carefully  protected  and  cared  for  as  the  coastwise 
trade  between  New  York  City  and  Galveston. 

But  I  might  say  that  the  Matson  Navigation  Co.  is  running  a 
splendid  service  between  the  Hawaiian  Islands  and  San  Francisco. 
Capt.  Matson  started  a  number  of  years  ago  in  a  small  way,  with  a 
small  sailing  ship,  and  he  has  been  building  up  the  business  until 
now  there  are  seven  or  eight  large  vessels  engaged  in  the  business, 
and  the  company  has  under  construction  at  the  Union  Iron  Works,  at 
San  Francisco,  a  magnificent  ship  that  will  cost  o\ev  a  million  and  a 
half.  They  have  built  up  this  trade,  and  they  are  giving  a  splendid 
service  at  reasonable  rates.  They  want  to  be  protected  the  same  as 
the  coastwise  trade  in  any  other  section  of  the  country  is  protected, 
and  they  are  fearful  that  this  bill ,  unless  it  is  properly  amended,  will 
interfere  with  this  trade.  Not  only  is  Capt.  Matson  fearful,  but  so 
are  other  San  Francisco  people  who  are  doing  a  business  with  Alaska. 
Therefore,  I  want  to  ask  that  this  section  4  be  amended  by  inserting 
the  following  after  the  word  "  President,"  in  line  20 : 

Provided,  lioivever,  That  no  vessel  built  without  the  United  States  or  owned, 
chartered,  or  leased  by  any  firm,  corporation,  or  association  in  which  the  United 
States  has  any  interest  shall  be  used  in  the  coastwise  trade  with  Alaska, 
Hawaiian  Islands,  or  Porto  Rico  if  such  trade  is  being  adequately  served  by  a 
regular  line  of  vessels  operating  between  the  United  States  and  such  places. 

Of  course,  if  there  is  no  regular  service,  or  if  it  is  not  being  ade- 
quately cared  for,  that  is  different;  but  as  long  as  a  regular  service 
exists  there,  and  regular  steamers  are  going  to  those  places,  and  the 
people  are  getting  adequate  service  (and,  of  coitrse,  the  question  of 
rates  will  be  fixed  by  the  board  which  this  bill  provides  for),  then 
I  can  see  no  reason  why,  and  the  Matson  Navigation  Co.  can  see  no 
reason  why,  there  should  be  this  discrimination. 

Mr.  Bruckner.  You  said  that  this  line  gives  satisfaction  at 
present  ? 

Mr.  GiLLETT.  Yes ;  it  is  a  splendid  line.  It  has  fine  steamers  and 
regular  sailing  days. 

Mr.  Bruckner.  It  sails  on  scheduled  days? 

Mr.  GiLLETT.  Yes;  it  sails  on  scheduled  days.  It  has  as  fine 
steamers  as  you  will  find  here  on  the  Atlantic,  with  music  on  some 


SJlll'lMNG  JJOAKD,  NAVAI.  AIJX  1 1.!  Ai{N  ^  A  XI)  Al  l-^ltC  H  ANJ    MARINE.      563 

of  the  ships,  and  everything  on  board  to  make  it  a  splendid  and  en- 
joyable trip.  And  they  are  building  another  fine  ship  at  the  Union 
Iron  Works  to  take  part  in  this  trade.  This  trade  has  been  built  up 
through  years  of  industry  and  through  hardship  until  now  it  is  one 
of  the  best-served  trades  in  the  country.  It  is  within  our  coastwise 
trade,  and  they  feel  that  they  ought  not  to  be  placed  in  a  position 
where  a  corporation  that  the  Government  controls  will  throw  into 
this  trade  a  lot  of  ships  that  have  been  bought  in  foreign  countries  at 
a  cheap  price.  We  have  no  trouble  with  the  coastwise  trade;  we  have 
abundant  for  that  trade. 

The  Chairman.  I  beg  your  pardon,  Governor,  but  the  testimony 
before  the  conmiittee  is  overAvhelming  to  the  contrary. 

Mr.  GiLLETT.  We  ought  not  to  have. 

The  Chairman.  No;  because  American  shipping  has  a  monopoly 
m  this  trade.  If  we  do  ha^■e  foreign  ships  coming  in  the  coastwise 
trade,  it  will  be  just  because  American  ships  do  not  give  the  people 
of  the  United  States  proper  facilities. 

Mr.  GiLLETT.  If  you  have  a  board,  Mr.  Chairman,  that  has  the 
power  to  regulate  rates  and  control  rates,  then  you  control  the  situa- 
tion, and  you  can  control  it  better  that  way  than  you  can  control 
It  by  permitting  foreign  companies  and  foreign  vessels  to  engage  in 
our  coastwise  trade,  it  seems  to  me. 

Mr.  Hardt.  You  do  not  consider  these  foreign  vessels — vessels 
which  belong  to  the  United  States  and  are  under  its  flag  and  its  rules 
and  regulations  ? 

Mr.  GiLLETT.  No ;  but  I  say  there  is  no  reason  why  the  United 
States  should  engage  in  the  coastwise  trade,  as  long  as  it  can  control 
it  by  your  shipping  board  and  its  power  to  regulate  rates.  I  under- 
stand that  the  purpose  of  this  bill  is  to  further  our  commerce  with 
foreign  nations,  in  order  that  our  flag  may  be  put  on  the  ocean 
again  in  the  foreign  trade,  not  that  we  want  to  tear  down  or  interfere 
with  or  make  difficult  the  way  of  those  who  have  for  years  been  en- 
gaged in  our  coastwise  trade.  There  is  no  reason  wdiy  the  Govern- 
ment should  engage  in  the  coastwise  trade,  when  you  have  a  board 
that  can  regulate  the  rates  as  well  as  the  railroads  to-day  are  regu- 
lated, and  I  think  we  ought  to  keep  up  in  this  country  a  great  many 
shipyards  and  have  them  well  equipped  to  build  ships;  and  if  we 
have  a  coastwise  trade  they  are  building  ships  for  that  coastwise 
trade.     That  is  a  vei\y  important  industry  in  this  country. 

Of  course,  if  the  bars  are  to  be  taken  down  and  the  coastwise  trade 
is  to  be  thrown  open  to  foreign-purchased  ships,  or  if  the  Government 
of  the  United  States  is  going  to  form  a  corporation,  in  which  it  has 
a  majority  interest,  and  go  into  the  coastwise  trade,  then  it  should 
throw  it  all  open.  We  feel  on  the  Pacific  coast,  where  that  is  part 
of  our  trade,  that  we  should  have  as  full  protection  as  you  have  here 
on  the  eastern  coast,  and  when  you  interfere  with  the  Alaskan  trade 
and  the  Hawaiian  trade — that  is,  coastwise  trade;  where  it  is  being 
regularly  served  and  adequately  served  with  splendid  ships — that 
you  are  interfering  with  business  that  has  been  built  up  by  American 
enterprise  and  American  industry  and  American  money. 

The  Chairman.  I  was  told  in  Honolulu  last  May  that  the  chamber 
of  commerce  and  commercial  organizations  of  that  city,  with  the  ex- 
ception of  1   vote,  had  voted  in  favor  of  excluding  the  Ha^^aiinn 


664      SHIPPJJS^G  BOAKD,  NAVAL  AUXILIARY,  AND  MEECHANT  MARINE. 

Islands  from  the  coastwise  trade,  and  of  permitting  foreign  ships 
trading  to  and  from  the  Pacific  coast  to  call  at  Honolulu  and  trans- 
port passengers  and  freight.  Now,  I  take  that  to  be  the  attitude  of 
those  people.  I  agree  with  you  that  the  facilities  are  being  constantly 
improved,  and  that  fact  ought  to  be  taken  into  consideration — not 
only  by  Matson,  but  by  others. 

Mr.  Burke.  I  would  like  to  ask  the  governor  a  question.  Suppose 
the  pending  bill  becomes  a  law  without  that  amendment 

Mr.  GiLLETT.  Yes. 

Mr.  Burke.  Do  you  suppose  for  one  instant  that  any  shipping 
board  is  going  to  be  so  foolish  as  to  establish  a  Government  line  in 
competition  with  any  other  lines  affording  adequate  transportation 
between  the  Pacific  coast  and  the  Hawaiian  Islands? 

Mr.  GiLLETT.  I  should  hardly  think  so;  I  should  hope  they  would 
not. 

Mr.  Burke.  Is  it  not  the  very  purpose  of  this  bill  to  develop  new 
lines  where  there  are  no  adequate  commercial  or  shipping  facilities 
now? 

Mr.  Gilleti  .  Yes. 

Mr.  Burke.  Then,  do  you  think  there  is  any  danger  of  a  shipping 
board  being  so  foolish  as  to  establish  a  line  between  the  Pacific  coast 
and  the  Hawaiian  Islands  if  there  are  adequate  transportation  facili- 
ties now? 

Mr.  GiLLETT.  When  you  get  a  lot  of  business  men  tied  up  with  the 
Government  in  shipping,  and  trade  may  be  pretty  hotly  pressed  in 
some  of  the  places  where  you  have  tried  to  establish  it,  and  they  find 
themselves  w^ith  a  great  many  ships  on  their  hands  and  operating  at 
a  loss,  then  they  might  turn  to  the  coastwise  trade  and  go  into  it  to 
save  themselves.  It  might  be  possible  to  do  it;  I  don't  know.  But 
if  the  provision  of  the  bill  is  that  they  can  not  do  it,  then  they  won't 
do  it. 

Mr.  Burke.  The  very  essence  of  your  amendment  is  that  they  shall 
not  establish  any  line  between  the  United  States  and  the  Hawaiian 
Islands  if  there  are  already  sufficient  transportation  facilities? 

Mr.  GiLLETT.  Yes.  And  also  that  there  shall  not  be  used  in  that 
trade  foreign-built  ships.  In  other  words,  that  foreign-built  ships 
shall  not  be  used  in  the  coastwise  trade  of  this  country.  This  bill 
now  permits  foreign-built  ships  to  engage  in  that  trade,  as  far  as 
the  Hawaiian  Islands,  Alaska,  and  Porto  Rico  are  concerned. 

Mr.  Burke.  That  would  be  true  if  the  board  would  be  so  foolish 
as  to  put  a  competing  line  there  when  there  are  already  sufficient 
transportation  facilities. 

Mr.  GiLLETT.  Yes;  but  suppose  some  other  company  in  which  the- 
Government  is  not  interested  should  establish  a  line  there,  with  the 
cheaply  constructed  ships  of  Europe,  in  competition  Avith  the  ships 
that  the  people  here  have  built  in  our  own  shipyards;  that  is  what 
this  bill  as  it  now  stands  makes  possible. 

Mr.  Edmonds.  That  is,  outside  of  Government  ownership  by  this 
GoA^ernment  corporation? 

Mr.  GiLLETT.  Yes;  outside  of  Government  ownership.  This 
amendment  which  I  have  offered  does  not  go  to  a  line  operated  by 
the  Government  alone,  but  it  is  intended  to  protect  that  trade,  that 
coastwise  trade,  from  vessels  that  are  constructed  outside  of  the 
United  States,  outside  of  American  shipyards,  purchased  cheaply 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      565 

wherever  they  can  be  purchased  anywhere  in  the  world,  and  thrown 
into  a  trade  which  is  not  a  very  large  trade,  and  compete  in  a  trade 
which  these  gentlemen  have  spent  their  lives  and  money  building  up, 
and  in  w^hich  they  are  using  American-built  sliips.  There  is  no  more 
reason  for  destroying  and  tearing  down  the  trade  they  have  built 
up  w^ith  the  Hawaiian  Islands  than  there  is  to  destroy  the  coastwise 
trade  from  New  York  to  Galveston  or  betw^een  any  other  coast  ports. 

The  Chair.aian.  Governor,  what  do  you  think  about  this  proposi- 
tion :  Suppose  a  line  were  established  from  New  York  to  the  Far 
East — Japan  or  China — going  from  New  York  to  San  Francisco  or 
Seattle,  and  thence  on  to  Japan,  and  back  by  way  of  Seattle  or  San 
Francisco  to  New  York,  and  calling  at  the  Hawaiian  Islands  going 
and  coming?  Would  you  say  that  that  line  should  not  be  permitted  to 
carry  freight  and  passengers  from  New  York  to  San  Francisco,  or 
take  part  of  its  cargo  from  New"  York  and  discharge  it  at  San  Fran- 
cisco, and  take  on  passengers  at  San  Francisco  to  go  to  Haw^aii,  and 
thence  proceed  on  her  journey? 

Mr.  GiLLETT.  Well,  that  would  then  be  bringing  these  vessels  right 
in  competition  with  the  coastwise  trade  of  this  country.  Such  a  ship 
in  such  a  voyage  might  also  stop  at  Charleston,  Savannah,  and  all 
other  way  ports.  Of  course,  if  that  is  what  the  Government  wants 
to  do,  it  can  do  it,  but  as  I  understand  it,  that  is  not  the  policy,  but 
the  policy  is  to  build  up  a  merchant  marine  to  engage  in  the  foreign 
trade  and  not  in  the  coastAvise  trade. 

The  Chairman,  That  has  been  suggested,  and  I  am  simply  trying 
to  get  your  opinion  on  this  point. 

Mr.  GiLLETT.  I  think  if  there  is  a  regular  line  of  steamers  operat- 
ing betAveen  New  York  and  San  Francisco,  handling  American  com- 
merce from  port  to  port,  that  trade  ought  not  to  be  interfered  Avith 
by  a  trade  that  is  established  for  an  over-sea  trade,  because  your  ships 
could  go  through  the  canal  and  direct  to  any  place  in  the  Pacific 
Ocean,  any  place  they  wanted  to  go,  Avithout  going  up  to  San  Fran- 
cisco or  Seattle  for  a  cargo,  because  that  Avould  be  interfering  Avith 
cargoes  that  are  necessary  to  maintain  our  coastAvise  trade.  That  is 
the  reason  I  said  I  think  it  Avould  interfere  Avith  the  coastwise  trade. 

Mr.  Hardy.  You  would  rather  the  commerce  of  the  United  States 
should  suffer  than  to  interfere  in  the  least  w^ith  the  coastAvise  trade? 

Mr.  GiLLETT.  No:  I  think  the  commerce  of  the  United  States  can 
be  protected,  and  Avill  not  suffer. 

Mr.  Hardy.  That  seems  to  have  been  the  idea  all  these  years,  until 
now  our  flag  has  gone  from  the  sea. 

Mr.  GiLLETT.  Yes;  but  if  you  are  going  to  maintain  your  flag  on 
the  sea  by  doing  both  the  foreign  commerce  and  the  coastAvise,  you 
may  destroy  the  coastAvise  trade  and  then  fail  to  build  up  the  foreign 
trade,  and  we  Avon't  have  either. 

Mr.  Hardy.  Hoav  is  it  possible  to  destroA'  the  coastwise  trade  when 
by  law  it  is  limited  to  ships  under  our  flag? 

Mr.  GiLLETT.  If  you  are  going  to  put  ships  in  there  in  competition 
Avith  ships  built  in  American  shipyards — ships  built  foreign  that  are 
cheaper— then  you  are  competing  Avith  men  who  have  gone  to  great 
expense  to  build  up  this  trade  and  who  can  not  compete. 

Mr.  Hardy.  Have  you  anv  objection  to  our  shipbuilders  being  able 
to  and  in  fact  they  are  building  cheaper  ships  than  exer  before? 


566     SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  GiLLETT.  I  think  they  out  to.  and  I  think  the  days  are  fast 
arriving  when  the}'  will  do  so. 

Mr.  Hardy.  Is  it  because  you  ha\e  paid  your  price  and  seriously 
object  to  ships  getting  any  cheaper,  because  somebody  can  buy  those 
cheap  ships  and  compete  with  you? 

The  Chairman.  Or  else  the  Government  make  up  the  diflference. 

Mr.  Hardy.  Or  else  the  Government  give  you  a  subsidy  ? 

The  Chairman.  Governor,  let  us  get  your  viewpoint  on  this  propo- 
sition. Suppose  the  Government  should  build  ships  in  Government 
navy  yards  or  privately  owned  shipyards  and  charter  those  ships  or 
sell  them  to  American  citizens  to  engage  primarily  in  the  foreign 
trade,  what  objection  would  there  be  to  those  ships  carrying  passen- 
gers and  freight  from,  for  instance,  New  York  to  San  Francisco 
and  then  proceed  from  San  Francisco  on  to  China  or  Japan?  Now, 
those  ships  were  built  in  American  shipyards  and  were  manned  by 
American  sailors. 

Mr.  GiLLETT.  I  would  have  no  objection  to  that  at  all. 

The  Chairman.  It  might  interfere  with  Mr.  Matson.  but  it  would 
be  a  great  convenience  to  the  people  of  the  Pacific  coast. 

Mr.  GiLLETT.  I  do  not  think  Mr.  Matson  has  any  objection  to  any 
ship  built  in  American  shipj^ards  and  operated  by  an  American  com- 
pany engaging  in  this  trade  to  Honolulu  if  it  wants  to. 

The  Chairman.  They  could  engage  in  the  coastwise  trade  as  a 
part  of  the  extended  journey. 

Mr.  GiLLETT.  He  has  no  objection  to  any  ship  that  is  built  in  this 
country  going  into  the  trade  that  he  is  engaged  in,  and  which  is 
operated  by  an  American  company  and  under  our  flag,  but  he  has 
objection  to  ships  engaging  in  the  trade  that  are  not  built  in  this 
country — ships  engaging  in  the  coastwise  trade  in  competition  with 
him  that  are  built  in  some  foreign  country  under  the  foreign-wage 
scale.  As  long  as  the  ships  are  built  in  this  country  and  built  by  the 
United  States  Government  and  sold  to  our  citizens  they  should  have 
a  right  to  engage  in  the  coastwise  trade  or  foreign  trade  and  have  all 
the  opportunities  they  can  get.  I  am  sure  Capt.  Matson  has  no  ob- 
jection to  that;  but  he  does  object  to  competition  by  foreign-built 
ships  with  his  American-built  ships. 

Mr.  Greene.  Is  it  not  also  the  fact  that  these  foreign-built  ships 
could  be  foreign  officered  and  foreign  manned? 

Mr.  GiLLETT.  Yes;  and  operated  under  foreign  conditions. 

Mr.  Greene.  By  authority  of  the  registry  bill  already  created,  if 
within  the  wisdom  or  belief  of  the  President  it  was  wise  to  do  so ;  it 
is  left  to  his  discretion.  Would  not  that  create  an  additional  compe- 
tion  that  would  be  unjust  to  the  coastwise  trade? 

Mr.  GiLLETT.  It  would  be  unjust  not  only  to  Capt.  Matson  but  to 
every  other  company  engaged  in  the  coastwise  trade  to-day.  They 
should  all  be  protected. 

The  Chairman.  Yes;  and  yet  that  legislation  was  promoted  here 
by  the  very  people  who  are  opposing  this  legislation  now. 

Mr.  Greene.  I  did  not  promote  any  such  legislation. 

The  Chairman.  You  did  not  have  anything  to  do  with  it.  The 
New  York  people  did  it — the  very  people  who  appeared  here  last 
Thursday  in  regard  to  this  bill. 

Mr.  Edmonds.  Have  you  read  the  regulations  in  regard  to  the 
freight  rates  in  this  bill? 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      567 

Mr.  GiLLETT.  I  have  not. 

Mr.  Edmonds.  You  do  not  know  what  they  are,  then? 

Mr.   GiLLETT.    No. 

Mr.  Edmonds.  You  would  not  want  to  say  whether  Capt.  Matson 
approved  those  regulations  or  not? 

Mr.  GiLLETT.  I  can  say  I  am  satisfied  Capt.  Matson  has  no  objection 
to  rates  being  regulated  at  all.  I  think  now  the  rates  from  San 
Francisco  to  Honolulu  are  very  cheap  over  his  lines,  and  he  can  have 
no  objection,  and  I  know  he  has  none,  to  rates  being  fairly  fixed  and 
established  by  the  board,  because  that  would  put  everybody  then 
on  the  same  basis. 

The  Chairman.  I  do  not  think  there  was  any  complaint  of  the  rates 
when  I  w^as  in  Honolulu  last  spring.     It  is  just  a  lack  of  facilities. 

Mr.  GiLLETT.  There  are  a  couple  more  amendments  that  I  will 
leave  with  the  committee  here.  In  the  same  section,  section  4,  after 
the  word  "corporation,"  in  line  23,  page  5,  in  that  part  which  reads: 

That  vessels  constructed  in  American  shipyards  and  navy  yards,  under  the 
provisions  of  this  act.  may  be  chartered,  leased,  or  sold  to  any  such  corporation, 
firm,  or  individual,  a  citizen  or  citizens  of  the  United  States,  for  use  in  the 
coastwise  trade  of  the  United  States,  particularly  the  trade  between  the  At- 
lantic, Gulf,  and  Pacific  coasts. 

Of  course,  if  it  is  intended  that  the  corporation  formed  under  this 
law  is  to  engage  in  the  coastwise  trade,  the  bill  is  all  right  as  it  reads. 
But  if  it  is  intended  that  that  corporation  shall  not  engage  in  the 
coastwise  trade,  then  I  think  an  amendment  ought  to  be  made  by 
putting  after  the  word  "  corporation  "  the  following :  "  excepting  one 
in  which  the  United  States  is  a  stockholder  or  has  any  interest." 

Otherwise  the  corporation  formed  by  this  act  could  engage  in  the 
coastwise  trade  anywhere  or  any  place.  I  do  not  know  whether  that 
is  the  intention  of  the  bill  or  not.  If  it  is  the  intention  of  the  bill 
that  this  corporation  shall  engage  in  the  coastwise  trade,  why,  then, 
the  bill  is  all  right,  as  it  stands,  but  if  it  is  not  the  intention  that  it 
should  engage  in  the  coastwise  trade,  then,  I  think  that  amendment 
ought  to  be  made. 

Then,  in  section  8,  page  10 : 

That  the  board  hereby  created,  if  in  its  judgment  such  action  is  necessary 
to  carry  out  the  purposes  of  this  act,  may  form,  under  the  laws  of  the  United 
States  or  of  the  District  of  Columbia,  a  corporation  or  corporations,  with 
capital  stock  in  such  amount  as  the  board  may  prescribe,  such  capital  stock, 
however,  to  be  within  the  limits  of  the  appropriations  made  by  this  act,  whose 
object  shall  be  the  purchase,  construction,  equipment,  maintenance,  and  opera- 
tion of  merchant  vessels  in  tlie  commerce  of  the  United  States  and  with  foreign 
countries  and  with  Alaska — 

If  it  is  intended,  as  I  said  before,  that  they  are  going  into  the 
coastwise  trade,  then  that  is  all  right.  But  if  it  is  not  intended  that 
they  shall  go  into  the  coastwise  trade,  then  the  word  "  and,"  after 
"United  States,"  should  be  stricken  out,  so  that  it  should  read:  "In 
the  commerce  of  the  United  States  with  foreign  countries  and  with 
Alaska." 

As  it  now  reads,  it  is  for  the  United  States,  anywhere,  on  the  Great 
Lakes,  or  on  the  rivers,  or  in  our  coastwise  trade.  That  is  broad 
enough  to  permit  this  corporation  that  is  to  be  formed  to  do  business 
anywhere  on  this  continent.  I  do  not  know,  as  I  say,  whether  that 
was  the  purpose  of  the  draftsman  of  the  bill  or  not,  but  if  it  is  in- 
tended that  this  corporation  shall  not  engage  in  the  coastwise  trade, 


568      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

and  shall  be  formed  for  the  purpose  of  trying  to  build  up  our  foreign 
trade,  then  that  word  "  and  "  ought  to  come  out. 

I  think  I  have  said  all  I  have  to  say,  and  I  thank  you  very  much 
for  this  opportunity  for  saying  so  much, 

STATEMENT  OF  MR.  JOHN  A.  PENTON,  OF  CLEVELAND,  OHIO, 
EDITOR  OF  THE  IRON  TRADE  REVIEW,  AND  THE  DAILY  IRON 
TRADE  AND  METAL  MARKET  REPORT. 

Mr.  Penton.  I  want  to  say,  Mr.  Chairman,  that  perhaps  I  am  at 
a  disadvantage,  or  perhaps  at  an  advantage  in  not  having  any  direct 
or  indirect  interest  of  any  kind  whatever  with  anybody  engaged  in 
the  ship-owning,  shipbuilding  or  ship-operating  industry,  and  I 
have  never  had. 

Some  years  ago  I  attended  one  evening  a  little  dinner  function  in 
Cleveland,  where  the  question  of  a  new  merchant  marine  was  under 
consideration,  and  somebody  suggested  an  organization  of  some  sort, 
a  little  sentimental,  patriotic  matter  in  Cleveland,  to  see  if  something 
could  not  be  done  to  carr^-  on  a  little  educational  campaign  in  that 
city  on  that  subject.  Somebody  turned  over  and  on  the  back  of  a 
little  menu  wrote  out  a  set  of  suggested  by-laws,  and  then  officers 
were  suggested.  I  happened  to  be  an  unfortunate  newspaper  man 
and  they  made  me  secretary.  And  I  knew  as  little  about  the  subject 
as  anybody  in  the  world.  A  few  days  after  that  the  newspapers 
carried  the  story  of  an  association  being  formed,  and  the  first  thing 
I  knew  we  woke  up  one  morning  and  found  ourselves  famous.  I 
think  we  had  16  members  at  the  start,  and  we  were  going  to  charge 
$10  a  year  dues.  I  did  not  know  what  we  were  going  to  do  with 
so  much  money  as  $160.  But  we  had  to  have  a  few  letter  heads 
printed  and  a  little  stationery.  We  gradually  began  to  study  the 
question,  and  our  little  association,  which  was  entirely  a  nonpartisan 
patriotic  affair,  grew  in  size  until  it  had  members  in  every  State 
of  the  Union,  and  a  vice  president  in  every  State ;  and,  while  we  did 
not  take  any  part  as  for  or  against  any  specific  character  of  legis- 
lation, w^e  did  finally  indorse  the  ocean  mail  act  of  1891  simply 
because  it  was  recommended  by  two  different  Presidents  of  the 
United  States,  a  number  of  Government  officials,  and  about  100 
business  men's  associations  and  committees  of  both  House  and  Senate. 
But  when  the  campaign  for  free  ships  was  on  and  being  advocated  by 
certain  Senators  and  Congressmen  we  never  raised  our  voice,  feeling 
that  that  method  Avould  accomplish  nothing.  And  when  Congress- 
man Underwood,  and  others  in  the  House,  and  Senator  Newlands,  and 
others  in  the  Senate,  by  speeches  indicated  that  they  were  in  favor  of 
preferential  duties  the  league  officers  felt  that  if  Congressman  Under- 
wood and  Senator  Newlands  said  it  would  accomplish  the  purpose 
they  were  in  a  position  to  know.  So  that  without  having  any  great 
feeling  for  or  against  any  method  we  were  interested  only  in  some- 
thing which  would  do  the  business. 

I  speak  of  that  as  perhaps  giving  a  little  excuse  for  my  being  here. 
This  is  a  subject  in  which  we  have  been  very  much  interestd,  and  our 
little  association  through  speeches  and  debates,  magazine  articles, 
newspaper  articles,  etc.,  has  carried  on  quite  an  effective  educational 
campaign  for  a  good  many  years. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      569 

Later  I  was  a  member  of  the  committee  of  the  Chamber  of  Com- 
merce of  the  United  States  which  prepared  the  report  presented  last 
year.  A  referendum  was  taken  on  that,  with  which  you  are  familiar, 
and  I  think  that  it  is  fairly  representative  of  the  thought  of  the 
people  of  America.  A  referendum  was  taken  of  all  of  the  members 
of  the  Chamber  of  Commerce  of  Cleveland,  a  voting  paper  being 
sent  to  all  of  the  members,  and  a  copy  of  the  result  of  that  I  have  in 
my  pocket,  showing  how  the  individual  members  voted  on  all  of  the 
propositions  submitted  by  the  Chamber  of  Commerce  of  the  United 
States  if  your  committee  would  desire  to  see  it. 

The  Chairman.  We  have  the  method  of  taking  the  vote,  I  believe, 
of  all  the  constituent  bodies  of  the  Chamber  of  Commerce  of  the 
United  States  already  in  the  record,  given  by  Mr.  Fahey,  who  was 
until  recently  president  of  the  Chamber  of  Commerce  of  the  United 
States. 

Mr.  Penton.  Perhaps  that  did  not  give  the  vote  taken  by  ballot 
of  any  individual  chamber.    I  think  most  of  them  voted  by  directors. 

The  Chairman.  He  gave  the  method  of  how  each  vote  was  taken, 
I  understand.  I  have  not  read  his  statement,  but  I  understand  in 
each  case,  where  it  was  taken  by  a  referendum  vote.  He  indicated 
that  and  made  a  very  full  report. 

Mr.  Penton.  I  did  not  know  that.  I  do  not  want  to  take  your 
time,  but  I  have  this  vote  if  you  want  to  see  it.  I  was  here  two  or 
three  weeks  ago,  accidentally,  when  you  had  a  gentleman  before  you, 
and  I  secured  some  ideas  at  that  time,  and  I  asked  you  if  I  might 
not  have  an  opportunitj'^  to  come  before  your  committee.  T|iere  seems 
to  be  quite  a  little  bit  of  oj^position  to  the  word  "  subsidy,"  and  upon 
that  I  wish  to  say  a  few  words,  if  I  may. 

The  Chairman.  We  are  having  hearings  now  on  House  bill  10500. 

Mr.  Penton.  Yes;  I  do  not  think  there  is  any  opposition  to  the 
use  of  the  word  "subsidy"  in  this  country.  I  think  we  had  100 
resolutions  at  one  time,  adopted  by  the  different  chambers  of  com- 
merce and  the  different  business  men's  associations  in  America,  ad- 
vocating what  was  called  a  subsidy  bill;  although,  as  1  understand  it, 
there  has  not  been  a  subsidy  proposition  before  Congress  for  the  last 
15  or  16  years.  The  ocean-mail  act  was  a  measure  authorizing  the 
Postmaster  General,  if  he  saAv  fit,  to  advertise  for  bids  for  vessels  to 
carry  the  mails,  and  to  render  the  (Government  certain  services  there- 
for, such  vessels  to  be  built  in  American  shipyards,  and  officered  by 
Americans,  and  to  be  built  subject  to  Government  regulations  and  in- 
spection. The  bill  passed  the  Senate  unanimously,  as  I  remember. 
It  carried  with  it  a  proviso  that  the  gross  expense  under  that  bill, 
in  any  one  calendar  year,  should  not  exceed  the  net  revenue  derived, 
and,  under  those  circumstances,  the  bill  passed  the  Senate  unani- 
mously and  was  defeated  in  the  House  by  only  three  votes.  Now,  I 
think  we  do  give  many  subsidies — practical  subsidies.  I  think  the 
appropriations  for  the  river  and  harbor  improvements  are  very  much 
a  subsidy,  and  they  are  indorsed  by  the  beneficiaries  from  various 
parts  of  the  country.  And  I  think  that  the  money  appropriated 
for  irrigation  purposes,  the  boll  weevil  in  the  South,  and  matters  of 
that  kind,  are  all  very  desirable  and  proper  subsidies. 

I  am  a  newspaper  publisher,  and  I  want  to  say  that  I  believe  the 
newspaper   fraternity   of   the   United   States   receives   one   of   the 


570      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

greatest  subsidies  in  the  whole  knoAvn  Avorld.  I  saw  by  some  recent 
reports  that  1,100,000,000  pounds  of  mail  was  carried  as  second-class 
mail  matter  at  1  cent  a  pound  last  ^-ear.  I  know  we  sent  out  a  good 
many  thousand  pounds  in  the  mail  ourselves  for  1  cent  a  pound 
postage.  That  is  less  than  the  Government  can  carry  that  mail  for, 
but  we  believe  that  money  is  used  for  a  good  purpose. 

The  Chairman.  I  belieAe  that  last  year  it  cost  the  Government  4 
cents  a  pound. 

Mr.  RoDENBERG.  I  have  seen  it  estimated  at  9.2  cents  a  pound. 

Mr.  Penton.  If  the  cost  is  4  cents  a  pound,  it  would  be  a  subsidy 
of  $33,000,000  if  3'ou  are  correct.  Some  publishers  declare  it  is 
about  2  cents,  and  other  authorities  say  it  is  8  cents,  but  I  am  glad 
to  accept  the  statement  of  the  chairman.  I  am  only  giving  that  as 
an  illustration.  But  what  we  are  trying  to  do,  and  what  we  know 
you  gentlemen  are  trying  to  do,  is  to  accomplish  something  here  in 
a  patriotic  way  in  this  country.  I  am  willing  to  accept  the  statement 
that  the  chairman  makes  that  it  is  perhaps  4  cents.    I  do  not  know. 

The  Chairman.  1  would  not  want  to  say  that  on  my  own  author- 
ity. But  I  think  that  would  be  a  conservative  estimate.  The  com- 
mission appointed  by  Congress,  of  which  Justice  Hughes  of  the 
Supreme  Court  was  chairman,  investigated  the  whole  matter  and 
recommended  an  increase  to  2  cents. 

Mr.  Penton.  Even  that  would  be  $22,000,000  a  year  as  a  subsidy. 
However,  I  only  want  to  mention  this — that  this  is  a  subsidy  in  my 
judgment,  although  I  think  it  is  quite  a  worthy  subsidy;  and  being 
engaged  in  the  newspaper  business  myself,  I  am  foi-  it.  and  every- 
body else  in  the  business  is  in  favor  of  it,  and,  as  I  say  to  you,  I  think 
it  is  quite  a  worthy  subsidy,  and  is  very  largely  passed  on  to  the 
people  who  receive  the  publications.  l)ecause  there  are  scores  of 
magazine  publications  in  this  country,  wholly  worthy  ones,  that 
w^ould  have  to  go  out  of  business  without  that  subsidy.  So  I  do  not 
think  there  is  the  antagonistic  feeling  toward  the  word  "  subsidy  " 
that  some  people  might  think. 

But  I  wish  to  say  in  reference  to  this  particular  bill,  that  a  few 
weeks  ago  I  had  an  opportunity^  of  taking  lunch  one  day  with  the 
[president  of  a  very  large  shipbuilding  company,  I  know  that  you 
w^ill  ask  me  his  name,  but  I  do  not  believe,  without  his  consent,  I 
can  give  it  to  you,  although  I  will  be  glad  to  try  to  get  his  consent 
if  you  so  desire.  You  remember  a  few  weeks  ago  the  newspapers 
had  a  story  about  a  large  corporation  being  formed  to  build  a  ship- 
yard on  the  Delaware  River  which  would  be  the  biggest  in  America, 
and  that  the  promoters  went  before  a  certain  New  York  trust  com- 
pany for  the  purpose  of  arranging  the  financing  of  a  $20,000,000 
corporation  for  that  purpose  and  were  told  that  "  in  view  of  the 
general  unfriendly  feeling  of  the  Government  toward  merchant 
marine  enterprises  or  the  feeling  the  people  have  that  the  Govern- 
ment is  unfriendly  to  private  enterprise  (we  will  put  it  that  way — 
we  won't  sa.y  that  the  Government  is)  we  do  not  feel  that  we  can 
undertake  to  float  your  corporation  or  finance  it  for  you.  If  it  w-as 
a  steel  business  or  an  automobile  business  or  any  other  kind  of 
business,  we  would  finance  it." 

The  result  is  that  to-day  there  is  no  money  whatever  being  spent — 
at  least,  not  very  much,  except  for  necessary  enlargements  by  the 
shipbuilding  concerns  already  in  existence— in  buying  and  building 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      571 

new  shipyards,  in  spite  of  the  fact  that  all  of  the  shipyards  on  the 
Great  Lakes  and  on  salt  water  have  nearly  three  years'  work  ahead. 
They  have  now  contracts  on  hand  with  which  they  won't  catch  up 
until  1918,  with  the  ships  that  they  have  not  contracted  to  build, 
and  it  is  not  possible  for  the  Government,  if  this  bill  were  passed, 
to  place  a  contract  for  a  ship  before  that  time.  And  yet  there  is 
one  hundred  and  fifty-odd  million  appropriation  now  to  enlarge 
the  steel  plants  in  different  parts  of  America,  while  little  or  nothing 
is  being  invested  in  the  shipbuilding  business.  Yet  everybody  knows 
that  just  now  the  shipbuilding  business  is  unusually  profitable.  So 
I  think  there  is  a  feeling  about  the  attitude  of  the  Government  which 
perhaps  this  committee  might  allay.  I  am  not  going  to  state,  as  I 
heard  one  gentleman  say  the  ether  day,  that  it  was  all  on  account 
of  unfair  navigation  laws,  although  that  is  a  familiar  statement 
which  everybody  hears ;  but  one  statement  struck  me  as  showing  one 
particular  unfairness.  Col.  Goethals  said  the  other  day  that  of  two 
ships  exactly  the  same  size,  going  through  the  Panama  Canal,  one 
paid  $500  more  than  the  other;  the  American  ship  paid  $500  more 
than  the  foreign  ship,  its  sister  ship.  That  is  one  of  the  things  we 
hear  about,  and  I  mention  that,  because,  if  it  is  a  fact.  I  am  sure  it 
is  only  a  question  of  coming  here  and  getting  relief. 

T  believe  that  there  are  tens  of  millions  and  hundreds  of  millions 
of  dollars  willing  to  go  into  this  enter]3rise  in  the  United  States  if 
the  people  couldfeel  that  thev  were  going  to  have  any  safe,  certain 
measure  of  security.  And,  if  I  might  l)e  permitted,  ISIr.  Chairman — 
because  I  know  how  patriotically  inclined  you  gentlemen  are  and 
how  anxious  to  aid  you  are,  if  .vou  can— if  you  will  just  give  a  little 
thought  to  the  people  you  really  mean  to  help  I  believe  that,  while 
yon  have  this  Government-ownership  proposition  in  mind,  you  are 
not  trying  to  discourage  the  shipbuilding  plants  and  discourage  the 
individual  from  building  new  shipbuilding  plants,  which  you  intend 
to  aid.  but  think  of  (lovei-nment  ownership  only  because  you  can  see 
no  other  way  out  as  yet;  but  I  believe  a  very  different  idea  is  exist- 
ing in  the  minds  of  the  American  investors. 

The  Chairman.  I  will  say,  as  the  chairman  of  this  committee, 
that  it  has  been  my  desire  for  years  to  do  something  for  our  merchant 
marine,  and  I  haAe  no  other  ambition  now.  I  agree  with  you  in  this 
respect,  that  it  would  be  well  for  all  of  us  to  drop  overboard  some 
of  our  preconceived  notions  about  things  and  approach  this  propo- 
sition without  them  in  mind.  This  bill,  of  course,  is  only  in  a  ten- 
tative form  now,  and  I  hope  when  the  committee  comes  to  consider 
it  they  will  have  in  mind  all  of  the  valuable  suggestions  that  have 
been  made  in  reference  to  the  proposed  legislation,  and,  whether  it 
is  this  exact  bill  or  some  other,  that  we  can  agree  at  least  in  the 
committee  to  give  it  our  united  support;  because  I  think  we  are  all 
promnted  by  the  same  wish,  and  that  is  to  do  something  construc- 
tively for  our  American  merchant  marine. 

Mr.  Penton.  May  I  take  the  liberty,  before  taking  my  seat,  of 
reading  this  little  vote  of  the  Cleveland  Chamber  of  Commerce,  of  its 
members,  on  these  six  questions  submitted  by  the  Chamber  of  Com- 
merce of  the  United  States. 

On  the  question.  Do  you  favoi-  the  (lovernment  undertaking  the 
purchase,  construction,  or  charter  of  vessels  for  mercantile  purposes, 


572      SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

together  with  the  operation  of  such  vessels?  there  were  7  votes  in 
favor  and  466  opposed. 

On  the  question,  Do  you  favor  ownership  of  merchant  vessels  by 
the  Government,  but  with  operation  by  private  parties  under  leases  ? 
the  vote  was  49  in  favor  and  470  opposed. 

On  the  question.  Do  you  favor  subsidies  from  the  Government 
sufficient  to  offset  the  difference  in  cost  between  operation  of  vessels 
under  the  American  flag  and  operation  of  same  in  deep-sea  trades 
under  foreign  flags?  there  were  439  votes  in  favor  and  89  opposed. 

On  the  next  question,  Do  you  favor  subventions  from  the  Govern- 
ment to  establish  regular  mail-and-freight  lines  under  the  American 
flag  to  countries  in  which  the  commercial  interests  of  the  United 
States  are  important  and  to  American  dependencies?  the  vote  was 
495  for  and  34  against. 

That  was  the  vote  taken  on  the  first  ballot. 

On  the  second  ballot,  on  the  recommendation  of  the  committee  of 
the  creation  of  a  Federal  shipping  board  to  investigate  and  report 
to  Congress  regarding  the  navigation  laws  and  to  have  full  jurisdic- 
tion under  the  law  in  all  matters  pertaining  to  over-sea  transporta- 
tion the  vote  was  480  for  and  30  against. 

The  balance  of  the  questions  and  the  balance  of  the  answers  I 
have  here  on  this  little  slip,  but  I  just  thought  I  would  give  you  the 
results  on  those  few. 

The  Chairman.  Suppose  you  state  the  result  on  the  question  of 
regulation,  as  long  as  you  are  on  that  subject. 

Mr.  Penton.  On  the  recommendation  that  the  Government  sub- 
scribe to  the  entire  stock  of  the  Marine  Development  Co.,  etc.,  the 
vote  was  255  for  and  228  against. 

The  Chairman.  On  the  first  proposition,  on  the  question  of  a  Fed- 
eral shipping  board,  can  you  give  the  vote  on  that? 

Mr.  Penton.  Yes.    In  favor,  488;  opposed,  30. 

The  Chairman.  Then  take  the  next  proposition,  the  third  one. 

Mr.  Penton,  On  the  recommendation  of  the  committee  that  the 
ocean  mail  law  of  1891  be  amended  by  lowering  the  speed  for  first- 
class  steamers,  etc.    In  favor,  434;  opposed,  38. 

That  there  should  be  legislation  abolishing  preferred  rebates  and 
providing  for  supervision  of  rates  by  the  Federal  shipping  board, 
with  requirements  for  filing  with  the  board  schedules  of  rates  and 
all  agreements  among  over-sea  lines,  there  were  450  in  favor  and  37 
opposed. 

That  Federal  licenses  should  be  taken  out  by  lines,  etc.,  the  vote 
was — in  favor,  476;  opposed,  20. 

The  Chairman.  Now,  that  makes  the  record  complete. 

Mr.  Loud.  May  I  suggest  that  we  might  get  some  illuminating 
and  instructive  testimony  from  the  gentleman  on  the  rapidity  with 
which  boats  are  built  upon  the  Great  Lakes  in  the  yards  there, 
where  the  boats  are  standardized  more  than  they  are  upon  the  ocean? 

The  Chairman.  Yes;  it  is  a  well-known  fact  that  ships  can  be 
built  on  the  Great  Lakes  cheaper  than  anywhere  in  the  world ;  is  not 
that  a  fact? 

Mr.  Loud.  And  there  they  are  building  boats  of  10,000  tons — he 
might  give  you  some  information  on  that  point. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      573 

Mr.  Pektox.  I  have  often  heard  it  said  that  they  could  build  a 
10,000-ton  ship,  from  the  date  of  laying  the  keel  to  the  date  when  she 
starts  out  under  her  own  steam,  in  10  weeks. 

Mr.  RoDENBERG.  What? 

Mr.  Penton.  In  10  weeks.  It  sounds  incomprehensible.  I  remem- 
ber telling  the  story  down  at  Cramp's  yard,  and  there  was  a  Gov- 
ernment inspector  there,  and  the  Cramp's  people  asked  me  how  they 
accounted  for  it,  and  I  said,  "  They  do  not  have  Government  inspec- 
tion up  there."  The  fact  is,  I  think  it  has  been  done  frequently  in 
10  weeks. 

Mr.  Loud.  These  10,000-ton  boats  are  all  of  the  same  type  and  are 
standardized  so  that  they  are  built  one  just  like  another. 

Mr.  Penton.  They  are  building  boats  (all  of  the  big  steel  com- 
panies) of  the  same  type.  They  put  three  or  four  through  at  one 
time,  and  they  do  not  have  to  stop  to  make  new  patterns,  but  they  send 
them  down  to  the  shop,  and  as  soon  as  they  get  the  material  it  is  only 
a  question  of  assembling. 

Mr.  Saunders.  Where  are  the  yards  that  build  that  expeditiously? 

Mr.  Penton.  The  American  Shipbuilding  Co.,  the  Great  Lakes 
Engineering  Works,  and  the  Toledo  Shipbuilding  Co.  They  do  it 
very  fast. 

The  Chairman.  What  size  vessels  can  now  be  brought  out  of  the 
Lakes? 

Mr.  Penton.  Two  hundred  and  thirty-four  feet,  through  the  Wel- 
land  Canal. 

Mr.  Loud.  Those  that  he  speaks  of  are  the  600-foot  freighters, 
which  are  built  so  quickly. 

Mr.  Penton.  They  are  building  14  boats  now  under  contract  for 
Norway,  Italy,  and  Sweden,  on  the  Great  Lakes,  for  the  foreign 
commerce,  and  they  are  going  ahead  with  the  contract  that  they  have. 
A  gentleman  connected  with  the  American  Shipbuilding  Co.  told  me 
that  they  had  a  proposition  to  build  six  for  Norway  right  now. 
There  is  a  little  idea  that  German  money  is  paying  for  them;  I  do 
not  know  whether  that  is  true  or  not. 

Mr.  Hardy.  Is  it  not  your  opinion  that  the  American  shipyards, 
when  they  get  right  down  to  it,  can  outbuild  the  foreign  shipyards, 
taking  the  lake  building  as  an  example  ? 

Mr.  Penton.  The  president  of  the  Newport  News  Shipbuilding 
Co.  said  that  they  build  a  slightly  different  boat,  but  if  they  could 
get  the  ships  to  build  in  this  country  as  they  build  them  in  foreign 
countries,  although  the  cost  of  labor  here  is  still  more,  if  they  were 
built  in  the  same  quantity,  we  can  come  pretty  near  to  building  them 
as  cheaply  as  they  do  over  there. 

Mr.  Hardy.  They  do  not  cost  any  more  now. 

Mr.  Penton.  No;  but  the  conditions  are  abnormal  now. 

Mr.  Hardy.  They  did  come  close,  and  it  is  much  closer  now. 

Mr.  Penton.  But  the  conditions  are  abnormal  now.  He  was  talk- 
ing of  conditions  about  four  years  ago. 

Mr.  Hardy.  If  the  Government  adopts  this  bill  and  should  offer 
to  public  competition  the  building  of  all  of  the  ships  they  authorized 
under  it.  is  it  not  more  than  reasonable  to  suppose  that  the  United 
States  shipbuilding  yards  would  secure  the  contract  in  open  competi- 
tion to-day? 

32910—16 37 


574      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Pen  TON.  You  can  get  twice  the  price  of  a  ship  under  the 
abnormal  conditions  to-day  if  you  can  make  delivery  at  any  time  in 
1918,  because  the  demand  is  so  acute  and  they  sometimes  make  one- 
half  their  cost  in  one  round  trip. 

Mr.  Hardy.  You  have  not  answered  my  question,  which  possibly 
you  did  not  catch :  Would  not  the  American  shipyards,  in  open  com- 
petition with  the  world  to-day,  build  every  one  of  these  ships  if  the 
Government  w^ere  to  offer  them  to  public  bid  ? 

Mr.  Penton.  Build  them  as  cheap  as  the  foreign  countries  to-day? 

Mr.  Hardy.  Yes. 

Mr.  Penton.  Yes;  you  can  get  the  ships  built  here  to-day  as  cheap 
as  you  can  anywhere  in  the  world,  for  the  government  or  anybody 
else. 

Mr.  PIardy.  And  if  we  should  let  a  contract  at  any  time  in  two 
years,  that  would  be  almost  sure  to  be  the  case,  would  it  not? 

Mr.  Penton.  Yes;  I  imagine  the  war  will  last  for  two  years;  but 
when  it  comes  to  a  period  after  the  war  is  over,  it  will  be  another 
situation. 

Mr.  Hardy.  After  the  war  is  over,  if  the  shipbuilding  industry 
does  anything  to  try  to  get  in  the  field,  won't  they  standardize  the 
types  of  vessels  and  build,  as  you  say,  in  10  weeks? 

Mr.  Penton.  On  salt  water  they  can  not  build  in  10  weeks.  I  have 
been  talking  about  building  ships  on  fresh  water. 

Mr.  Hardy.  A  10,000-ton  vessel  can  be  built  and  transported  to 
the  sea  in  sections,  can  it  not  ? 

Mr.  Penton.  Oh,  no;  that  would  cost  immeasurably. 

Mr.  Hardy.  How^  is  that  ? 

Mr.  Penton.  That  would  add  terribly  to  the  cost.  But  then  the 
salt-w^ater  people  build  pretty  fast  themselves  to-day;  there  is  a 
pretty  good  business  down  there. 

Mr.  Edmonds.  I  think  I  can  answer  your  question,  Mr.  Hardy.  In 
the  hearing  before  the  Committee  on  Naval  Affairs  in  regard  to  this 
b-ill  for  enlarging  the  number  of  steamers  on  the  Panama  steamship 
line,  held  about  two  years  ago  in  September,  it  was  testified,  I  think, 
by  the  president  of  the  Sparrow  Point  Shipbuilding  Co.  that  they 
can  build  just  as  cheap;  and  if  we  ordered  10  ships  from  them  they 
would  build  the  first  ship  in  six  months  and  they  would  follow  at 
the  rate  of  one  every  two  months  afterwards. 

Mr.  Hardy.  I  was  only  drawing  attention  to  one  fact :  The  univer- 
sal claim  as  to  the  reason  why  we  have  not  been  able  to  build  ships  in 
competition  with  the  world,  is  because  of  the  fact  that  we  have  not 
standardized;  and  if  we  start  into  the  business  under  this  bill,  having 
$50,000,000  of  capital  to  invest  at  once,  is  it  not  possible  that  our 
builders  would  standardize  and  equal  the  world  in  the  building  of 
ships  as  they  do  now  in  the  production  of  steel  and  iron? 

Mr.  Penton.  I  think  so ;  yes,  sir.  But  I  would  like  to  make  this 
explanation,  and  I  hope  you  will  appreciate  the  fact  that  I  am  trying 
to  say  something  which  won't  seem  out  of  touch  with  anybody's  feel- 
ing here.  Before  the  war  was  declared  we  were  making  tin  plate 
almost  as  cheap — not  quite,  but  almost  as  cheap — and  we  were  mak- 
ing it  practically  as  a  result  of  the  encouragement  given  to  the  build- 
ing up  of  American  plants.  And  in  the  same  way  the  encouragement 
of  the  building  up  of  these  shipbuilding  plants  now,  I  believe,  would 
result  in  an  affirmative  answer  to  Judge  Hardy's  question. 


11 


SHIPPING  BOAKD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      575 

Mr.  Hardy.  Right  along  that  line,  you  seem  to  be  very  much  de- 
voted to  subsidy. 

Mr.  Penton.  I  am  very  much  in  earnest. 

Mr.  Hardy.  I  would  like  to  ask  how  it  would  look  for  us  to  speak 
out  to  the  American  people  and  say  that  ships  to-day  which  are  re- 
ceiving from  500  to  800  per  cent  higher  rates  on  their  freight  than 
they  ever  did  before,  and  that  frequently  pay  for  themselves  in  two  or 
three  trips— how  would  it  look  to  the  common  American  citizen  to- 
offer  to  pay  that  ship,  in  addition,  a  subsidy  from  the  Government? 

]\Ir.  Penton.  Under  the  present  circumstances  there  is  no  neces- 
sity to  do  it. 

Mr.  Hardy.  You  want  a  law  to  give  a  subsidy?  ..:  . 

Mr.  Penton.  No ;  not  in  the  present  circumstances. 

Mr.  Hardy.  Would  you  not  just  be  ashr.med  to  take  the  money? 

]SIr.  Penton.  I  am  getting  a  subsidy  now  and  I  am  not  ashamed. 

INlr.  Hardy.  I  believe  I  will  withdraw  the  question;  I  never  saw  a 
man  who  was  ashamed  to  take  the  money. 

Mr.  Penton.  May  I  say  the  freight  on  pig  iron  to  Italy  is  costing 
from  $18  to  $20  now  instead  of  $1  to  $2,  and  on  steel  billets  also. 

JSIr.  Hardy.  And  yet  you  want  to  give  that  vessel  a  subsidy? 

Mr.  Penton.  No;  I  am  not  speaking  of  that  vessel  at  all. 

Mr.  Hardy.  For  what  vessel  are  you  speaking? 

INIr.  Penton.  I  am  not  speaking  of  to-day  under  the  war  conditions. 

Mr.  Hardy.  Do  3^011  not  know  that  after  this  war  is  over,  with  the 
scarcity  of  tonnage,  that  every  vessel  on  the  sea  is  going  to  be  the  big- 
gest money-making  thing  you  can  find? 

Mr.  Penton.  Perhaps  that  is  true. 

Mr.  Hardy.  When  do  you  want  your  subsidy  to  begin? 

Mr.  Penton.  I  am  not  here  speaking  for  subsidy. 

Mr.  Curry.  Great  Britain  does  not  subsidize  her  merchant  marine, 
and  there  is  no  intention  now,  either  in  the  past  or  in  the  future,  to 
pay  the  American  merchant  marine  a  subsidy  here. 

INIr.  Penton.  The  cost  of  operation  under  the  foreign  flag  is  so  cheap 
as  compared  with  the  cost  of  operation  under  the  American  flag  that 
that  is  a  great  big  subsidy  in  itself. 

Mr.  Curry.  That  is  not  one  of  the  difficulties  now.  Right  now 
there  is  no  necessity  of  subsidizing  anything 

Mr.  Penton.  No,  indeed. 

Mr.  Curry  (continuing).  And  it  would  be  foolish  to  pass  a  subsidy 
bill  under  the  conditions  at  the  present  time. 

Mr.  Penton.  My  thought  about  a  Government-ownership  bill  is 
that  one  of  its  many  effects  will  be  the  discouraging  of  American 
capital  from  going  into  the  building  of  American  ships. 

Mr.  Curry.  I  think  you  have  made  that  clear. 

INIr.  Penton.  I  wish  to  offer  that  suggestion  with  all  due  deference 
to  everybody. 

ISIr.  Hardy.  I  thought  the  idea  as  that  the  cost  of  operation  has 
driven  us  from  the  sea  and  not  the  difference  in  the  cost  of  the  ves- 
sels. You  are  aware  that  the  Pacific  Mail  used  Chinese  and  Japanese 
crews  ? 

JSIr.  Penton.  I  believe  so ;  yes,  sir. 

Mr.  PIardy.  And  Chinese  and  Japanese  labor? 

Mr.  Penton.  Yes,  sir. 


576     SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Hardy.  And  you  are  aware  that  every  vessel  under  our  flag 
has  a  right  to  get  the  seamen  where  it  pleases. 

Mr.  Pejston.  I  think  myself  that  those  regulations  recently  enacted 
under  the  seamen's  act  are  more  burdensome. 

Mr.  Hardy.  What  are  those  regulations? 

Mr.  Penton.  I  do  not  want  to  go  into  the  details  about  it. 

Mr.  Hardy.  I  want  to  tell  you  that  Mr.  Schwerin  testified  that  of 
the  Chinese  seamen  more  than  40  to  60  per  cent  were  competent  to 
qualify  under  the  seamen's  act. 

Mr.  Penton.  Was  that  recently? 

Mr.  Hardy.  When  we  were  holding  the  hearings  on  the  seamen's 
bill.  He  testified  that  those  Chinamen  had  been  with  him  for  years 
and  knew  the  language  of  the  officers  and  made  the  best  seamen  on  the 
ocean,  and  he  did  not  think  it  would  interfere  with  him. 

JNIr.  Penton.  A  man  makes  a  very  poor  witness,  if  he  undertakes 
to  answer  a  question  on  which  he  is  not  thoroughly  informed. 

Mr.  Hardy.  And  then  the  seamen's  act  was  only  passed  last  year, 
so  that  that  had  nothing  to  do  with  it. 

Mr.  Penton.  So  many  people  have  written  so  much  upon  thai 
subject,  Mr.  Schwerin  among  the  number,  in  which  they  said  it  had 
so  much  to  do  with  it,  that  I  would  not  like  to  hazard  a  statement. 

Mr.  Hardy.  I  want  to  get  clown  to  that  statement  of  the  excessive 
cost  of  the  American  operation.  You  know  that  the  American  owner 
could  employ  any  seaman  he  wanted  prior  to  the  seamen's  act? 

Mr.  Penton.  In  a  publication  called  Nation's  Business,  issued  by 
the  Chamber  of  Commerce  of  the  United  States,  a  copy  of  whi'-h  is 
in  my  pocket  here,  which  I  secured  since  I  came,  so  as  to  refresh  my 
memory,  it  gives  the  cost  of  the  operation  under  the  different  flags 
of  the  clifTerent  countries:  and  the  cost  under  the  American  flag  is 
about  twice  what  it  is  anywhere  else. 

Mr.  Hardy.  I  understand  all  those  publications.  But  why  is  it 
that  the  American  pays  more  for  seamen  when  he  engages  the  men 
just  the  same  as  anybody  else.    Is  not  that  true? 

Mr.  Penton.  Judge,  I  want  to  say  that  I  heard  at  one  time  the 
testimony  given  before  a  joint  commission  of  the  House  and  Senate 
in  New  York.  I  sat  there  for  two  or  three  days  and  heard  people 
come  before  that  commission  and  give  testimony  as  follows:  That 
they  would  have  a  foreign  boat  on  one  side  of  the  pier  at  certain 
times,  and  an  American  boat  belonging  to  the  same  firm  on  the  other 
side,  and  the  sailor  would  leave  the  American  boat  and  cross  the  pier 
to  the  foreign  boat  and  be  willing  to  accept  half  the  Avages  he  got 
from  the  American  ship;  whereas  if  he  would  cross  over  from  the 
foreign  boat  to  the  American  boat,  he  would  insist  on  getting  double 
the  wages  there. 

Mr.  Hardy.  I  ha^e  heard  that  statement,  but  do  you  believe  it? 

Mr.  Penton.  Yes;  I  do. 

Mr.  Hardy.  I  can  not  believe  that  the  ordinary  American,  looking 
for  a  job,  is  going  to  refuse  a  job  on  an  American  ship  here,  under 
the  American  flag,  or  to  leave  a  job  at  $20  a  month  and  go  over  to 
a  Japanese  ship  at  $10  a  month — at  $10  a  month  difference  in  the 
wages. 

Mr.  Penton.  Shortly  after  the  war  started  this  Government 
passed  a  bill  making  it  possible  for  ships  to  be  placed  under  the 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      577 

American  flag,  and  to  be  operated  under  the  American  flag — foreign 
ships — and  it  exempted  a  certain  class  of  officers  in  that  legishition 
so  that  they  could  operate  these  ships  without  taking  the  oath  of 
allegiance  to  this  country,  and  could  operate  those  boats  with  cer- 
tain foreign  seamen  and  officers;  and  the  moment  those  boats  came 
under  the  American  flag  those  men  demanded  very  greatly  increased 
wages. 

The  Chairman.  The  fact  is  this,  I  think,  Mr.  Penton,  that  the 
ship-registry  act  to  which  you  refer,  authorized  the  President  to 
suspend  our  navigation  laws  so  far  as  requiring  the  watch  officers 
on  foreign-built  ships  brought  under  American  registry  to  be  Ameri- 
can citizens. 

Mr.  Penton.  Yes. 

The  CHAiR:\rAN.  And  the  United  Fruit  Co.  and  the  Standard  Oil 
and  the  United  States  Steel  Cos.'  ships  came  in,  and,  as  I  understand, 
as  soon  as  they  did  come  in,  their  officers  demanded  the  regular 
American  standard  of  wages,  and  got  it. 

Mr.  Penton.  That  is  true.  I  was  down  at  the  foreign  trade 
council  meeting  in  New  Orleans  a  few  weeks  ago,  and  Mr.  Farrell 
was  presiding,  and  one  of  the  speakers  spoke  on  the  subject,  and  a 
great  many  citizens  spoke  on  the  subject.  One  speaker  said,  "  Yes, 
and  when  the  war  is  over  you  will  find  that  all  these  ships  will  be 
put  back  under  the  foreign  flag  again,  and  be  operating  them  at 
much  less  than  under  our  American  flag." 

Mr.  Hardy.  I  also  heard  a  gentleman  who  claimed  to  be  posted 
like  yourself  on  this  subject,  make  the  statement  that  a  vessel  oper- 
ated under  the  English  flag  cost  $994  a  month,  and  the  same  vessel 
operated  by  Italians  cost  $500.  Now,  will  you  tell  me  why  the 
Italian  vessel  has  not  driven  the  English  vessel  from  the  commerce 
of  the  seas? 

Mr.  Penton.  I  could  not  tell  you.  It  is  so  easy  to  ask  questions 
sometimes. 

Mr.  Hardy.  You  know  those  facts  are  substantially  true.  If  any 
of  the  statements  we  have  are  correct,  you  know  that  the  English 
wages  are  the  highest  wages  except  ours  of  any  of  the  great  nations. 

Mr.  Penton.  I  do  believe  the  wages  paid  for  operating  an  English 
ship  under  the  American  flag  are  greatly  in  excess  of  what  the}^  are 
under  the  British  flag. 

Mr.  Hardy.  Do  you  not  believe  also  that  if  the  shipowner  has  to 
pay  a  vastly  increased  amount  of  insurance,  repairs,  and  deprecia- 
tion ;  that  is,  especially  if  it  amounts  to  the  whole  wage  cost  in  a  year ; 
that  is  even  a  greater  cost  of  upkeep,  that  he  can  afford  to  compete? 

Mr.  Penton.  I  have  heard  them  say  this  very  often:  That  they 
would  be  very  glad  to  do  this,  to  pay  for  the  ship  and  pay  more  for 
it  under  the  American  flag — for  the  American-built  ship — but  that 
while  it  would  cost  more  over  a  period  of  years  to  absorb  the  extra 
cost,  yet  the  everlasting  overhead  outlay  of  the  extra  cost  of  the 
wages  of  the  men  made  it  impossible.  And  I  want  to  say  further 
that  I  have  read  somewhere,  not  recently,  but  in  the  testimony  given 
before  congressional  committees,  that  while  this  country  can  do 
things  cheaper  because,  for  instance,  it  can  build  locomotives  by  the 
hundreds  which  are  purchased  by  the  score  for  foreign  countries,  yet 
the  answer  is  that  when  they  are  taken  to  the  foreign  countries  they 


578      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

are  operated  by  foreigners  who  are  paid  the  foreign  wage  scale; 
and  if  that  same  locomotive  went  to  a  foreign  country  and  carried 
with  it  American  workmen,  demanding  the  American  wage  rate  in 
that  country,  they  would  never  go. 

Mr.  Hardy.  I  will  not  pursue  the  question,  it  takes  too  long. 

Mr.  Curry.  You  spoke  early  in  this  discussion  about  Col.  Goethal's 
statement  that  it  would  cost  $500  more  for  tolls  for  a  certain  Ameri- 
can ship  going  through  the  Panama  Canal  than  its  sister  British 
ship. 

Mr.  Penton.  Yes. 

Mr.  Curry.  Col.  Goethals,  I  think,  ought  to  know  that  the  laws 
governing  the  measurement  of  American  ships  and  of  British  ships 
are  identical,  and  that  the  reason  for  the  difference  of  cost  is  that 
under  the  rules  of  the  British  Board  of  Trade  everything  that  is 
possible  to  be  measured  out  of  the  net  tonnage  of  the  ship  is  measured 
out. 

Mr.  Penton.  I  understand  that. 

Mr.  Curry.  And  under  the  rules  of  the  Department  of  Commerce 
of  the  United  States,  everything  possible  to  be  measured  in,  is  meas- 
ured in. 

Mr.  Penton.  Yes,  sir. 

Mr.  Curry.  So  that  the  law  is  not  responsible  for  that  condition, 
but  simply  the  policy  of  the  department. 

Mi\  Penton.  But  in  the  meantime  the  shipowner  pays  the  money. 

Mr.  Curry.  In  the  meantime  the  shipowner  should  see  that  the 
department  changes  that  rule.  AVe  had  Mr.  Chamberlain  before 
us  a  few  days  ago,  and  I  asked  him  why  it  Avas  they  could  not  change 
that  rule,  and  he  said  he  was  changing  it. 

Mr.  Penton.  It  shows,  then,  that  Mr.  Chamberlain  is  making 
the  law. 

Mr.  Curry.  No  ;  it  is  a  rule  under  the  law.  He  was  authorized  and 
empowered  to  make  that  rule  under  the  law.  The  British  Board  of 
Trade  is  authorized  and  empowered  to  make  the  same  rule,  or  figure 
it  the  same  way.  Mr.  Chamberlain  could  figure  it  just  the  same  now, 
and  if  he  wants  an  American  merchant  marine — being  at  the  head  of 
this  vessel  department  of  our  Government,  so  far  as  measurement 
is  concerned,  to  meet  the  British  ships  on  an  equality — he  ought  to 
do  that  without  any  pressure  or  influence  or  force  and  measure  our 
ships  according  to  the  British  Board  of  Trade  rules,  which  he  has 
the  authority  to  do. 

Mr.  Pexton.  May  I  thank  you,  Mr.  Chairman,  again,  very  much, 
indeed,  for  this  opportunity. 

The  Chairman.  As  I  understood  ISIr.  Penton,  he  said  he  saw  a 
neAvspaper  report  the  accuracy  of  which  he  would  not  vouch  for, 
referring  to  that  discrepancy. 

Mr.  Penton.  Yes. 

The  Chairman.  So  that  it  may  or  may  not  be  accurate. 

Mr.  Penton.  It  may  or  may  not  be  accurate,  but  I  saw  the  state- 
ment. 

The  Chairman.  We  are  much  obliged  to  you. 
(Whereupon,  at  12  o'clock  noon,  the  hearing  was  adjourned  until 
Tuesday,  February  29, 1916,  at  10.30  o'clock  a.  m.) 


CREATING  A  SHIPPING  BOARD,  A  NAVAL  AUXILIARY,  AND  A 
MERCHANT  MARINE. 


Committee  on  the  Merchant  Marine  and  Fisheries, 

House  of  IIepresentati\t:s, 
Washington,  D.  C,  February  29, 1916. 
The  committee  met  at  10.30  o'clock  a.  m.,  Hon.  Joshua  W.  Alex- 
ander (chairman)  presiding. 

The  Chairman.  We  have  two  or  three  present  this  morning  who 
desire  to  be  heard.  Mr.  Ivy  desires  to  be  heard  very  briefly,  and  also 
a  gentleman  from  Seattle.     Then  we  will  hear  from  Mr.  Baker. 

Mr.  Edmonds.  Mr.  Chairman,  before  we  start,  might  I  ask  to  have 
this  memorial  from  the  Philadelphia  Board  of  Trade  put  into  the 
record  ? 

The  Chairman.  Yes,  without  objection. 

(The  memorial  referred  to  above  is  as  follows:) 

PlirLADELPIIIA    BOAKD    OF    TrADE, 

Pliiladclphlo,  February  2i,  1916. 
To  the  honorable  the  Senate  and  House  of  Representatires  in  Congress  assem- 
bled: 

This  iiiemoriiil  respectfully  represents — 

That  the  Philadelphia  Board  of  Trade,  through  its  committee  on  foreign  and 
coastwise  commerce,  has  ^-arefully  examined  the  provisions  of  H.  R.  hill  10500 
and  feels  ohliged  to  oppose  its  passage,  not  upon  tlie  question  of  its  form  but  on 
the  question  of  intent,  it  being  based  upon  the  fallacy  that  the  operation  of 
economic  tendencies  can  be  shaped  l)y  (iovcrnnieiit  hat  : 

That  the  board  believes  that  the  verdict  of  the  country,  as  shown  by  the  refer- 
endum upon  the  subject  issued  by  the  Chamlier  of  Connnerce  of  the  United 
States,  was  almost  mitminious  against  the  Goverinnent  ownership,  or  what  was 
still  worse,  the  Government  operation  of  a  merchant  marine,  in  which  opinion 
this  board  is  in  perfect  harmony ; 

That  the  provision  giving  to  the  shipping  board  control  over  rates  on  American 
ships  can  not  he  looked  upon  with  favor,  as  such  interference  would  inevitably 
bring  disastrous  results ; 

That  the  provision  regarding  the  licensing  of  foreign  vessels  and  an  attempt 
to  force  regulation  upon  same  would  doubtless  provoke  dangerous  controversies 
with  maritime  nations  who  would  resent  the  impairment  of  any  rights  contrary 
to  treaty  or  custom  ; 

That  the  board  recognizes  in  the  section  of  the  bill  under  consideration  which 
provides  for  the  payment  by  the  United  States  of  a  monthly  sum  to  the  officers 
and  crews  of  American  vessels,  listed  in  the  United  States  Naval  Auxiliai'y 
Reserve,  a  move  in  the  right  direction,  which  meets  with  its  approval ; 

That  the  board,  as  in  the  past,  is  convinced  that  the  reestablishment  of  the 
American  merchant  marine  can  only  be  accomplished  by  carefully  guarded  sub- 
sidies being  granted  by  the  Government  to  offset  the  differences  in  cost  of  oper- 
ation between  American  and  foreign  vessels:  Therefore, 

Your  memorialist,  the  Philadelphia  Board  of  Trade,  earnestly  petitions  your 
honorable  bodies  not  to  favorably  consider  H.  R.  bill  10500,  being  "A  bill  to 
establish  a  United  States  shipping  board  for  the  purpose  of  encouraging,  de- 
veloping, and  creating  a  naval  auxiliary  and  Naval  Reserve  and  a  merchant 
marine  to  meet  the  requirements  of  the  commerce  of  the  United  States  with  its 
Territories  and  possessions,  and  with  foreign  countries,  and  for  other  purposes." 

And  your  memorialist  will  ever  pray. 

[seal.]  Wm.  M.  Coates,  President. 

Attest : 

W.  R.  Tucker,  Secretary. 

579 


680     SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

STATEMENT  OF  MR.  THOMAS  P.  IVY,  OF  NEW  HAMPSHIRE, 
FOREST  ENGINEER. 

The  Chairman.  Give  the  committee  your  business  and  your  place 
of  residence. 

Mr.  Ivy.  Forest  engineer ;  New  Hampshire. 

The  Chairman.  You  are  just  temporarily  in  Washington? 

Mr.  Ivy.  Just  temporarily  in  Washington. 

The  Chairman.  You  wrote  me  a  letter  expressing  a  wish  to  be 
heard  on  this  measure,  and  we  will  be  very  glad  to  hear  from  you. 

Mr.  Ivy.  Mr.  Chairman  and  gentlemen,  I  hope  in  this  statement 
that  I  wish  to  make,  if  I  shall  seem  to  be  attacking  an3^body,  you 
will  get  that  misapprehension  out  of  your  mind,  because  there  is 
nothing  further  from  my  purpose.  I  trust  I  have  the  decency  to 
recognize  that  any  two  men  may  look  at  the  same  state  of  facts  and 
come  to  conclusions  that  are  very  different.  Besides,  I  look  upon 
your  committee  here  as  a  board  of  directors  in  the  interests  of  the 
American  people,  seeking  to  find  out  the  best  means  by  which  we  can 
establish  an  American  merchant  marine  for  the  expansion  of  our 
commerce  and  for  our  protection  in  time  of  danger. 

This  whole  question  of  the  shipping  business  came  across  my  path 
in  this  way.  Before  the  Panama  Canal  was  completed  I  had  been 
thinking  and  making  some  plans,  because  if  it  is  not  the  business  of 
a  forest  engineer  to  know  anything  about  shipping,  it  certainly  is  a 
part  of  his  business  to  know  something  about  timber  lands  and  the 
lumber  business  in  the  United  States — and  I  had  been  thinking 
about  forming  a  company  for  the  purpose  of  bringing  lumber  from 
the  Pacific  coast  through  the  canal  and  distributing  it  from  Atlantic 
ports  into  the  Middle  West  especially.  Therefore  this  question  of 
shipping  had  immediately  to  be  investigated.  There  was  not  any 
question  in  my  mind  that  we  could  compete  with  lumber  on  the 
Atlantic  slope,  because  as  any  lumber  man  here  knows,  speaking 
generally,  the  lumber  on  the  Atlantic  slope  is  of  low  grade  as  com- 
pared with  the  lumber  on  the  Pacific  slope.  But  in  the  investigation 
of  this  matter,  I  found  it  a  very  serious  question,  a  very  serious  prob- 
lem, whether  we  were  going  to  be  able  to  compete  with  European 
demands  for  the  lumber  of  the  Pacific  slope,  and  so  I  thought  I  had 
better  go  to  Europe  and  look  around  over  there  and  see  Avliat  in- 
formation I  could  get  on  the  subject  over  there,  and  I  did.  And 
that  was  just  in  the  year  before  the  commencement  of  the  war. 

I  found  there  a  great  deal  of  interest  in  the  prospective  opening 
of  the  canal.  In  fact,  in  Liverpool,  they  told  me  that  in  anticipation 
of  the  opening  of  the  Panama  Canal  they  Avere  building  new  cotton 
mills  in  Manchester;  in  Germany  I  found  they  were  enlarging  their 
plants  with  an  idea  of  putting  on  a  special  line  of  steamers;  In  Italy 
I  found  the  Italian  Government  had  a  scheme  of  immigration  by 
which  they  proposed  to  have  a  colony  in  California,  as  the  climate 
is  somewhat  adapted  to  the  Italians.  So  that  question  became  a  very 
serious  one  as  to  whether  we  could  compete  with  the  demand  for 
lumber  from  Europe,  especially  when  European  vessels  would  have 
a  cargo  going  and  coming.  I  had  a  lot  of  facts  and  statistics  relating 
to  this  subject  which,  unfortunately,  got  burned  up  when  my  dwell- 
ing was  burned,  so  I  am  just  speaking  now  from  memory  and  giving 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      581 

the  conclusions  that  I  came  to  rather  than  trying  to  give  you  any 
of  those  facts,  which  I  do  not  want  to  give  unless  I  can  give  them 
accurately. 

As  the  law  then  stood,  we  met  with  the  difficulty  that  we  should 
have  to  use  American  ships,  under  American  registry.  All  of  that 
question  has  been  gone  through  here  with  you — the  difference  in  cost 
and  the  difference  in  operation  between  American  and  foreign-built 
ships.  It  was  an  extremely  doubtful  proposition  in  my  mind  after 
I  had  investigated  the  conditions  in  Europe  whether  we  could  do 
that  thing  successfully  or  not.  But  now  immediately  the  war  broke 
out,  and  that  for  the  moment  set  aside  the  whole  thing.  But  the 
general  conclusion  that  I  came  to  in  my  investigation  of  that  whole 
subject  was  that  the  difficulties  to  be  met  were  so  great  and  so  many 
that  they  could  not  be  overcome  at  this  day  and  time  unless  the  strong 
arm  of  the  United  States  (iovernment  would  get  behind  that  propo- 
sition in  some  way.  And  I  am  free  to  say  tha^  the  principles  in  this 
bill  appeal  more  to  me  as  a  means  of  meeting  those  difficulties  than 
direct  subsidies. 

Of  course,  you  all  know  the  history  of  subsidies  under  our  form  of 
Government;  I  think  it  is  extremel}'  difficult  to  make  an  equitable 
distribution  of  a  subsidy.  I  do  not  see  how  it  can.be  done.  In  the 
next  place,  a  subsidy  is  inflexible;  you  have  to  contract  for  a  number 
of  years  with  the  steamship  company.  Suppose  now  that  you  had 
had  a  contract  heretofore  with  a  company  running  to  South  America, 
and  there  comes  up  this  war  and  Ave  want  most  of  our  business  with 
Europe.  How  are  you  going  to  get  around  that?  And,  as  a  third 
objection  to  it,  it  is  unstable ;  that  is,  with  a  government  by  parties, 
one  party  gives  a  subsidy  and  the  next  party  comes  in  and  takes  it 
away.  That  has  been  the  history  of  this  country,  which  everybody 
knows,  and  it  is  liable  to  be  the  history  again.  Another  objection  to 
a  subsidy  is  that  it  is  inefficient;  it  won't  accomplish  the  thing  to 
be  done. 

Now  I  believe  in  the  principles  of  this  bill  because  its  aim  is  to 
help  business — the  shipper  instead  of  the  shipowner.  Now,  what  do 
we  mean  by  business?  I  believe  business,  primarily  and  funda- 
mentally considered,  is  the  production  of  the  commodities  necessary 
for  the  maintenance  of  the  human  race.  On  the  other  hand,  trans- 
portation is  a  mere  facility  of  business.  For  instance,  take  the  great 
city  of  New  York;  take  Broadway:  Would  anyone  urge  that  Broad- 
way ought  to  be  let  out  to  a  private  corporation  to  run  instead  of 
being  run  by  the  city  of  New  York?  They  would  not  argue  it  for  a 
moment.  Broadway  is  a  facilit}^  of  business,  and  for  that  reason 
provided  free  to  business  by  the  cit3^  And  up  in  our  State,  a  few 
years  ago,  we  voted  to  tax  ourselves  a  million  dollars  to  build  two 
trunk  lines  of  dirt  road,  one  running  up  on  the  Avest  side  around 
through  the  White  jSIountains,  and  one  down  on  the  east  side.  Why 
did  we  do  that?  We  did  it  because  we  considered  transportatin  a 
facility  of  business  and  we  believed  it  would  be  a  good  investment, 
and  it  has  proved  a  good  investment. 

Now  what  does  a  ship  do?  A  ship  simply  provides  dry  transporta- 
tion from  one  port  to  another.  Suppose  we  had  enough  ships  jammed 
together  to  make  a  bridge  over  the  ocean,  or  suppose  it  were  possible 
to  build  a  pontoon  bridge  over  the  ocean,  and  suppose  England  had 
a  bridge  from  Southampton  to  New  York  and  Germany  had  one 


582      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

from  Bremen  to  South  America,  and  suppose,  further,  that  our  busi- 
ness men  of  this  country — the  man  who  grows  wheat,  the  man  who 
grows  cotton,  the  man  who  manufactures  pig  iron,  and  the  man  who 
makes  cloth — suppose  they  all  came  to  you  and  told  you  conditions 
were  such  they  could  not  get  their  goods  over  those  roads,  those  pon- 
toon bridges,  in  competition  with  England  and  Germany,  and  the 
question  was  up  as  to  the  Avay  to  do,  and  we  decided  to  build  bridges 
of  our  own,  would  you  say  a  private  corporation  should  build  that 
system  of  pontoon  bridges  and  control  it  rather  than  that  the  Gov- 
ernment shuld  build  and  control  it?  We  did  not  do  so  when  we 
built  the  Panama  Canal.  You  would  say  the  Government  ought  to 
do  it  simply  because  on  the  ocean  we  meet  the  competition  of  foreign 
countries  and  we  do  not  on  land. 

Mr.  Chairman,  you  said  I  should  be  brief,  and  those  are,  briefly, 
my  remarks.  If  anybody  wishes  to  ask  me  a  question,  of  course,  I 
am  perfectly  willing  to  answer;  but  I  want  it  distinctly  understood 
that  I  have  none  of  the  ambitions  of  a  certain  Irishman  who  was 
found  standing  undressed,  with  his  eyes  tightly  closed,  before  a 
mirror,  and  he  was  asked  what  he  was  doing,  and  he  said  he  was 
standing  there  because  he  wanted  to  see  how  he  would  look  after  he 
was  dead.    [Laugliter.] 

Mr.  Edmonds.  Mr.  Chiirman,  I  want  to  ask  the  gentleman  to  ex- 
plain a  little  further  why  he  said  subsidies  wevQ  inflexible;  what 
his  reason  is  for  saying  that  subsidies  are  inflexible.  I  think  we 
might  as  well  have  that  explained  a  little  more  fully. 

]\Ir.  Ivy.  Yes.  Because  you  can  not  apply  it  directly  to  the  busi- 
ness to  which  you  wish  to  apply  it. 

Mr.  Edmoxds.  That  is  just  what  they  do  with  a  subsidy;  if  you 
wanted  to  start  a  steamship  line  to  Brazil,  you  would  give  a  subsidy 
to  that  line  to  Brazil,  and  therefore  you  would  be  giving  it  to  the 
line  you  wanted  to  reach. 

Mr.  Ivy.  Yes;  but  suppose  you  had  a  port  over  here  Avith  which 
you  were  not  doing  nuich  business,  yet  the  possibilities  are  such  that 
you  wanted  to  develop  business  between  that  port  and  the  United 
States;  do  you  think  a  private  owner  is  going  there  if  it  is  going  to 
cost  a  great  deal? 

Mr.  Edmonds.  If  you  pay  him  a  subsidy  for  hiui  to  run  to  that 
port,  he  will. 

Mr.  Ivy.  Yes;  he  is  going  there  if  you  pay  him  enough,  but  it 
is  so  inelastic. 

Mr.  Edimonds.  You  can  make  it  as  elastic  as  you  please;  it  just 
depends  on  the  contract  that  you  draw  with  the  company. 

jMr.  Ivy.  I  do  not  believe  a  company  is  going  to  make  a  contract 
with  you  to  ])ay  them  a  certain  amount  to  go  into  a  certain  port 
and  then  change  and  go  to  another  port  Avhich  will  cost  a  great  deal 
more. 

Mr.  Ed:>ionds.  You  mean,  then,  this  bill,  which  is  an  indirect  way 
of  paying  a  subsidy,  it  is  a  better  Avay  than  paying  a  direct  subsidy? 

Mr!  Ivy.  Yes;  I  do;  I  think  it  is.  But  I  am  not  afraid  of  the 
word  "  subsidy,"  if  it  would  do  the  work;  I  do  not  object  to  the  word, 
but  the  policy  is  bad. 

Mr.  Edmonds,  How  about  the  suggestion  made  by  the  New  York 
parties  that  we  would  equalize  the  difference  in  cost  of  running 
.steamers  between  other  countries  and  this? 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      583 

Mr.  Ivy.  What  is  that  but  a  subsidy  ? 

]\fr.  En.MONDS.  Well,  what  is  this  bill  but  a  subsidy? 

Mr.  Ivy.  This  bill  provides  a  relief  to  the  shipper;  a  subsidy  is 
a  bonus  to  the  shipowner. 

Mr.  Edmonds.  Very  well,  but  you  are  disguising  it  in  this  bill. 

Mr.  Loud.  This  is  a  sugar-coated  pill,  that  is  all. 

Mr.  Ed:monds.  You  say  what  is  the  use  of  disguising  it;  wiiat  is 
the  difference  between  disguising  it  in  one  way  and  in  another;  it 
does  not  make  any  difference,  does  it? 

Mr.  Ivy.  Yes;  there  is  a  difference.  I  think  this  is  the  most 
effective  Ava.y. 

]\fr.  Saunders.  You  just  regard  this  as  a  more  effective  subsidy 
than  the  other? 

i\Ir.  Ivy.  Yes;  if  you  want  to  state  it  that  way.  That  is  a  more 
effective  aid  to  the  shipper. 

INfr.  ED^roNDS.  Now,  you  stated  that  a  subsidy  was  not  elastic.  A 
subsidy  can  he  made  just  as  elastic  as  you  please,  in  the  contract. 

Mr.  Ivy.  That  is  true. 

Mr.  ED^ro^■DS.  As  a  matter  of  fact,  you  can  make  an  agreement 
with  the  man  to  whom  you  pay  the  subsidy,  running  a  line  of 
steamers,  that  his  books  should  be  oj^en  to  the  Government  and  that 
the  amount  could  be  reduced  from  time  to  time  if  he  was  making 
a  profit  with  his  company.     Is  not  that  true? 

]\rr.  Ivy.  You  might  ]xissibly  find  somebody  who  would  do  that. 

INIr.  Edmonds.  I  do  not  think  there  would  be  any  difficulty  to  find 
somebody  to  do  it.  I  moan  a  man  who  would  do  that  kind  of  thing 
if  his  company  was  subsidized,  say.  for  $25,000  provided  he  would 
run  a  line  and  after  he  began  to  make  money  on  that  line  would  be 
perfectly  willing  to  withdraw  or  reduce  the  subsidy — of  course,  in 
order  to  get  the  subsidy  in  the  first  place. 

Mr.  Ivy.  Yes;  but  then  the  Government  would  have  to  manage 
all  of  those  things,  and  who  is  going  to  manage  all  of  those  changes; 
what  machinery  of  the  Government  have  you  to  do  it? 

Mr.  Edmonds.  We  can  have  a  shipping  board  on  that  end  of  the 
line.  Everybody  agrees  as  to  that:  I  do  not  think  there  is  any  ques- 
tion about  that.  The  shipping  board  is  given  instructions,  but  how 
are  you  going  to  have  elasticity  in  the  operations  conducted  by  the 
shipping  board;  that  is  the  question.  You  believe  in  Government 
ownershi]:)  of  the  transportation? 

^Fr.  Ivy.  On  the  water. 

Mr.  Edmonds.  Not  by  rail? 

Mr.  Ivy.  No,  sir :  but  on  the  water  where  we  have  to  compete  with 
foreign  Governments. 

ISfr.  Saunders.  You  suggested  there  would  be  no  steamship  line 
going  to  ports  where  it  would  not  be  profitable  to  go ;  would  not  that 
be  determined  by  the  amount  of  subsidy,  that  the  steamship  line 
would  go  anywhere  where  it  paid  them  to  go? 

Mr.  Ivy.  Yes ;  I  had  in  mind  myself  that  you  can  direct,  you  can 
turn  to  this  board,  the  Government  can  turn  to  this  board;  and  sup- 
pose you  have  an  order  for  Valparaiso  and  you  want  to  send  10.000 
tons  of  steel  rails  and  there  is  no  ship;  you  can  look  after  that,  you 
have  your  own  line  without  a  royalt3^ 

Mr.  Saunders.  I  say  all  those  arguments  for  a  subsidy  are  very 
acute,  and  I  know  all  the  arguments  made  against  and  every  argu- 


584      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

merit  advanced  in  its  defense.  But  I  want  to  take  those  South 
American  ports,  which  are  generally  taken  as  the  subject  of  illus- 
tration, where  it  would  not  be  possible  for  private  capital  to  run 
lines  under  the  present  conditions,  but  by  the  use  of  a  subsidy  you 
can  make  it  possible  to  go  to  those  ports.  Why  does  that  not  meet  the 
very  situation  you  presented? 

Mr.  Ivy.  Suppose  it  did.  I  simply  say  this  is  a  more  direct  method 
of  meeting  that  question,  and  a  better  one. 

Mr.  Saunders.  But  that  other  does  not  fail  to  meet  it.  It  is  not 
that  it  lacks  the  flexibility  you  speak  of,  if  you  pay  for  what  you 
get ;  subsidy  does  not  lack  of  flexibility. 

Mr.  Ivy.  I  certainly  can  not  agree  with  you. 

Mr.  Saunders.  Woidd  it  not  provide  the  service  in  the  ports  at 
which  you  desired  to  touch? 

Mr.  Ivy.  Yes;  but  you  fix  it  to  those  ports  for  a  definite  number 
of  years. 

Mr.  Saunders.  Would  it  establish  any  lines?  You  do  hot  contem- 
plate the  Government  is  going  there  and  going  to  leave  out  ports  on 
those  lines?  For  instance,  if  a  line  running  to  ports  in  South 
America,  because  some  particular  man  has  a  lot  of  freight  that  he 
wants  to  send  to  some  port,  we  will  say,  in  Peru.  It  would  not  take 
a  vessel  off  of  that  line  and  to  load  it  up  with  that  particular  cargo 
and  send  it  to  Peru.    Is  that  a  part  of  what  you  have  in  mind  ? 

Mr.  Ivy.  I  certainly  do  think  it  would  be  a  part  of  Avhat  I  have  in 
mind,  if  there  were  a  possibility  of  building  up  a  permanent  business 
to  Peru. 

Mr.  Saunders.  You  have  in  mind  some  permanent  service  there: 
you  are  not  sailing  with  a  tramp  ship,  and  3'^ou  would  not  turn  to 
Peru  and  take  a  ship  off  of  a  local  line  to  a  port  already  served.  You 
do  not  contemplate  that  would  be  good  business? 

Mr.  Ivy.  I  am  certainly  not  going  to  desert  one  business  for  the 
sake  of  building  up  another ;  but  if  we  feel  there  is  a  business  look- 
ing for  us  we  should  get  more  ships. 

Mr.  Saunders.  Very  well;  but  could  not  that  all  be  arranged  for 
a  company,  with  a  subsidy,  to  put  a  few  prospective  ships  on  this 
line? 

Mr.  Ivy.  I  say  it  could  not  be  as  expeditiously  and  effectively  done 
as  it  would  where  you  have  one  central  board  here  looking  after  the 
whole  matter  and  controlling  the  ships  themselves,  and  not  somebody 
else  controlling  the  ships. 

Mr.  Edmonds.  Let  me  ask  you  a  question  right  at  that  point.  The 
Government  owns  a  freight  ship  and  it  gets  a  cargo  for  Brazil,  we 
will  say,  and  in  running  on  that  voyage  it  has  competition  for  the 
freights  and  makes  a  loss  of  $5,000.  Wewill  assume  a  cargo  of 
grain  or  wheat  or  something  else,  whatever  it  may  happen  to  be,  and 
it  makes  a  loss  of  $5,000.  The  taxpayers  of  this  country  pay  that 
$5,000,  do  they  not? 

Mr.  Ivy.  Yes. 

Mr.  Edmonds.  For  the  benefit  of  Avhom? 

Mr.  Ivy.  For  the  benefit  of  the  business  men  in  this  country. 

Mr.  Edmonds.  For  the  benefit  of  the  business  men  of  the  country? 

Mr.  Ivy.  Yes,  sir. 

Mr.  Edmonds.  In  other  words,  for  the  benefit  of  the  individual 
man  who  makes  that  shipment? 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      585 

Mr.  Ivy.  And  the  rest  of  the  people  who  have  allied  industries 
connected  with  those  people.  It  spreads  out;  it  goes  out.  They  are 
the  more  direct  beneficiaries,  but  the  entire  business  of  the  United 
States  spreads  out  and  benefits  a  great  many  people  who  are  not 
connected  with  it  directly. 

Mr.  Saunders.  That  is  what  the  high-tariff  people  used  to  argue. 

Mr.  Ivy.  We  won't  get  off  on  the  tariff. 

Mr.  Saunders.  But  you  are  presenting  a  protective-tariff  propo- 
sition. 

The  Chairman.  Yes;  nobody  ever  contended  a  tariff  was  a  direct 
benefit  to  the  farmers,  but  the  argument  was  that  it  established  in- 
dustries and  created  a  cargo  and  a  larger  demand  for  the  farm 
products.  So  I  would  not  think  any  protectionist  would  object  to 
any  argument  along  that  line. 

Mr.  Edmonds.  I  wanted  to  bring  that  out,  because  I  notice  that 
the  Democratic  Party  while  reducing  the  tariff  are  now  trying  to 
put  a  tariff  on  ships  for  the  protection  of  the  business  man.  I  do 
not  know  whether  it  works  out  just  in  that  way  or  not,  but  it  is 
something  along  that  line. 

Mr.  Ivy.  No  ;  there  is  no  protection  on  ships,  but  we  are  undertak- 
ing to  benefit  a  facility  of  commerce. 

Mr.  Byrnes.  You  are  trying  to  subsidize  the  commerce  of  the 
country  instead  of  the  steamships  of  the  country? 

INIr.  Ivy.  There  is  a  very  great  difference,  and  that  is  where  the 
point  of  attack  comes.  There  is  no  trouble  to  get  patriotic  American 
citizens  who  would  absorb  every  dollar  the  Government  would  ap- 
propriate in  the  way  of  profits  to  them  for  operating  ships.  Let  us 
not  get  off  on  the  tariff  question.  I  think  we  are  all  sincere  in  our 
efforts  to  do  something  to  create  better  facilities  for  the  extension 
of  our  commerce. 

Mr.  Rodexberg.  That  will  be  troublesome  enough  this  fall. 

Mr.  Hardy.  I  would  like  to  ask  a  few-  questions  along  the  line  of 
subsidy.  The  gentleman  testifying  says  this  would  be  a  subsidy, 
which  is  a  very  different  idea  from  my  idea  of  what  a  subsidy  is. 
My  idea  of  the  definition  of  a  subsidy  is  that  it  is  a  bonus  given  to 
a  private  individual  to  enable  him  to  conduct  a  certain  business 
with  profit  to  himself.  I  do  not  understand  that  a  public  road 
built  by  the  Government  for  the  benefit  of  a  community  is  a  subsidy 
to  the  wagon  driver  who  uses  that  road.    Do  you  so  understand  it? 

Mr.  Ivy.  Referring  to  that  definition  of  subsidy,  the  purpose  of  the 
subsidy  is  to  benefit  the  shipowner.  This  bill  is  designed  to  benefit  the 
shipper. 

Mr.  Hardy.  That  is  the  purpose  of  the  protectionist,  but  in  prac- 
tice it  is  found  when  you  give  a  subsidy  to  a  private  individual  that 
it  does  not  prevent  him  from  fixing  burdensome  rates  whenever  he 
sees  proper. 

Mr.  Ivy.  I  agree  with  you  entirely  on  that  point. 

Mr.  Hardy.  Do  you  not  think  there  is  a  growing  fundamental 
business  of  the  people  to  provide  for  public  conveniences  for  the  use 
of  the  public  and  not  to  give  a  certain  individual  or  corporation  a 
special  bonus? 

Mr.  Ivy.  Certainly. 

Mr.  Hardy.  In  purpose  and  in  effect  ? 

Mr.  Ivy.  Yes. 


586     SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Hardy.  Now,  then,  if  this  is  a  subsidy,  will  you  briefly  try 
to  give  some  reason  why  every  advocate  of  a  real  subsidy  is  opposed 
to  it? 

Mr.  Ivy.  Why  the  advocate  of  a  real  subsidy  is  opposed  to  it  ? 
Mr.  Hardy.  Every  man  I  ever  saw  who  advocates  real  subsidy 
bitterly  opposes  this  bill,  and  yet  they  claim  this  is  a  subsidy. 
Mr.  Ivy.  You  have  heard  their  arguments,  have  you  not? 
Mr.  Hardy.  I  think  their  arguments  have  been  right  across  each 
other.    One  says  this  is  a  subsidy  and  we  are  in  favor  of  a  subsidy, 
and  the  other  says  this  is  a  subsidy  but  we  are  opposed  to  it. 
Mr.  Edmonds.  I  think  I  can  answer  it. 

Mr.  Hardy.  Wait  one  minute.  All  of  us  will  get  a  chance  to 
answer  it  when  it  comes  to  the  argument. 

The  Chairman.  Let  us  get  the  view  of  this  witness,  and  then  we 
can  get  our  fingers  into  it  later. 

Mr.  Hardy.  Then  I  want  to  Imow  another  thing;  if  the  Govern- 
ment, instead  of  owning  the  Panama  Steamship  Line  had  let  that 
to  a  private  individual,  with  the  understanding  "we  will  subsidize 
you,"  do  3'ou  think  it  would  have  been  true,  as  it  is  true,  that  that 
is  the  only  line  in  America  that  has  not  raised  its  freight  rates  from 
400  to  1,000  per  cent  during  this  war? 
Mr.  Ivy.  No,  I  do  not. 

Mr.  Hardy.  That  testimony  was  giveji  here  by  a  witness  who  has 
no  interest  in  this  bill,  that  that  is  the  only  line  he  found  where  the 
rates  were  still  the  same. 
Mr.  Ivy.  Yes. 

Mr.  Hardy.  Another  thing.  The  American-Hawaiian  Line,  as  I 
understand,  from  such  representatiA'es  who  have  spoken  for  it  here, 
seem  to  be  apparently  very  antagonistic  to  this  line.  If  we  had  a 
line  like  the  Panama  Steamship  Line  to  Hawaii  is  it  not  only  pos- 
sible, but  absolutely  true,  that  freight  rates  there  would  have  re- 
mained somewhat  reasonable  from  America — if  there  had  been  a 
Government  line  such  as  is  contemplated  by  this  bill  ? 

Mr.  Ivy.  I  think  that  would  have  been  the  effect  of  it,  sir. 
Mr.  Hardy.  Is  it  not  true  that  a  line  established  under  this  bill 
here   and  under  the  control  of  the  Government  board  will  be   a 
stabilizer  of  rates? 

Mr.  Ivy.  That  is  my  contention  about  it. 

Mr.  Hardy.  And  is  not  that  one  of  the  great  functions  so  essen- 
tially needed  by  our  people  here  to  keep  down  the  amount  of  the 
rates  that  are  robbing  the  people  unnecessarily? 

Mr.  Ivy.  Absolutely.  And  the  business  man  wants  to  know  as 
a  certainty  what  he  can  depend  on. 

Mr.  Hardy.  Has  any  opponent  of  subsidy  ever  opposed,  so  far 
as  you  know,  the  Government  going  on  to  provide  the  necessary 
public  conveniences  for  the  general  public  use,  such  as  deepening  our 
harbors  and  digging  the  canal — have  any  advocates  of  subsidy  ever 
opposed  those  things? 

Mr.  Ivy.  You  will  have  to  address  that  remark  to  them,  sir. 
Mr.  Hardy.  It  was  a  contention  sharply  maintained  when  we  tried 
to  establish  the  Interstate  Commerce  Commission  that  when  the 
Government  dictated  the  rates  that  was  not  far  from  taking  over 
the  property.  In  principle  it  was  contended  that  to  fix  the  rates 
of  a  transportation  company  was  to  confiscate  and  to  take  charge  of 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      587 

their  property.  Now,  that  is  all  agreed  to,  that  the  Government 
should  do  it. "  And  if  the  Government  has  to  support  the  losses  of 
a  private  institution,  is  it  not  in  all  reason  better  for  the  Govern- 
ment to  take  the  private  institution  and  get  the  profits,  if  there  are 
any?  Is  it  not  a  one-sided  thing  to  ask  the  Government  to  stand 
all  of  the  losses,  but  not  to  get  any  profits  ? 

Mr.  Ivy.  Yes:  it  is. 

Mr.  Hardy.  Is  not  the  subsidist's  idea  that  the  Government  must 
stand  for  all  the  loss? 

JNIr.  Ivy.  Yes. 

Mr.  Hardy.  And  have  no  opportunity  to  get  a  profit  ? 

Mr.  Ivy.  Yes. 

Mr.  Hardy.  That  is  another  distinction  between  this  and  a  sub- 
sidy. Then  I  want  to  ask  another  question:  With  the  rates  soaring 
now  from  400  to  1.000  per  cent  over  normal,  what  man  would  have 
the  cheek  to  ask  this  (Government  to  supplement  those  high  rates 
with  a  subsidy  to  an  individual?  Do  you  think  anybody  would  come 
before  this  committee  and  Congress  and  ask  for  a  subsidy  now.  when 
a  ship  pays  for  itself  in  two  vovages,  frequently? 

Mr.  Ivy.  I  should  not  think  he  could  do  it  with  a  straight  face. 

Mr.  Hardy.  With  those  things  patent  to  us.  a  man  advocating  a 
subsidv  is  flying  in  the  face  of  the  evidence  under  existing  business 
conditions,  and  which  we  see  are  likely  to  be  existing  for  two  or 
three  yoai'S  after  this  war. 

ISIr.  Ivy.  That  is  my  opinion  of  it,  sir. 

Mr.  Hardy.  Will  not  tonnage,  in  your  opinion,  be  scarcer  during 
this  wfa-  and  after  this  war  for  a  long  time? 

ISIr.  Ivy.  I  think  if  this  submarine  war  continues  it  will. 

Mr.  Hardy.  Won't  it  continue  to  be  very  scarce  to  us  with  the  other 
Governments  forbidding  their  ships  to  take  any  other  registry  than 
their  own? 

Mr.  Ivy.  Yes,  sir. 

Mr.  Saunders.  The  question  of  Judge  Hardy  suggests  to  me  one 
or  two  questions.  If  this  war  continues  and  tonnage  gets  scarcer 
and  profits  continue  very  high,  all  the  conditions  will  be  created 
under  which  private  capital  without  Government  ownership  or  any- 
thing else  will  seek  this  field,  will  it  not? 

Mr.  Ivy.  Well,  we  have  been  a  long  time  waiting  for  it. 

Mr.  Saunders.  I  understand:  but  heretofore  they  never  have  had 
these  great  opportunities  of  profit  they  have  now;  and  having  in 
mind  the  conditions  that  he  has  suggested  in  some  of  his  questions, 
and  if  they  are  to  continue,  as  you  say,  the  destruction  of  tonnage  by 
submarines,  when  the  war  is  over  we  will  have  only  a  limited  amount 
of  tonnage  in  the  world  and  an  opportunity  for  very  great  profit 
and  an  opportunity  of  diversification  for  private  capital  to  go  into 
the  world  trade.  Won't  that  present  a  condition  under  which  pri- 
vate capital  will  have  an  attractive  and  inviting  field,  which  it  will 
enter  without  Government  help,  subsidy,  or  anything  else? 

Mr.  Ivy.  It  would  if  private  capital  in  this  country  were  free; 
but  private  capital  is  so  tied  up — you  can  ask  any  man  who  has  gone 
about  it  for  the  purpose  of  starting  a  steamship  line  if  capital  is  not 
all  tied  up  in  certain  directions — and  if  there  is  a  suspicion  the  line 
that  is  going  to  be  built  will  compete  with  some  other  line  they  will 
say  good-by  quickly. 


588      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

The  Chairman.  I  think  you  have  hit  the  nail  on  the  head  there. 

Mr.  Saunders.  Let  me  see  if  I  understand  that  proposition.  You 
tell  this  committee,  in  this  condition  we  have  been  talking  about,  of 
the  continuance  of  those  opportunities,  existing  prices,  which  I 
gather  from  the  newspapers,  that  capital  is  taking  advantage  of  all 
over  the  country  to-day,  and  I  see  that  the  private  yards  are  being 
choked  by  orders  for  new  vessels — you  tell  us  that  we  have  not  got 
in  this  countrj?^  capital  that  will  take  advantage  of  such  opportuni- 
ties as  that;  and  if  they  will  take  advantage  of  it  now,  why  won't 
they  take  advantage  of  it  when  the  war  is  over? 

Mr.  Ivy.  It  has  been  the  experience  of  men  who  have  tried  to  go 
out  for  this  purpose,  and  they  have  found  that  to  be  the  case. 

Mr.  Saunders.  Why  is  it,  just  at  this  particular  time,  they  are 
going  into  it  ?  Because  we  have  had  witnesses  before  the  committee 
tell  about  the  building  of  ship  after  ship,  going  into  these  yards,  to 
go  into  the  deep-sea  trade? 

Mr.  Ivy.  Yes.  Of  course,  the  primary  reason  is  because  of  the 
abnormal  profits  in  shipping  now.  You  have  no  guaranty  that 
those  profits  are  going  to  continue. 

Mr.  Saunders.  Very  well;  you  are  eliminating  a  bright  future, 
which  is  a  matter  of  conclusion.  Then,  if  you  eliminate  from  the 
future  those  enormous  profits  we  are  speaking  of  now,  then  we  must 
legislate  with  respect  to  those  conditions  at  the  present  time. 

Mr.  Ivy.  We  want  to  legislate  only  for  normal  conditions. 

Mr.  Saunders.  Very  well;  we  will  get  back  to  normal  conditions, 
leaving  out  at  this  time  the  great  profits.  It  would  be  robbery,  or 
worse  than  robbery,  for  anybody  to  expect  a  subsidy  while  we  are 
getting  back  to  normal  conditions;  and  under  the  normal  conditions 
which  you  have  in  mind  with  respect  to  the  future  business,  will  you 
tell  me  where  there  is  anything  here  in  this  bill  of  profits  for  the 
Government,  as  suggested  by  one  of  the  questions  of  my  friend, 
Judge  Hardy,  under  the  very  idea  that  we  are  going  to  operate  a 
line  in  quarters  where  it  is  not  profitable  for  private  capital  to  oper- 
ate, and  when  the  Government  begins  to  find  it  profitable  the  Gov- 
ernment is  going  to  withdraw? 

Mr.  Ivy.  State  your  question  again. 

Mr.  Saunders.  I  say.  has  it  not  been  suggested  in  connection  with 
this  whole  project — in  fact,  it  was  suggested  in  the  message  of  Presi- 
dent Wilson — that  we  operate  those  lines  to  quarters  where  they  are 
not  profitable  for  private  capital  to  operate  them? 

Mr.  Ivy.  Yes. 

Mr.  Saunders.  And  when  the  operation  became  profitable  that  the 
Government  was  to  withdraw  and  turn  over  the  lines  to  private 
capital  ? 

Mr.  Ivy.  You  say  that  was  the  suggestion? 

Mr.  Saunders.  Yes.  Has  not  that  been  all  along  the  idea  in  con- 
nection with  the  operation  of  this  measure? 

Mr.  Ivy.  I  can  not  say  that  it  has  been  the  complete  idea. 

Mr.  Saunders.  Was  not  that  suggested  by  the  President? 

Mr.  Ivy.  I  think,  as  I  recall  it^  that  it  was,  that  that  idea  was 
suggested. 

Mr.  Saunders.  Has  there  been  any  suggestion  that  the  Govern- 
ment should  go  into  this  enterprise  for  the  purpose  of  reaping  profits 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      589 

that  would  come  in  a  direct  v^ay  from  the  conduct  of  the  business? 
On  the  contrary,  has  it  not  always  been  the  idea  that  the  Government 
should  go  into  this  enterprise  for  the  purpose  of  establishing  a  busi- 
ness out  of  which  the  whole  public  can  derive  a  profit,  and  not  with 
the  vieAv  of  the  (irovernment  deriving  a  profit  from  the  operation  of 
a  special  enterprise? 

Mr,  Ivy.  I  think  that  is  the  general  idea. 

Mr.  Saunders.  Then  the  Government  will  not  go  into  this  for  the 
purpose  of  reaping  a  profit  in  connection  with  the  immediate  opera- 
tion of  the  vessel,  but  that  this  advantage,  generally,  will  operate 
ultimately  as  a  benefit  for  the  whole  public, 
f  Mr.  Ivy.  Exactly  as  we  built  the  roads  in  New  Hampshire. 

Mr.  Saunders.  That  is  a  very  different  sort  of  situation  from  the 
*         contemplated  operation  by  the  Government  in  which  they  are  to  reap 
profits  from  a  single  line  or  single  ship.    I  can  agree  to  that  propo- 
sition. 

Mr.  Ivy.  I  go  further,  sir.    I  should  say  it  would  be  entirely  proper 
for  the  Government  to  operate  a  line  at  a  loss  that  was  going  to 
'^         benefit  any  large  number  of  American  business  men. 
'  Mr.  Saunders.  Yes;  that  was  the  thought  I  was  pressing.     But 

then  they  are  not  catering  to  profits  in  the  operation  of  that  line. 

The  Chairman,  The  Government  might  operate  a  line  without 
profit,  and  if  the  rates  were  reasonable  and  afforded  means  of  ex- 
tending our  commerce,  it  would  be  a  desirable  thing  to  do,  would 
it  not? 

Mr.  Ivy.  I  think  so,  sir. 

The  Chairman.  Private  enterprise  goes  into  shipping  just  like 
it  goes  into  the  manufacturing  business,  for  profit.  That  is  the  only 
incentive,  is  it  not? 

Mr.  Ivy.  Yes,  sir. 

The  Chairman.  If  these  lines  in  any  trade  could  be  operated 
without  loss  and  at  the  same  time  afford  American  industries,  agri- 
culture and  mining,  facilities  for  the  extension  of  our  commerce  and 
the  carrying  of  our  over-seas  trade,  that  would  be  a  good  investment 
for  the  people,  would  it  not? 

Mr.  Ivy.  I  think  it  would,  sir. 

The  Chairman.  But  it  would  leave  out  the  element  of  profit. 

Mr.  Ivy.  Yes,  sir. 

Mr.  Saunders.  That  is  all  I  have  been  pressing;  but  there  is  not 
any  chance  of  the  Government  operating  this  business  to  get  the 
profits  that  somebody  else  would  get. 

The  Chairman.  I  would  not  want  the  Government  to  do  that. 

Mr.  Hardy.  That  line  would  not  be  profitable  for  the  moment, 
maybe,  but  it  might  make  the  profit  in  some  places  and  suffer  a  loss 
in  others,  as  the  post  office  is  operated.  As  I  understand,  on  the 
first-class  mail  they  make  a  profit,  and  on  the  other  classes  they  do 
not. 

Mr.  Ivy.  I  do  not  see  that  it  would  not  be  proper  for  the  Govern- 
ment to  make  a  profit. 

Mr.  Hardy.  One  line  may  make  a  profit  and  the  other  a  loss ;  but 
on  the  wdiole  the  Government  does  not  care  to  make  a  profit,  just  so 
it  serves  the  public  interests. 

Mr.  Ivy.  Yes. 

32910—16 38 


590     SHIPPIIS'G  BOAED,  NAVAL  AUXILIAEY,  AND  MEECHAXT  MAEINE. 

Mr.  Edmonds.  In  your  investigation  of  shipping  interests  in  the 
country,  did  you  look  into  the  coastwise  traffic? 

Mr.  Ivy.  To  a  certain  extent  I  had  to  look  into  it,  because  I  knew 
at  that  time  we  could  only  utilize  coastwise  vessels. 

Mr.  Edmonds.  Do  you  think  the  present  provisions  of  our  laws 
were  made  to  preserve  the  coastwise  traffic  to  our  American  ships  ? 

Mr.  Ivy.  If  you  wall  limit  your  definition,  I  will  say  yes — if  you 
limit  it  to  coastwise ;  but  if  you  apply  it  to  interocean,  I  will  say  no. 

Mr.  Edmonds.  What  do  you  mean  by  interocean? 

Mr.  Ivy.  I  say  from  the  Pacific  Ocean  to  the  Atlantic  Avhen  they 
come  through  the  canal.  I  say  we  should  be  free  to  i^se  any  ships  from 
Pacific  ports  to  Atlantic  ports  through  the  canal. 

Mr.  Edmonds.  The  same  way  with  Haw-aii? 

Mr.  Ivy.  Yes,  sir. 

Mr.  Edmonds.  And  the  same  way  with  Porto  Rico? 

Mr.  Ivy.  Yes,  sir. 

Mr.  Edmonds.  You  believe  that  ought  to  be  open,  then,  to  all 
nations? 

Mr.  Ivy.  To  use  any  ships. 

Mr.  Edmonds.  All  nations  ? 

Mr.  Ivy.  Yes. 

INIr.  Edmonds.  Any  nation;  any  foreign  ship? 

Mr.  Ivy.  I  do;  because  that  is  not  the  definition  of  coastwise. 
Coastwise  is  along  one  coast — along  the  Atlantic  coast  and  along  the 
Pacific  coast. 

Mr.  Hardy.  You  used  the  expression  that  a  subsidy  was  inflexible. 
It  is  a  leading  question,  but  Mr.  Saunders  said  we  wanted  to  get 
back  to  normal  conditions  and  make  no  movement  applicable  to 
these  present  abnormal  conditions.  Can  the  legislature  fail  to  take 
cognizance  of  the  fact  that  we  have  those  abnormal  conditions,  and, 
as  a  subsidy  is  inflexible,  the  very  fact  that  if  you  pass  a  law  giving 
a  subsidy  of  so  much  a  mile  it  would  apply  in  abnormal  conditions 
like  the  present,  when  it  was  not  needed,  as  well  as  in  normal  condi- 
tions, when  it  is  claimed  to  be  needed? 

Mr.  Ivy.  I  do  not  think  there  is  any  doubt  about  that. 

Mr.  Hardy.  To-day  if  we  had  a  subsidy  by  law  passed  some  years 
ago  every  one  of  those  vessels  would  be  drawing  a  subsidy  while 
they  are  charging  such  high  rates  as  they  are  to-day. 

Mr.  Ivy.  I  think  that  is  a  fact. 

Mr.  Saunders.  Have  you  not  lost  sight  of  the  fact  that  this 
scheme  would  provide  for  the  regulation  of  rates  which  would  pre- 
vent that? 

The  Chairman.  We  are  paying  to-day  about  $735,000  as  a  subsidy 
for  American  Line  ships,  the  Neiv  York,  the  St.  Paid,  the  Philadet- 
phia,  and  the  St.  Louis,  at  just  the  same  rates  paid  in  normal  times, 
and  at  the  same  time  they  are  making  these  enormous  profits  by  vir- 
tue of  the  increase  in  the  ocean  freights.  That  is  simply  an  illustra- 
tion of  the  fact. 

Mr.  Edinionds.  You  might  add,  Mr.  Chairman,  that  they  are  the 
only  American  ships  in  which  you  can  go  to  Europe  to-day. 

The  Chairman.  Oh,  yes;  that  is  some  sort  of  satisfaction — that 
we  have  some  American  ships.  But  that  illustrates  the  point.  That 
is  all  I  wished  to  draw  out. 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MEECHANT  MAEINE.      591 

Mr.  Sau^sders.  Yes;  but  if  you  had  a  Government  subsidy,  with- 
out the  provisions  of  this  bill  to  control  the  rates,  you  have  decidedly 
the  same  situation. 

The  Chairman.  I  am  in  favor  of  the  provisions  of  this  bill  look- 
ing to  the  regulation  of  rates.  I  think  one  of  the  fundamental  ob- 
jections heretofore  to  any  form  of  subsidy  has  been  that  along  with 
it  there  has  been  no  suggestion  of  the  regulation  and  supervision  of 
rates. 

Mr.  Ivy.  I  just  want  to  make  one  other  statement  here.  It  does 
not  bear  directly  on  this  bill,  but  it  does  show  what  is  coming.  I 
have  a  friend  who  is  very  intimately  connected  in  England,  and  he 
told  me  two  days  ago  that  he  had  information  from  there  that  all  of 
the  German  prisoners  and  all  of  the  camps  in  England  had  been 
ordered  through  Germany  to  studv  the  Spanish  language,  and  they 
were  conducting  schools  in  Spanish  in  all  of  those  camps  in  Eng- 
land ;  and  that  seems  to  me  to  be  a  pretty  good  index  that  the  Ger- 
mans are  looking  toward  South  America. 

The  Chairman.  If  Ave  were  smart  we  would  be  qualifying  our 
consular  agents  to  go  into  the  different  countries  of  the  world  and 
study  those  conditions,  and,  as  a  necessary  adjunct  to  their  equip- 
ment, they  ought  to  understand  their  language. 

STATEMENT  OF  CAPT.  J.  F.  BLAINE,  OF  SEATTLE,  WASH., 
ASSISTANT  MANAGER,  IN  CHARGE  OF  THE  OPERATIONS  OF 
THE  PACIFIC  COAST  STEAMSHIP  CO. 

The  Chairman.  What  is  your  business? 

Capt.  Blaine.  I  am  assistant  manager  in  charge  of  operations 
of  the  Pacific  Coast  Steamshii)  Co. 

The  Chairman.  Between  what  ports  does  it  operate? 

Capt.  Blaine.  "We  are  operating  IT  ships,  covering  the  Pacific 
coast  at  practically  every  port,  and  to  Alaska,  and  we  have  one 
ship  under  charter  from  the  east  coast  to  South  America;  and  we 
have  had  two,  but  have  one  now,  under  charter  running  from  the 
west  coast  to  South  America.  But,  Mr.  Chairman.  I  have  no  author- 
ity whatever  to  speak  here  as  the  representative  of  the  Pacific  Coast 
Steamship  Co.,  although  I  am  an  official.  I  am  here  on  other  busi- 
ness, and  happened  to  be  in  Washington.  I  am  the  accredited  repre- 
sentative of  the  Merchants'  Exchange  of  Seattle,  and  on  the  matter 
I  wish  to  speak 

The  Chairman.  It  is  entirely  proper  to  understand  your  business 
affiliations.  Now,  this  Pacific  Coast  Steamship  Co. — who  are  the 
officers  of  it ;  who  is  its  president  ? 

Capt.  Blaine.  Mr.  J.  C.  Ford,  of  No.  10  Wall  Street,  New  York. 

The  Chairman.  ^Vhere  is  the  company  organized  ? 

Capt.  Blaine.  That  is  the  Pacific  Coast  Co.  The  Pacific  Coast 
Co.  is  the  holding  company  of  the  Pacific  Coast  Steamship  Co., 
which  is  a  California  corporation. 

The  Chairman.  Proceed. 

Capt.  Blaine.  I  have  not  anything  to  say  for  or  against  the  bill 
in  question,  but,  together  with  some  others  who  are  familiar  with 
the  shipping  business — ^I  might  say  I  have  spent  a  period  in  the 
steamboat -inspection  service  besides  being  a  shipmaster — we  have 


592      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

gotten  together  and  compiled  what  I  might  call  a  bill  that,  we 
think,  will  be  a  great  benefit — I  am  safe  in  saying  that — to  the  mer- 
chant marine  of  the  United  States.  A  bread  statement,  and  one 
often  used  but  seldom  explained,  is  that  our  laws  are  antiquated. 
It  is  not  so  much  the  antiquated  law^s  as  it  is  the  interpretation  of 
some  of  those  laws. 

We  believe  in  a  shipping  board.  We  believe  in  that  shipping 
board  having  the  authority  to  make  laws  consistent  wdth  safety  to 
meet  the  conditions  of  competitive  traffic  with  a  foreign  flag. 

The  Chairman.  You  understand  that  Congress  can  not  delegate 
the  power  to  the  shipping  board  to  make  laws,  do  you  not? 

Capt.  Blaine.  Not  to  make  the  laws;  I  mean  to  make  the  rules. 
Congress  has  delegated,  by  section  4405,  to  the  board  of  supervising 
inspectors  the  powder  to  make  rules  which,  when  signed  by  the  Secre- 
tary, have  the  force  of  law. 

The  Chairman.  Yes;  under  the  law  the}^  are  authorized  to  make 
regulations. 

Capt.  Blaine.  Yes;  and  many  of  those  regulations  are  a  menace 
and  expense  to  American  shipping.  I  can  prove  that,  sir,  in  two  in- 
stances. We  had  a  ship  from  South  America  to  Tacoma,  operating 
in  opposition  to  a  Norwegian  steamer,  and  we  got  into  San  Francisco 
on  an  expired  certificate,  and  the  inspectors  demanded  that  we  should 
discharge  the  cargo  in  order  that  it  conld  be  inspected;  and  the  Nor- 
wegian steamer  came  along,  discharged  its  part  of  the  cargo  at  San 
Francisco,  and  proceeded  on  the  voyage.  In  the  case  of  our  steamer, 
she  w^as  held  up  there  for  some  time. 

The  rules  as  constituted  now  discriminate  against  American  ship- 
ping, and  that  is  a  broad  statement  that  I  can  prove. 

Mr.  Hardy.  I  wish  you  would  make  that  very  clear.  We  want  to 
find  what  discriminations  are  practiced  against  our  ships  in  our  ports 
in  favor  of  foreign  ships. 

Capt.  Blaine.  I  am  willing  to  answer  any  question  on  that,  sir. 

Mr.  Hardy.  That  is  wdiat  I  wanted  to  get ;  that  is,  if  there  is  any 
rule  of  our  inspection  service  practiced  by  our  officials  or  required  by 
our  laws  that  discriminates  in  favor  of  the  foreign  vessel  against  the 
American  vessel.  If  so,  I  want  to  change  it.  It  has  never  been  shown 
us  heretofore  nor  has  anybody  complained  before  this. 

Mr.  Curry.  When  we  are  compelled  to  discharge  cargo  for  in- 
spection purposes,  that  is  a  rule  of  the  department,  is  it  not? 

Capt.  Blaine.  That  is  administrative  rule. 

Mr.  Curry.  That  is  an  administrative  rule? 

Capt.  Blaine.  Yes,  sir;  a  narrow  interpretation  of  the  law. 

Mr.  Curry.  That  is  simply  a  rule  that  was  put  in  operation  by  the 
department,  and  the  American  ship  is  compelled  to  discharge  its 
cargo  for  inspection  purposes? 

Capt.  Blaine.  Yes,  sir. 

Mr.  Curry.  And  that  costs  the  American  ships  how  much,  in  per- 
centage, more  than  the  foreign  ships  to  be  inspected? 

Capt.  Blaine.  Why,  the  foreign  cargo  ship  in  a  very  great  degree, 
if  accepted  by  the  classification  societies,  is  practically  free  from 
inspection. 

Mr.  Curry.  They  are  inspected  in  the  home  port  anywav,  are  they 
not? 

Capt.  Blaine.  All  vessels  are  inspected  in  the  home  ports. 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      593 

Mr.  Curry.  And  when  the  time  comes  for  you  to  be  inspected  they 
will  send  an  inspector  down  where  you  happen  to  be — they  will  send 
an  inspector  there  and  he  would  make  you  discharge  your  cargo  and 
reload? 

Capt.  Blaine.  Yes,  sir;  even  if  it  was  a  cargo  in  transit. 

Mr.  Curry.  That  is  one  rule  that  is  more  expensive  to  American 
ships  than  to  foreign  ships? 

Capt.  Blaine.  Yes. 

Mr.  Curry.  Now,  on  the  proposition  of  measurement;  under  the 
rules  they  measure  as  net  tonnage  everything  they  can  possibly  meas- 
ure as  net  tonnage,  do  they  not? 

Capt.  Blaine.  Yes ;  I  know  that  to  be  true. 

Mr.  Curry.  The  same  law  governs  the  measurement  of  American 
shipping  and  British  shipping,  but  under  the  British  rules  they  meas- 
ure out  everything  they  can,  giving  the  ship  that  much  advantage  in 
port  dues,  in  canal  dues,  and  matters  of  that  kind  ? 

Capt.  Blaine.  That  is  not  so  much  the  law  as  it  is  the  interpre- 
tation. 

Mr.  Curry.  I  did  not  say  it  was  the  law;  there  is  no  law^  at  all. 
The  proposition  of  law  is  identical,  but  because  of  the  rules  under  the 
law  that  the  American  ship  is  placed  at  a  disadvantage  in  the 
measurement? 

Capt.  Blaine.  Yes,  sir;  decidedly *so. 

Mr.  Curry.  That  simply  is  something  that  the  supervising  inspec- 
tor or  the  department  should  change.  They  could  change  the  rule 
if  they  wanted  to  ? 

<Capt.  Blaine.  If  the}^  so  elected. 

Mr.  Hardy.  How  about  fusible  plugs? 

Capt.  Blaine.  The  Steamboat  Inspection  Service  nave  seen  fit  to 
make  an  additional  fusible  plug  requirement,  for  what  reason  I  do 
not  know,  on  our  American  ships.  Our  steamer.  Eureka^  three 
months  ago  was  down  in  the  Gulf  of  Tehauntepec,  and  I  know  how 
hard  it  can  blow  down  there,  and  I  have  never  seen  a  ship  that  would 
not  roll.  This  ship  was  caught  in  a  gale  of  wind  and  she  rolled  to 
such  an  extent  that  she  exposed  one  of  those  fusible  plugs  and  it 
blew  the  boiler  dow^n.  If  she  had  been  on  a  lee  shore  and  had  but 
one  boiler  she  probably  would  have  been  lost,  and  there  would  have 
been  a  loss  of  life  there.  That  is  all  due  to  the  rules  and  to  the 
administration  of  the  law.  It  is  not  in  the  law^,  but  it  is  the  way  that 
law  is  interpreted.  Section  4405  is  the  law  that  confers  this  authority 
on  the  inspectors,  and  foreign  ships  are  exempt  from  that. 

Mr.  Hardy.  Interruptions  have  somewhat  broken  the  course  of 
your  statement.  I  would  like  to  have  you  make  a  statement  of  every 
respect  in  which  our  ships  are  discriminated  against  in  favor  of 
foreign  ships. 

Capt.  Blaine.  I  have  made  three  right  there  that  are  very  ex- 
pensive.   I  wdll  state  a  fourth. 

Mr.  Hardy.  Do  I  understand  that  the  fusible  plug  requirement  of 
the  inspection  service  applies  only  to  our  vessels? 

Capt.  Blaine.  That  is  correct. 

Mr.  Hardy.  Does  the  inspection  apply  to  our  vessels  only? 

Capt.  Blaine.  The  inspection  of  the  character  that  we  have  of 
freight  ships  we  do  not  object  to;  it  is  the  time  which  it  takes  du?" 


594      SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MEECHANT  MARINE. 

to  the  method — it  is  the  delay.  Great  Britain  expressly  specifies  that 
the  ship  shall  not  be  dela,yed  for  inspection. 

Mr.  Hardy.  Are  British  ships  inspected  in  her  ports,  and  our 
ships  in  our  ports? 

Capt.  Blaine.  It  could  not  be  otherwise;  yes,  sir. 

Mr.  Hardy.  When  our  ships  go  to  British  ports  do  they  have  the 
same  advantage  over  the  British  ships  there  that  Great  Britain's 
ships  have  over  our  ships? 

Capt.  Blaine,  We  only  have  four  ships  going  to  British  ports. 

Mr.  Hardy.  Are  our  ships  inspected  in  the  British  ports  just 
like  the  British  ships  are  here? 

Capt.  Blaine.  Our  passenger  ships  are  inspected  when  carrying 
passengers  from  a  British  to  an  American  port.  The}^  have  an 
inspection  of  the  equipment  and  mustering  of  the  crew  just  the  same 
as  they  have  of  their  own.  But  that  is  not  squeezing  the  boilers  or 
going  into  a  thorough  inspection  or  examination. 

JNIr.  Hardy.  Are  our  freight  vessels  where  they  go — unless,  maybe, 
we  have  not  any  ? 

Capt.  Blaine.  That  is  true. 

Mr.  Hardy.  So  that  you  can  not  say  what  they  would  do  to  us. 
But  I  wanted  to  know  if  there  was  any  evidence  from  which  you  can 
determine  whether  the  British  were  subjected  to  inspection  in  British 
ports  to  which  American  vessels  in  British  ports  were  not  subjected? 

Capt.  Blaine.  American  vessels  in  British  ports.  I  will  say  an 
American  freight  ship  would  not  be  inspected  leaving  a  British  port. 
The  British  ship  can  sail  indiscriminately  out  of  an  American  port 
without  inspection,  and  our  American  ship  is  held  up  unreasonably 
long  for  inspection. 

Mr.  Hardy.  Here  you  mean? 

Capt.  Blaine.  Yes. 

Mr.  Hardy.  But  in  England  they  do  not  inspect  our  ship? 

Capt.  Blaine.  Coming  to  this  country?  No;  they  would  not 
inspect  our  ships.  There  is  no  reason  to  do  it.  I  am  speaking  of  the 
freight  steamers. 

Mr.  Hardy.  I  am  speaking  of  the  freight  steamers.  It  seems  in- 
conceivable to  me  that  our  administrative  officers,  who  are  anxious 
to  promote  the  interests  of  our  shipping,  should  discriminate  against 
our  shipping.  I  do  not  understand  if  you  presented  that  to  them 
why  they  should  do  it,  nor  do  J,  want  them  to  do  it. 

Mr.  Curry.  I  do  not  think  you  understood  exactly  what  the  cap- 
tain said.  He  was  not  complaining  about  the  inspection  of  the 
British  ship  in  an  American  port  or  an  American  ship  in  a  British 
port.  What  I  understood  he  intended  to  say  was  that  the  British 
ship,  when  it  was  inspected  in  a  British  port,  was  not  compelled  to 
discharge  its  cai'go  for  the  purpose  of  inspection,  while  the  American 
ship  in  the  American  port  is  compelled  to  discharge  its  cargo  for  the 
purpose  of  inspection.  That  makes  the  inspection  of  the  American 
ship  in  the  American  port  a  great  deal  more  expensive  than  the 
inspection  of  the  British  ship  in  British  ports. 

Mr.  Hardy.  I  think  I  gathered  that  although  it  is  sort  of  confused, 
and  I  do  not  know  that  I  have  a  clearer  understanding. 

Mr.  Byrnes.  Do  you  mean  to  say  in  a  British  port  that  Mr.  Curry 
is  correct  in  stating  when  thej'^  inspect  the  British  ship  in  the  British 


SHIPPING  BOARD^  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE.      595 

port  they  do  not  force  that  ship  to  discharge  its  cargo  in  order  to 
make  inspection? 

Capt.  Blaine.  They  even  embody  it  in  their  rules  that  they  shall 
not  delay  their  ships  for  inspection.  They  do  everything  to  foster 
their  merchant  marine  and  still  play  safe. 

Mr.  Byrnes.  I  know.  But,  although  it  may  be  the  rule,  do  they 
make  them  discharge  their  cargo? 

Cnpt.  Blaine.  In  the  judgment  of  the  inspector,  if  it  is  necessary, 
I  Tvould  assume  the}'^  would  discharge  the  cargo.  I  am  not  prepared, 
however,  to  answer  the  question,  as  I  do  not  know. 

Mr.  Byrnes.  Is  there  a  hard  and  fast  rule  of  inspectors  in  Ameri- 
can ports  requiring  them  to  discharge  their  cargoes  in  order  to  make 
inspection  here? 

Capt.  Blaixe.  I  have  seen  that  applied ;  yes,  sir. 

Mr.  Byexes.  I  asked  you  is  it  a  hard  and  fast  rule  or  is  it  simply 
the  action  of  the  inspector? 

Capt.  Blaixe.  The  action  of  the  inspectors  would  cover  it. 

Mr.  Byrnes.  Then  it  is  somewhat  fixed,  and  your  contention  is, 
your  belief  is,  that  in  England  in  the  exercise  of  their  discretion  they 
do  not  require  it,  Avhile  in  America  in  the  exercise  of  their  discretion 
by  the  inspectors  they  do  require  it? 

Capt.  Blaine.  What  affects  us  more,  sir,  is  the  fact 

INIr.  Byrnes.  I  know,  but  is  that  so?  Let  me  see  if  you  under- 
stand that.  Judge  Hardy  here  has  been  asking  you  and  Mr.  Curry 
stated  what  I  think  3-011  intended  to  state,  but  j^et  you  won't  state  it. 
Do  you  state  in  this  country  the  American-owned  ship  is  at  a  disad- 
vantage because  in  its  inspection  they  require  its  cargo  to  be  dis- 
charged?    Is  that  right? 

Capt.  Blaixe.  In  America;  yes. 

Mr.  Byrxes.  In  America.  Now,  let  us  understand  about  Great 
Britain.  You  claim  there  that  the  British-owned  ship  is  not  required 
to  discharge  its  cargo  when  it  is  inspected.     Is  that  so? 

Capt.  Blaixe.  That  is  left  to  the  discretion  of  the  inspectors. 

Mr.  Byrxes.  It  is  left  to  the  discretion  of  the  inspectors  there? 

Capt.  Blaine.  Yes. 

Mr.  Byrnes.  Is  it  not  left  to  the  discretion  of  the  inspector  in 
America  ? 

Capt.  Blaixe.  I  won't  say  that  it  is  not. 

Mr.  Byrxes.  You  say  what? 

Capt.  Blaine.  I  will  not  say  that  it  is  not. 

Mr.  Byrnes.  '\^'liat  do  you  mean  by  that ;  that  you  do  not  know  ? 

Capt.  Blaine.  I  mean  I  have  been  an  inspector,  and  I  have  let 
the  inspection  go  by  because  it  was  not  displaying  commercial  intelli- 
gence to  compel  them  to  discharge  the  cargo,  and  in  other  cases  I 
have  seen  the  inspectors  stand  on  the  technicality  and  say  that  they 
must  discharge  their  cargoes. 

Mr.  Byrnes.  Then  it  is  in  the  discretion  of  the  inspector? 

Capt.  Blaine.  Yes,  sir;  but  it  should  not  be  in  the  discretion  of 
men  getting  from  $1,500  to  $2,500  a  year  to  pass  on  those  things. 
That  is  what  I  want  to  say  on  that  matter. 

Mr.  Byrnes.  How  much  did  you  get? 

Capt.  Blaine.  $2,250. 

Mr.  Byrnes.  Then  if  you  raised  the  salary,  you  would  be  satisfied  ? 


596     SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Capt.  Blaine.  No,  sir;  I  am  not  interested  in  the  Steamboat- 
Inspection  Service. 

Mr.  Byrnes.  You  started  to  tell  about  the  interpretation  of  the 
rules,  and  now  you  have  said  the  inspector  is  underpaid,  and  there- 
fore not  a  competent  man  to  fill  the  position  ? 

Capt.  Blaine.  I  do  not  say  they  are  not  competent  men;  they  are 
competent  men,  generally  speaking,  but  there  are  individuals  who, 
perhaps,  are  not. 

The  Chairman.  I  understand,  Capt.  Blaine,  they  do  not  exercise 
the  discretion  soundl}^  which  they  have  in  the  matter. 

Mr.  Eodenberg.  You  do  not  believe  that  that  discretion  should  be 
lodged  in  the  inspectors  to  compel  boat  cargoes  to  be  discharged  for 
the  purpose  of  inspection ;  you  do  not  think  that  is  fair  to  the  ship- 
pers? 

Capt.  Blaine.  When  the  master  and  the  engineer  of  the  ship  are 
satisfied  that  the  ship  is  safe  and  the  ship  is  in  transit  I  say  that  it 
should  not  be  discharged  and  put  a  burden  on  the  American  ship  that 
is  not  put  on  the  foreign  ship. 

Mr.  Rodenberg.  I  agree  with  you. 

The  Chairman.  I  think  Ave  all  agree  to  that. 

Mr.  Curry.  When  the  time  comes  for  the  inspection  of  the  Ameri- 
can ship  the  American  ship  must  be  inspected,  and  it  is  inspected 
whether  it  is  ready  or  not;  no  matter  if  it  is  not  ready  it  has  to  be 
inspected,  and  if  it  is  in  San  Francisco  it  has  to  be  inspected  in  San 
Francisco  ? 

Capt.  Blaine.  Yes. 

Mr.  Curry.  Whereas  under  the  British  rules  the  ship  goes  to  the 
home  port  and  is  given  papers  there.  And  if  in  Los  Angeles  or  an 
American  port 

Capt.  Blaine.  The  British  ship  would  not  have  any  inspection  at 
all. 

Mr.  Curry.  Not  until  she  got  home;  but  if  she  comes  in  loaded  she 
is  not  compelled  to  unload  her  cargo  in  order  to  inspect  her,  but  they 
inspect  her  loaded;  whereas  with  an  American  ship  when  the  time 
comes  for  inspection  she  must  be  inspected,  and  if  she  is  loaded  she 
must  be  unloaded  and  then  reloaded,  and  nine  times  out  of  ten  she 
is  loaded. 

vJapt.  Blaine.  Yes,  sir. 

Mr.  Curry.  I  think  that  is  what  you  intended  to  say  ? 

Mr.  Van  Dyke.  An  American  ship  in  an  English  port,  at  Liver- 
pool ;  do  they  have  to  go  through  the  same  inspection  ? 

Mr.  Curry.  No  ;  and  the  British  ship  in  this  port  does  not,  either. 

Mr.  Van  Dyke.  Then  that  is  not  true. 

Mr.  Curry.  It  is  simply  the  passenger  ships,  the  English  passenger 
ships  that  have  to  be  inspected  here  and  American  passenger  ships 
are  inspected  there. 

Mr.  Edmonds.  Only  as  a  protection  to  life. 

Mr.  Curry.  That  is  it. 

The  Chairman.  If  you  will  take  the  recent  publications  of  the  De- 
partment of  Commerce  "  Special  Agents'  Series  No.  114,  Navigation 
Laws:  Comparative  Study  of  the  Principal  Features  of  the  Laws  of 
the  United  States.  Great  Britain.  Germany.  NorAvay,  France,  and 
Japan,"  you  will  find  on  page  54  the  inspection  of  vessels  under  the 
laws  of  the  United  States.     On  page  56  you  will  find  the  laws  of 


I 


SHIPPING  BOARD,  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE.      597 

Great  Britain  affecting  the  inspection  of  vessels.  And  I  think  if  you 
will  examine  them  you  will  find  there  is  no  essential  difference  be- 
tween them  whatever. 

Mr.  Curry.  I  do  not  think  there  is  any  practical  difference  between 
them.    It  is  simply  an  interpretation  of  the  rules. 

The  Chairman.  The  fact  is  that  ours  were  copied  from  the  Eng- 
lish laws. 

Mr.-  Saunders.  Do  I  understand  you,  then,  to  say  that  these  in- 
spection laws  to  which  you  refer  are  more  intelligently  adminis- 
tered by  the  English  authorities  than  by  the  American  authorities, 
and  that  as  a  result  of  the  failure  on  our  part  to  use  that  same  good 
sense  which  the  English  use  in  enforcing  their  inspection  laws,  a 
burden  has  been  put  upon  our  commerce  which  places  it  at  a  disad- 
vantage with  its  foreign  competitors  ?  Is  that  the  substance  of  what 
I  understand  you  to  say  ? 

Capt.  Blaine.  Yes,  sir. 

Mr.  Hardy.  Xow  that  you  are  figuring  on  those  cases,  I  w\ant  to  call 
your  attention  to  (and  ask  you  if  it  is  correct)  some  testimony  that 
w^as  given  here  about  fusible  plugs.  I  want  to  find  if  it  is  a  restric- 
tion on  our  merchant  marine. 

Mr.  RoDENBERG.  Judge  Hardy,  being  a  landlubber,  will  you  tell 
me  what  a  fusible  plug  is? 

]SIr.  Hardy.  That  is  just  wdiat  I  was  going  to  do.  Here  is  a  gen- 
ileman  now  before  us  who  advocates  that  inasmuch  as  it  is  not  re- 
quired and  not  used  in  ships  of  any  other  country  that  it  should  be 
abandoned.  That  suggestion  came  before  us  in  pamphlet  form.  Mr. 
Chamberlain  was  before  us  and  testified,  and  I  asked  Mr.  Chamber- 
lain: 

Mr.  IlAUDV.  It  i<  a  very  trivial  matter,  is  it  not? 

Mr.  C'hamukki.ain.  It  is  not  a  larjie  matter.  It  certainly  can  not  be  called  a 
liandicaj)  on  the  American  merchant  marine. 

Mr.  Hardy.  Can  you  tell  us  just  what  a  fusible  plug  is? 

Mr.  Chamheulaix.  It  is  a  little  pluK  of  brass  with  a  soft  metal  inside  of  it 
that  will  melt  as  the  temperature  rises,  I  do  not  remember  to  what  degree, 
but  at  what  is  assumed  to  be  the  danger  point. 

The  Chaikman.  Capt.  McAllister,  will  you  explain  that  for  us? 

Capt.  McAllister.  This  fusible  plug  is  a  precautionary  measure  that  they  use 
for  boilers.  In  the  table  sheet  in  the  back  connection  of  the  Scotch  boiler  they 
insert  a  little  plug.  In  the  interior  of  this  plug  is  a  composition  of  metals 
which  melt  easily.  If  the  water  gets  down  below  this  plug  the  temperature 
rises  so  high  as  to  melt  this  fusible  alloy,  and  that  will  blow  out  and  give 
warning  that  the  water  is  low. 

The  Chairman.  That  is  in  the  interest  of  safety? 

Capt.  jMcAllistek.  That  is  in  the  intei-est  of  safety;  but  there  is  no  ship  in 
the  United  States  Navy  using  it  to-day,  and  there  is  no  revenue  cutter  wiiich 
uses  it  to-day.  They  have  other  precautionary  measures  wliich  do  not  make  it 
necessary. 

Mr.  Hardy.  It  is  nothing  but  a  safety  valve? 

Capt.  ^McAllister.  It  is  really  a  little  safety  appliaiiCe ;  yes,  sir.  They  cost 
from  .$3  to  $5  a  piece.  They  are  not  expensive,  but  what  the  ship  people  com- 
plain of  is  the  delay  and  bother  of  fitting  them.  They  have  to  insert  new  plugs 
each  year,  and  they  have  to  cool  the  boilers  down  to  put  them  in.  It  is  more 
bother  than  expense  really. 

Mr.  Curry.  And  it  involves  delay? 

Capt.  McAllister.  Delay  ;  yes,  sir. 

The  Chairman.  It  could  be  dispensed  with  without  militating  again.st  safety? 

Capt.  McAllister.  As  I  say,  the  United  States  Navy  and  the  Coast  Patrol 
dispensed  with  them  long  ago. 

Mr.  Hardy.  AVhat  do  they  have  in  lieu  of  them? 


598      SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MEECIIANT  MAEINE. 

It  seems  to  me,  Captain,  to  say  the  least,  that  it  is  once  a  year;  and 
do  you  think  that  is  a  great  handicap  ? 

Capt.  Blaine.  How  long  ago  was  that  testimony  taken? 

Mr.  Hardy.  About  five  or  six  days  ago. 

Capt.  Blaine.  We  put  those  in  every  four  months,  sir. 

Mr.  Hardy.  That  was  Capt.  McAllister's  testimony  about  it.  But 
even  for  every  four  months,  it  is  not  a  great  expense,  $3  ? 

Capt.  Blaine.  It  is  not  the  question  of  the  expenditure.  We  will 
expend  any  money,  any  steamship  company  will,  from  the  point  of 
policy,  and  it  will  spend  the  money  also  from  the  point  of  safety. 

Mr.  Hardy.  Do  you  think  you  have  some  equally  safe  substitute  for 
that  safety  valve  ? 

Capt.  Blaine.  It  is  not  a  safety  valve,  sir.  There  ought  to  be  one 
fusible  plug,  but  they  should  not  make  a  piece  of  Sw^iss  cheese  out 
of  a  boiler,  which  this  does ;  there  are  too  many. 

Mr.  Hardy.  There  is  no  question  if  our  inspection  force  are  making 
Swiss  cheese  out  of  the  boilers  that  they  are  fools,  and  they  ought  to 
be  discharged. 

Mr.  Curry.  It  is  not  the  proposition  of  the  cost  of  the  one  plug; 
it  is  the  cooling  down  of  the  boiler  and  the  delay,  wdiich  costs  a  great 
deal  of  money. 

]Mr.  Hardy.  Certainly;  but  the  captain  says  they  require  a  good 
many  of  them. 

Capt.  Blaine.  I  do,  sir;  and  more  than  anywhere  else;  and  they 
do  not  do  any  good. 

Mr.  Hardy.  The  committee  ought  to  prefer  charges  against  the  in- 
spection service  for  being  incompetent. 

Capt.  Blaine.  I  am  not  doing  anything  vicious. 

Mr.  PIardy.  It  is  vicious  if  your  testimony  is  correct. 

Capt.  Blaine.  I  should  recommend  to  put  under  that  commission 
the  inspection  service  and  the  Bureau  of  Navigation. 

Mr.  Hardy.  What  would  you  call  a  commission,  except  the  Steam- 
boat-Inspection Service,  which  is  just  like  a  commission,  with  the  sub- 
ordinates and  a  higher  officer  and  then  the  highest  officer? 

Capt.  Blaine.  Those  men  should  be  commercial-minded  men;  they 
should  put  men  in  there  with  commercial  minds. 

Mr.  Hardy.  We  can  not,  by  law,  determine  what  kind  of  minds 
men  shall  have  that  will  fill  a  place. 

Capt.  Blaine.  It  is  so  in  the  Interstate  Commerce  Commission. 

Mr.  Hardy.  Do  you  think  there  is  any  possibility  of  determining 
by  law  the  mental  capacity  of  men  except  in  the  discretion  of  the  ap- 
pointing power  that  he  is  fit  ? 

Mr.  Curry.  You  have  been  in  the  service? 

Capt.  Blaine.  I  have  been  in  the  service ;  j^es,  sir. 

Mr.  Curry.  What  do  you  think  about  this  hydrostatic  boiler  test? 

Capt.  Blaine.  I  think  in  the  case  of  freight  steamers  it  is  abso- 
lutely unreasonable. 

Mr.  Curry.  If  you  have  been  in  the  service  you  can  give  us  in- 
formation, and  that  is  what  I  want,  why  it  is  unfair  and  why  it  is 
unreasonable.  Besides  the  extraordinary  pressure  on  the  boiler, 
which  tends  to  weaken  it,  is  it  a  safety  proposition  to  inspect  it  that 
way,  and  is  it  expensive,  and  why  do  they  use  the  hydrostatic  test 
on  boilers?    I  know^  that  other  nations  do  not  have  it,  but  Ave  do. 

The  Chairman.  Explain  what  the  hydrostatic  test  is. 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MEECHANT  IvIARlNE.      599 

Capt.  Blaine.  In  our  country  we  take  boilers  and  put  one  and  a 
half  times  the  steam  pressure  allowed  on  that  boiler  and  put  it  on, 
sir,  in  water  supposed  to  be  under  72  degrees.  I  think  Capt.  Mc- 
Allister will  bear  me  out  in  saying  that  is  equal  to  double  the  steam 
pressure,  and  that  is  a  pressure  we  never  get  or  can  get  on  a  boiler. 
Other  countries  do  not  do  that.  And  in  proof  of  the  effect  of  that, 
I  believe  the  American  builds  as  good  a  boiler  as  any  country  in  the 
world,  and  yet  the  average  life  of  our  boiler  is  18  years  and  the 
average  life  of  the  British  boiler  is  24  years. 

Mr.  CuRKY.  In  this  hydrostatic  test  do  they  not  pump  the  boiler 
full  of  water  and  then  keep  on  pumping  until  they  get  the  pressure  ? 

Capt.  Blaine.  Until  they  get  the  pressure. 

Mr.  Curry.  And  it  strains  the  boiler? 

Capt.  Blaine.  It  naturally  strains  the  boiler  in  its  cold  state  and 
causes  leaks. 

Mr.  Curry.  And  it  is  compelled  to  stand  a  strain  of  twice  as  much 
as  is  permitted  under  any  ordinary  circumstances :  that  is,  it  is  twice 
the  amount  of  strain  that  the  steam  strain  would  be  under  any 
circumstances  while  the  ship  was  at  sea? 

Capt.  Blaine.  Fully  that — the  cold-water  test. 

Mr.  Curry.  How^  often  is  that  done? 

Capt.  Blaine.  In  our  country  every  12  months. 

The  Chairman.  How  often  is  it  done  abroad — by  England? 

Capt.  Blaine.  Great  Britain  does  not  have  that  test,  except  at  the 
discretion  of  the  inspectors.  Of  course.  Great  Britain  is  fortunate  in 
that  its  classification  society — that  is,  its  bulwark — means  something. 

The  Chairman.  What  do  .you  mean  by  the  classification  society? 

Capt.  Blaine.  That  is  getting  me  into  deep  water.  It  is  some- 
thing hard  to  explain. 

The  Chairman.  You  say  it  means  a  great  deal? 

Capt.  Blaine.  Yes.  sir. 

The  Chairman.  We  can  not  determine  if  it  means  anything  of 
value  unless  we  know  what  it  is. 

Capt.  Blaine.  There  are  societies — for  instance,  they  have  the 
Bureau  of  Veritas,  that  classes  ships,  and  to  keep  within  the  class 
the  ships  must  be  kept  up  to  a  certain  standard.  I  can  not  say 
whether  the  British  Board  of  Trade  recognizes  the  societies  or  not. 

Mr.  Curry.  They  recognize  the  Lloyd's,  do  they  not? 

Capt.  Blaine.  I  can  not  make  a  positive  statement. 

Mr.  Curry.  I  do  not  mean  the  insurance  of  Lloyd's,  but  I  mean 
the  classification  of  Lloyd's. 

Capt.  Blaine.  I  am  not  sure. 

Mr.  Hardy.  Have  you  the  bill,  that  you  spoke  of  as  your  bill, 
which  is  intended  to  remove  the  evils  that  you  speak  of? 

Capt.  Blaine.  I  have;  yes,  sir. 

Mr.  Hardy.  Is  it  easily  set  forth  in  words,  or  is  it  lengthy? 

The  Chairman.  What  I  would  like  to  know^  now.  Captain — of 
course,  we  are  considering  now  H.  R.  10500,  known  as  the  shipping 
bill;  what  suggestions  have  you  to  make  with  regard  to  this  pro- 
posed legislation? 

Capt.  Blaine.  That  relates,  in  a  degree,  to  a  commission  or  to  a 
shipping  board. 

The  Chairman.  In  what  way?     Make  it  clear,  now;  in  what  way? 

Capt.  Blaine.  H.  R.  10500, 1  think,  provides  for  a  shipping  board. 


600      SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

The  Chairman.  In  what  way  does  it  reUite  to  10500,  or  in  what 
way  would  you  have  the  bill  amended  to  meet  your  view? 

Mr.  Hadley.  I  think,  Mr.  Chairman,  if  he  would  just  go  forward 
and  make  his  statement  of  what  he  has  here  it  would  perhaps  clear 
it  up. 

The  Chairman.  In  other  words,  to  make  it  plain,  do  you  think  the 
powers  now  vested  in  the  Department  of  Commerce— that  is,  the 
Bureau  of  Navigation  and  the  Steamboat-Inspection  Service — should 
be  transferred  to  this  shipping  board  ? 

Capt.  Blaine.  Yes,  sir ;  to  a  commission ;  and  that  the  commission 
shall  make  a  careful  comparison  between  the  navigation  laws  of  the 
United  States  and  the  maritime  countries  to  ascertain  if,  as  regards 
the  regulations  for  American  shipping,  our  regulations  carry  any 
burden  that  the  shipping  of  other  nations  are  free  from,  and  to 
remove  the  same.  Not  to  report  to  Congress,  but  to  give  them  power 
to  remove  the  same,  by  consent  of  the  President. 

The  Chairman.  Now  I  get  your  idea.  You  think  these  powers 
ought  to  be  vested  in  the  shipping  board? 

Capt.  Blaine.  Yes,  sir.  But,  in  view  of  the  conditions  as  they  are 
now,  which  are  unhealthy  to  our  over-seas  trade,  I  do  not  belicA^e  that 
the  time  is  ripe  for  regulating  the  rates  of  a  steamship  company  or 
determining  even  a  subsidy  or  program  of  building  Government 
ships.  I  do  not  think  it  w^ould  be  commercial,  Mr.  Chairman.  If 
we  could  get  the  administration  and  interpretation  of  our  navigation 
laws  down  to  a  point  where  we  were  on  a  par  with  the  Norwegian  or 
British  ships,  particularly  with  our  freight  ships,  not  so  much  with 
our  passenger  ships,  we  would  be  in  a  fair  fighting  position. 

Mr.  Saunders.  In  that  connection,  let  me  ask  you  the  same  ques- 
tion Judge  Hardy  did.  Will  you,  in  a  specific,  concrete  way,  suggest 
what  is  necessary  to  be  done  to  get  our  ships  down  to  a  fair  state  of 
competition  between  American  and  Norwegian  ships?  That  would 
bring  right  to  the  fore. 

Mr.  Ed:monds.  The  captain  has  something  to  suggest  in  the  way  of 
a  subsidy  bill,  and  I  think  it  would  not  be  a  bad  idea  to  put  it  in  the 
record,  and  then  we  can  read  it  over. 

Mr.  Saunders.  That  is  all  right,  but  while  we  are  on  that  point, 
the  point  of  disadvantage  to  our  freight  ships,  for  instance,  with 
the  Norwegians,  and  that  something  could  be  done  to  put  us  on  an 
equality,  I  asked  the  same  question  in  connection  with  the  question 
that  Judge  Hardy  has  been  asking,  for  you  to  tell  us  now,  in  a  con- 
crete way,  what,  in  your  judgment,  ought  to  be  done  to  put  us  in 
that  position? 

Capt.  Blaine.  First,  I  would  say  the  appointment  of  a  commis- 
sion of  this  character  with  power  enough  to  interpret  the  law  so  that 
the  results  would  be  equal.  First,  I  would  take  up  the  point  of  the 
measurement  of  the  ship,  so  that  a  Norwegian  ship  of  3,000  tons 
coming  in  to  the  port,  we  will  say,  of  New  York,  and  that  is  carry- 
ing 3.000  tons,  would  have  exactly  the  same  measurement  as  an 
American  ship  coming  in  carrying  3,000  tons — to  see  that  the  in- 
spection requirements  were  the  same  for  the  two  vessels,  and  that  the 
original  construction  requirements  were  the  same. 

The  Chairman.  Eight  at  that  point.  Here  are  Germany,  Norway, 
and  Great  Britain;  they  may  have  different  inspection  laws — to 
which  one  must  we  conform  ? 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      601 

Capt.  Blaine.  I  would  take  the  one  most  lenient  to  operate  under 
for  the  American  commerce;  and  if  the  commission  had  the  discre- 
tion they  could  use  their  judgment  there  to  meet  conditions. 

Mr.  Saunders.  Your  measurement  proposition — it  seems  to  me  to 
be  a  very  simple  one.  You  mean,  now,  that  the  Norwegian  ship 
which  does  not  carry  a  ton  more  of  freight,  for  instance,  and  can  not 
carry  a  ton  more  of  freight  than  its  hypothetical  American  com- 
petitor, we  will  say,  has  an  advantage  in  coming  in  to  the  port  of 
New  York  over  its  American  competitor? 

Capt.  Blaine.  That  is  a  matter  of  record,  sir. 

Mr.  Saunders.  How  is  that  brought  about,  and  what  would  you 
suggest  to  relieve  that? 

Capt.  Blaine.  I  only  say  that  a  commission  with  a  commercial 
mind 

Mr.  Saunders.  How  was  it  brought  about  in  the  first  instance; 
how  was  that  inequality  produced  as  against  our  American  ships? 
We  do  not  want  to  stand  for  anything  like  that  if  we  know  it. 

Capt.  Blaine.  I  attribute  that  to  the  interpretation  of  the  laws  by 
the  administrative  officers. 

Mr.  Saunders.  Do  you  mean  to  say  our  people,  with  the  spirit 
to  put  those  two  ships  that  I  have  given  as  competitors  on  an 
equality,  interpret  the  laws  to  the  disadvantage  of  the  xVmerican 
ships  and  in  favor  of  the  Norwegian  competitor? 

Capt.  Blaine.  Apparently  so,  sir. 

Mr.  Saunders.  In  what  way  do  they  do  that?  We  would  be  glad 
to  get  something  concrete. 

Capt.  Blaine.  I  only  used  the  question  of  measurements,  but  I 
could  go  into  another  tender  subject — the  seamen's  bill. 

Mr.  Curry.  Is  not  this  true,  that  in  the  American  port,  the  Nor- 
wegian port,  or  the  English  port  they  all  have  measurements  for 
tonnage  dues;  but  in  New  York,  while  the  tonnage  dues  are  charged 
according  to  our  tonnage  measurements,  the  British  ship  in  a  British 
port,  or  the  Norwegian  ship  under  the  Norwegian  commission,  the 
Norwegian  ship  having  an  equal  tonnage  with  the  American  ship, 
pays  the  same  tonnage  dues  in  New  York  as  the  American  ship,  still 
the  American  ship,  when  it  goes  over  to  Norway  or  England,  pays 
the  registered  American  tonnage,  which  gives  us  a  disadvantage? 
For  instance.  Col.  Goethals  the  other  day  called  attention  to  the  fact 
that  an  American  ship  was  charged  $500  more  for  going  through  the 
Panama  Canal  than  her  identical  sister  ship.  He  did  not  seem 
to  know  why  that  was.  He  thought  the  laws  of  the  United  States 
were  responsible  for  it,  when  as  a  matter  of  fact  the  laws  of  Great 
Britain  and  the  United  States  are  almost  identical  regarding 
measurements;  but  in  Great  Britain,  in  measuring  a  ship  for  net 
tonnage,  they  measure  out  everything  possible  and  give  it  the  lowest 
net  tonnage  possible  under  the  law. 

Mr.  Rodenberg.  They  deduct  everything? 

Mr.  Curry.  They  deduct  everything  possible  from  the  gross  ton- 
nage to  make  the  net  tonnage;  and  it  is  the  policy  of  our  department 
to  measure  in  everything  possible  to  make  the  tonnage  as  great  as 
possible. 

Mr.  Saunders.  That  presents  a  means,  then,  Mr.  Curry,  to  get  at 
what  we  are  after;  it  is  a  very  simple  situation.     We  can  instruct 


602      SHIPPING  BOAED,  NAVAL  AUXILIAEY,  AND  MEECHANT  MAEINE. 

our  people,  by  law  or  otherwise,  to  do  just  what  England  does,  and 
if  our  people  have  got  any  discretion  in  this  matter  about  how  they 
shall  be  measured,  to  see  that  they  do  not  deliberately  continue  to 
measure  in  so  as  to  put  our  people  at  a  disadvantage. 

Mr.  Loud.  Robert  Dollar  says  that  in  his  own  ships  the  same  ship 
measured  in  a  foreign  port  is  700  to  900  tons  less  than  measured  by 
our  system. 

Mr.  Hardy.  Mr.  Loud,  Capt.  Dollar  stated  that  about  a  year  ago 
here,  and  it  was  the  first  time  it  ever  came  to  our  attention,  and  we 
have  been  wrestling  with  it  ever  since.  Mr.  Chamberlain  came  here 
che  other  day  and  made  this  statement;  he  stated  that  our  laws, 
with  reference  to  measurement,  were  practically  in  conformity  with 
the  English  law  in  every  respect,  except  in  some  respects  they  had 
the  advantage  in  reference  to  unloading.  He  also  stated  that  every 
vessel  that  left  our  ports  with  an  American  certificate  of  measure- 
ments of  tonnage  has  the  right  and  we  gave  them  the  opportunity  to 
take  along  with  it  a  certificate  converting  our  measurements  into 
English  tonnage,  or  they'  could  carry  the  shipping  tonnage  certifi- 
cate for  the  port  of  entrance  of  any  nation  in  the  world,  and  that 
if  they  paid  excess  dues  it  was  their  own  fault. 

Mr.  Loud.  Do  you  mean  to  say  the  method  of  measurement  has 
been  changed  ? 

Mr.  Hardy.  He  said  they  granted  a  certificate,  as  I  understood, 
Avhich  was  made  to  conform  to  their  measurements  there,  so  as  to 
have  no  discrimination  against  us,  and  that  they  gave  the  measure- 
ment of  our  ship  in  English  terms  or  any  other  terms  for  foreign 
j)orts,  and  that  for  foreign  vessels  coming  into  our  own  ports,  they 
got  no  more  favor  in  the  matter  of  tonnage  dues  than  our  ships. 
That  is  Mr.  Chamberlain's  testimony.  I  do  not  know  whether  Mr. 
Blaine  has  read  the  testimony,  but  I  would  like  to  ask  you  to  read 
his  testimony.  He  went  into  the  whole  subject  here  and  presented  it 
to  us.  and  when  he  get  through  he  could  not  find  any  conscious  dis- 
crimination against  American  shipping,  and  I  certainly  can  not 
conceive  of  any  desire  on  the  part  of  our  inspectors  to  load  our  ships 
down  with  unfair  burdens  or  dues.     It  would  be  absurd. 

Mr.  Curry.  They  do;  and  I  asked  the  question  why.  and  he  said 
it  was  simply  from  a  desire  to  increase  the  port  and  tonnage  dues. 

Mr.  Hardy.  They  might  do  it  here.  but.  if  you  remember,  he  said 
every  ship  could  carry  for  a  British  port,  a  German  port,  or  a  Nor- 
wegian port  a  certificate  converting  our  measurements  into  the  meas- 
urements of  any  other  country. 

Mr.  Curry.  They  could  always  do  it. 

Mr.  Loud.  Do  you  mean  to  say  that  a  boat  going  through  the 
Suez  Canal  would  have  the  option  as  to  which  method  of  measure- 
ment it  would  go  under? 

Mr.  Hardy.  I  do  not  know  what  he  said  about  that,  but  he  said 
there  Avas  absolutely  no  discrimination  in  our  measurements  at 
present  against  our  vessels. 

Mr.  Hadley.  You  have  spoken  two  or  three  times  about  having 
a  board  of  commercial  minds.  I  would  like  to  have  you  state  what 
kind  of  a  board  j'ou  would  suggest,  concretely. 

The  Chairman.  I  was  going  to  say,  if  you  will  turn  to  page  172 
of  this  same  publication.  Navigation  Laws,  comparative  study  of  the 
principal  features  of  the  laws  of  the  United  States  and  Great  Brit- 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      603 

ain,  Germany,  Norway,  France,  and  Japan,  you  will  find  in  Ap- 
pendix D,  "  Deductions  other  than  propelling  power  under  the  meas- 
urement rules  of  Great  Britain,  the  Suez  Canal  Co.,  Germany,  and 
the  United  States."  I  think  you  will  get  more  information  there 
than  3'ou  can  get  from  this  witness. 

Mr.  Hadley.  I  was  going  to  ask  as  to  the  character  of  board  he 
would  suggest,  because  I  thought  we  might  be  able  to  get  it  con- 
cretely stated.  But  if  this  proposed  measure  is  to  go  into  the  record, 
that  will  answer  all  of  my  questions,  I  think,  as  the  chairman  has 
suggested. 

The  Chairman.  "We  would  be  very  glad  to  have  his  suggestions  in 
that  bill  for  consideration. 

Mr.  Hadley.  And  if  the  captain  wishes  to  make  any  further  sug- 
gestions about  its  contents,  I  would  like  to  hear  it,  so  far  as  they 
bear  on  10,500. 

Mr.  RoAVE.  Have  you  any  more  difficulties  that  you  would  like  to 
present  ? 

Capt.  Blaine.  I  might  sav  the  crew  requirements  are  a  discrimi- 
nation against  American  ships.  Some  of  the  other  countries  set 
forth  in  the  publication  to  which  Judge  Alexander  refers,  much 
of  that  is  left  to  the  discretion  of  the  owner;  and  then  that  owner 
or  operator  is  our  competitor.  Eecently  an  appeal  was  taken  to 
Washington  on  our  steamer  Umatilla^  that  was  laid  up  and  not 
operated  because  they  could  not  operate  with  the  expensive  crew. 
She  will  carry  3,000  tons.  But  there  is  not  a  commercial  mind  in 
those  two  bureaus  now.  They  require  6  seamen,  3  mates,  a  master, 
a  chief  engineer,  3  assistants.  3  water  tenders,  3  oilers,  9  firemen,  and 
6  coal  passers.  The  vessel  has  a  speed  of  10^-  knots  and  burns  34^ 
tons  of  coal  a  day.  She  was  inspected  in  one  part  of  the  country. 
The  Newton^  that  Avill  carry  7,000  tons,  of  the  same  speed,  was  re- 
lieved from  carrying  ()  coal  passers,  3  water  tenders,  and  1  engineer, 
and  burns  42  tons  of  coal  a  day.  I  am  merely  giving  this  as  an 
illustration  of  the  interpretation  of  the  law  in  different  ways  as 
being  a  hardship  on  us.  This  is  not  a  commercial  interpretation  of 
the  law  nor  a  uniform  manner  as  they  administer  it.  An  appeal  was 
finally  taken  to  the  Supervising  Inspector  General,  and  we  could  not 
operate  the  VmatiUa  without  putting  her  under  the  flag  of  another 
country. 

Mr.  RowE.  If  3''ou  had  her  under  the  Norwegian  flag  how  many 
men  would  she  require? 

Capt.  Blaine.  One  master,  possibly  two  mates — maybe  one — six 
seamen,  one  chief  engineer,  and  another  engineer. 

Mr.  Hardy.  You  are  speaking  now  under  the .  requirements  of 
the  seamen's  bill  ? 

Capt.  Blaine.  The  seamen's  bill  has  no  reference  to  this,  sir. 

Mr.  Hardy.  It  is  without  regard  to  the  seamen's  bill  ? 

Capt.  Blaine.  Without  regard  to  the  seamen's  bill. 

Mr.  Hardy.  But  simply  that  our  inspection  service  has  required 
more  men  than  other  countries? 

Capt.  Blaine.  Yes,  sir. 

Mr.  Hardy.  Do  you  believe,  therefore,  that  we  ought  to  make  no 
requirements  as  to  the  sufficiency  of  the  crew  ? 

Capt.  Blaine.  If  we  are  going  to  compete  with  the  other  man  we 
have  to  carry  the  same  crew  as  the  other  man. 


604      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Hardy,  Your  position  is,  then,  that  we  ought,  to  enable  us 
to  compete,  to  leave  the  shipowner  to  do  just  as  he  pleases  about  the 
number  of  his  crew,  in  order  that  he  may  make  them  as  few  as  any- 
other  competitor? 

Capt.  Blaine.  Oh,  no;  I  believe  in  stating  what  men,  but  I  would 
not  be  radical  with  the  shipowner  or  anybody  else. 

Mr.  Hardy.  But  whenever  w^e  make  a  requirement  you  object  on 
the  ground  that  it  would  prevent  competition  ? 

Capt.  Blaine.  I  would  make  my  requirements  commercial. 

Mr.  Hardy.  But  you  want  to  clothe  somebody  with  a  discretion? 

Capt.  Blaine.  Somebody  with  a  commercial  mind. 

Mr.  Hardy.  The  only  thing  is  you  would  like  to  determine  the 
commercial  mind? 

Capt.  Blaine.  Sir? 

Mr.  Hardy.  The  only  thing  is  you  would  like  to  have  a  commercial- 
minded  man  clothed  with  this  discretion  ? 

Capt.  Blaine.  I  would  rather  see  a  commission  than  a  discretion 
in  one  person. 

Mr.  Saunders.  In  that  case  you  have  cited,  do  I  understand,  the 
requirement  for  a  smaller  ship  was  much  more  exacting  than  for  a 
larger  ship? 

Capt.  Blaine.  Yes,  sir. 

Mr.  Hardy.  And  yet,  under  our  inspection  service,  if  the  inspector 
makes  a  requirement  that  is  appealable  to  the  supervising  inspector 
of  the  district,  and  after  that  to  one  man — the  supervising  inspector 
general ;  so  you  have  under  existing  law  the  one  man  at  the  head  of  it. 
Is  not  that  true  ? 

Capt.  Blaine.  There  is  one  man.  I  say  there  should  not  be  the 
one  man. 

Mr.  Hardy.  Well,  we  have  just  one  man  now. 

Mr.  EoDENBERG.  He  objects  to  that. 

Capt.  Blaine.  I  say  that  has  been  appealed  clear  through  to  the 
supervising  inspector  general  and  sustained. 

The  Chairman.  Do  .you  think  the  captain  of  the  ship  should  stand 
watch  with  the  mates  ?    You  do  not  think  that,  do  you  ? 

Capt.  Blaine.  The  master  of  an  ocean-going  ship  should  stand 
watch  and  watch? 

The  Chairman.  Yes ;  or  to  stand  watch  at  all  ? 

Capt.  Blaine.  On  the  ocean-going  ship? 

The  Chairman.  Yes. 

Capt.  Blaine.  No,  sir. 

The  Chairman.  You  do  not  think  that  requirement  unreasonable, 
do  you? 

Capt.  Blaine.  No,  sir. 

The  Chairman.  Do  you  think  the  mates  ought  to  stand  watch  and 
watch  ? 

Capt.  Blaine.  Coastwise,  where  they  have  short  runs,  Avatch  and 
watch.  Offshore,  I  will  say  runs  over  400  miles,  they  ought  to  have 
three  watches.  I  have  been  a  mate  and  a  sailor,  too,  and  I  appreciate 
what  it  means,  and  I  think  in  the  interest  of  safety  there  should  be 
three  watches. 

The  Chairman.  Very  well,  there  ought  to  be  three  mates  on  the 
vessel. 

Capt.  Blaine.  Yes,  sir. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      605 

The  Chairman.  Very  well.  Then  let  us  take  the  engine  room. 
You  say  there  ought  to  be  a  chief  engineer  and  an  assistant  engineer. 
Ought  there  to  be  more  on  any  ship  ? 

Capt.  Blaine.  Yes,  sir;  but  licensed  engineers  are  not  necessary. 
An  engineer  is  a  mechanic,  with  all  due  respect  to  Capt.  McAllister. 
And  you  can  take  a  thorough  mechanic  out  of  a  machine  shop,  as  they 
do  in  Great  Britain  and  Norway. 

The  Chairman.  How  many  do  you  think  there  sliould  be  in  the 
engine  room  ? 

Capt.  Blaine.  On  a  freight  steamer,  say  one  of  3,000  tons,  the  two 
certificated  engineers  have  proven  sufficient  and  safe  in  Great  Britain 
for  man}^  years. 

The  Chairman.  They  ought  to  stand  on  watches,  ought  they  not? 

Cai^t.  Blaine.  There  ought  to  be  somebody  on  watch. 

The  Chairman.  Should  either  the  chief  engineer  or  assistant  engi- 
neer be  on  watch  all  the  time,  or  would  you  leave  it  with  the  me- 
chanic to  run  the  ship? 

Capt.  Blaine.  They  are  mechanics,  sir. 

The  Chairman.  You  say  there  is  no  difference  between  the  engi- 
neer and  a  mechanic? 

Capt.  Blaine.  The  one  has  a  certificate  that  strengthens  his  posi- 
tion ;  that  is  all. 

The  Chairman.  Should  one  of  these  certificated  men  be  on  watch 
all  the  time? 

Capt.  Blaine.  If  a  man  is  a  thorough  mechanic  and  has  the 
ability,  I  see  no  reason  why  he  should  not  stand  watch. 

The  Chairman.  If  he  has  the  ability  and  skill,  why  should  he  not 
be  certificated  as  such? 

Capt.  Blaine.  They  do  issue  a  certificate  in  these  other  countries. 
Let  him  be  certificated  and  put  on  a  par  with  the  other  country,  but 
I  would  not  carry  more  than  they  do. 

The  Chairman.  I  do  not  care  what  you  call  him,  if  he  has  to  be 
there,  he  has  to  be  paid,  does  he  not?  That  does  not  diminish  the 
cost? 

Capt.  Blaine.  The  pay  is  different  when  the  man  has  a  certificate. 

The  Chairman.  There  should  be  three  men,  should  there  not,  in 
the  engine  room? 

Capt.  Blaine.  I  won't  say  three  licensed  men. 

The  Chairman.  Three  men? 

Capt.  Blaine.  Three  men. 

The  Chairman.  They  ought  to  be  skilled  men? 
*Capt.  Blaine.  On  voyages  over  400  miles. 

The  Chairman.  And  skilled  men;  is  not  that  true?  In  other 
words,  the  man  on  the  watch  ought  to  be  a  skilled  man,  and  he  ought 
to  understand  his  duty  and  know  how  to  take  care  of  every  duty  in 
the  engine  room,  ought  he  not,  whether  he  has  a  certificate  or  not  ? 

Capt.  Blaine.  Yes. 

Mr.  Curry.  You  said  that  a  man  could  be  taken  from  a  machine 
shop  and  made  an  engineer  on  a  ship. 

Capt.  Blaine.  In  Great  Britain  they  do.  I  have  been  before  the 
mast  on  an  English  ship,  although  American  born,  and  they  have 
two  certificated  engineers — a  chief  and  a  second.  Then  thev  take 
men  out  of  the  shop  and  call  them  the  third  and  the  fourth.  They 
have  served  there  four  years. 

32910—16 89 


606     SHIPPING  BOARD,  NAVAL  AUXILIARY.  AND  MERCHANT  MARINE. 

And  then  another  thing  where  we  have  a  hardship :  In  Great 
Britain  a  man  can  be  certificated  before  he  is  21,  but  not  so  in  this 
country. 

Mr.  Curry.  You  take  this  proposition  of  the  engineers,  and  you 
take  a  man  out  of  a  machine  shi)p  and  put  him  in  the  engine  room, 
how  much  oil  or  coal  would  he  waste  if  he  did  not  understand  how 
to  handle  it?  Do  you  think  that  would  be  an  economical  proposition 
for  the  owner? 

Capt,  Blaine.  The  man  direct  from  the  machine  shop? 

Mr.  Curry.  Yes. 

Capt.  Blaine.  He  would  be  a  better  man  than  what  is  known  as 
the  shovel  engineer. 

Mr.  Curry.  That  is  begging  the  question  entirely.  The  shovel 
engineer — that  is  begging  the  questicn.  But  if  you  were  to  take  a 
man  out  of  a  machine  shop  and  put  him  down  in  the  engine  room 
could  he  run  that  ship  economically  and  safely  for  the  company? 

Capt.  BLAI^E.  It  has  been  demonstrated  that  he  can,  sir. 

Mr.  Curry.  Where  has  it  been  demonstrated,  I  would  like  to  know  ? 

Capt.  Blaine.  In  the  foreign  vessels. 

Mr.  Curry.  I  would  like  to  know  some  foreign  vessel.  It  takes  a 
man  from  10  to  15  j^ears  to  work  up  to  chief  engineer  in  this  country 
They  go  in  there  and  work  up  from  a  small  pay  into  the  business. 
A  man  has  to  have  a  pretty  good  education  before  he  can  pass  the 
examination,  and  has  to  understand  algebra  and  mathematics. 

Capt.  Blaine.  No,  sir. 

Mr.  Curry.  Yes,  he  does. 

Capt.  Blaine.  I  have  been  a  mate. 

Mr.  Curry.  Before  you  get  to  be  chief  engineer  you  have  got  to 
understand  how  to  figure  out  everything  in  the  boiler  and  every- 
thing in  the  engine  room  and,  and  the  engineer  has  to  know  how  to 
handle  coal  and  he  has  to  know  how  to  handle  oil  and  how  to  use  it. 
And  you  take  a  man  out  of  a  machine  shop  and  put  him  in  front 
of  an  engine  and  how  much  coal  will  he  waste  and  how  much  oil 
will  he  waste,  and  do  you  think  it  Avould  be  as  safe  for  the  owner 
of  the  property  to  have  an  unskilled  man  there  as  it  would  be  to 
have  a  man  of  skill?  I  should  think  an  owner  taking  a  man  out  of  a 
machine  shop  and  putting  him  in  an  engine  room  would  be.  playing 
hookey  from  an  insane  asylum. 

Capt.  Blaine.  The  man  out  of  the  machine  shop  is  more  than  a 
mechanic;  he  has  been  on  ships  time  and  time  again  in  the  course 
of  training.  That  is  what  you  Avould  have  to  do  if  you  put  us  on 
a  par  with  Great  Britain. 

Mr.  Curry.  You  are  taking  a  man  from  the  machine  shop  that 
is  a  trained  engineer  on  the  ocean.    That  is  not  what  3'ou  said. 

Capt.  Blaise.  He  is  a  trained  marine  mechanic. 

Mr.  EoDENBERG.  Capt.  Blaine  does  not  say  this  mechanic  shall  take 
full  charge;  he  says  there  ought  to  be  two  certificated  engineers  on 
board  ship. 

Mr.  Curry.  I  think  he  was  unfortunate  in  not  saying  exactly  what 
he  meant. 

Mr.  Hardy.  I  would  just  like  to  refer  Capt.  Blaine  to  pages  172 
and  170  in  this  law  which  gives  our  measurements  precisely  the  same 
as  that  of  Great  Britain,  with  two  differences — Great  Britain  in- 
cludes the  deck  load  space  and  we  do  not  in  the  certificate  of  tonnage. 


SHIPPING  BOARD,  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      607 

and  Great  Britain  deducts  120  feet  only  on  old  vessels  and  we 
deduct  72  cubic  feet  of  crew  space,  that  being  on  account  of  the  fact 
that  no  more  than  72  cubic  feet  of  space  is  allowed  for  crew  space 
in  our  law,  while  120  feet  is  allowed  in  Great  Britain. 

The  Chairman.  That  is  a  discrimination  in  our  favor. 

Mr.  Hardy.  That  gives  us  a  little  more  tonnage  and  a  little  less 
crew^  space,  and  their  law  gives  a  little  less  tonnage  and  a  little  more 
crew  space,  but  we  deduct  more  for  the  deck  load. 

(The  bill  offered  by  Capt.  Blaine  is  as  follows:) 

[Proposed  bill  for  repjulatiriK  and  administering  the  functions  now  performed  by  the 
steamboat-inspection  service  and  tlie  bureau  of  navigation,  and  for  the  promotion  of 
commerce  and  safety  of  life  at  sea.] 

Be  it  enacted  hij  the  Senate  and  House  of  Representatives  of  the  United 
States  of  America  in  Congress  assembled,  That  a  commission  is  hereby  created 
and  estahiished,  to  be  known  as  the  Merchant  INIarine  Service  Cmmnission, 
which  sliall  be  composed  of  five  conunissioners,  who  shall  be  appointed  by  the 
President,  by  and  with  the  advice  and  con.'-ent  of  the  Senate. 

At  least  one  menil)er  of  the  conmiission  shall  be  appointed  from  the  Atlantic 
seaboard  States,  at  least  one  from  the  Pacific  seaboard  States,  at  least  one  from 
the  States  borderinir  on  the  (ireat  Lakes,  at  least  one  from  an  inland  port,  and 
at  least  one  from  the  States  borderin;;;  on  the  Gulf  of  INIexico.  Not  more  than 
three  of  the  commit^sioners  shall  be  appointed  from  the  same  political  party. 

Said  commissioners  shall  not  be  actively  engaged  in  any  other  business, 
vocation,  or  employment  during  their  tenure  of  ofhce. 

The  commissioners  lirst  appointed  by  this  Act  shall  continue  in  office  for 
the  terms  of  three,  four,  five,  six,  and  seven  years,  respectively,  from  the  first 
day  of  .June,  1916.  the  term  of  each  to  be  designated  by  the  President.  Their 
successoi-s  Shall  be  appointed  for  terms  of  six  years,  except  that  any  person 
to  fill  a  vacancy  sliall  be  appointed  only  for  the  unexpired  term  of  the  com^ 
missioner   whom   he  shall   succeed. 

The  <-(immissinner  first  api)()inred  for  the  term  of  three  years,  and  thereafter 
his  successor,  shall  have  had  practical  experience  at  sea  within  the  last  ten 
years  for  a  period  of  a  year  or  more  as  a  licensed  shiiimaster  of  an  ocean- 
going steam  passenger  and  freight  vessel.  The  commissioner  first  apiiointed 
for  the  term  of  four  years,  and  thereafter  his  successor,  shall  have  had  ex- 
perience in  the  practical  oi^eratiou  of  shipping,  anil  shall  have  been  employed 
Vv-ithin  the  last  ten  years  for  a  period  of  a  year  or  more  in  the  capacity  of 
superintendent  or  manager  of  a  firm,  or  firms,  engaged  in  the  ocean  carrying 
trade,  with  a  fleet  of  more  than  three  ocean  vessels.  The  commissioner  first 
appointed  for  the  term  of  five  yeai's,  and  thereafter  his  successor,  shall  be 
an  experienced  marine  engineer  and  shall  have  had  within  the  last  ten  years 
at  least  one  year's  experience  as  chief  engineer  of  an  ocean-goig  passenger  and 
freight  vessel.  The  commissioner  first  appointed  for  the  term  of  six  years, 
and  thereafter  his  successor,  shall  be  a  naval  architect,  who  shall  also  be 
experienced  in  marine  engineering  and  shall  have  been  so  employed  within  tne 
last  ten  years  for  a  period  of  at  least  three  years  in  a  recognizeil  shipbuilding 
plant.  The  commissioner  first  appointed  for  the  term  of  seven  years,  and 
thereafter  his  successor,  shall  be  learned  in  the  maritime  law  and  sliall  be  the 
chairman  of  the  commission. 

Any  commissioner  may  be  removed  by  the  President  for  inefficiency,  neglect 
of  duty,  or  malfeasance  in  office. 

No  vacancy  in  the  commission  shall  impair  the  right  of  the  i*emaining  com- 
missioners to  exercise  the  right  of  all  of  the  powers  of  the  commission. 

During  a  vacancy  of  chairman  the  remaining  commissioners  may  select  one 
of  their  number  to  act  as  chairman  iiro  tempore  until  a  new  comnnssioner  to 
act  as  chairman  shall  be  appointed  and  qualified.  Three  members  of  the  com- 
nnssion  shall  constitute  a  quorum,  and  the  majority  vote  of  all  the  commis^ 
sioners  then  qualified  to  act  shall  control. 

The  commission  shall  have  a  seal  which  shall  be  judicially  noticed. 

Either  of  the  members  of  the  commission  may  administer  oaths  and  affirma- 
tions and  sign  subpoenas. 

For  the  purposes  of  this  act  the  commission  shall  have  power  to  require,  by 
subpcpna,  the  attendance  and  testimony  of  witnesses,  and  the  production  of  all 


608      S1£1PPJX(;  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

books,  papers,  and  docuiiieiit.s,  relating  to  any  matter  under  investij^-itiou,  at  any 
designated  place  of  hearing,  and  may  invoke  tlie  aid  of  any  court  of  the  LTnited 
States  in  requiring  the  attendance  and  testimony  of  witnesses,  and  the  produo- 
Hon  of  books,  papers,  and  documents,  and  any  failure  to  oliey  the  order  of  the 
I'ourt  may  be  punished  by  such  court  as  contempt  thereof. 

That  said  commission  shall  formulate  and  prescribe  rules  and  regulations 
governing  the  construction,  gross  and  net  tomiage  measurement,  shipping  of 
crews,  equipment,  inspection,  licensing,  enrollment  and  registry,  operation  and 
navigation  of  vessels  of  the  United  States  of  whatever  class,  kind,  size,  or 
motive  power. 

The  commission  shall  take  over  the  functions  of  the  Steamboat-Inspection 
•Service  and  the  Bureau  of  Navigation,  fdl  all  vacancies  that  may  occur  in  said 
services,  and  review  all  questions  passed  on  by  the  local  or  supervising  in- 
spectors, when  an  appeal  is  taken  to  the  commission  by  the  parties  in  interest ; 
the  commission  shall  also  formulate  rules  for  fixing  the  freeboard  of  all  vessels 
of  the  United  States,  under  load  conditions,  for  suumier  and  winter  service, 
with  modifications  to  lueet  the  requirements  of  different  trades,  and  for  freight 
and  passenger  service,  and  in  connection  with  freeboard  the  question  of  adequate 
transverse  and  other  subdivision ;  the  stability  curves  of  all  ships  carrying 
passengers  shall  also  be  examined  by  the  conuuission ;  said  commission  shall 
administer  the  laws  governing  the  licensing  and  the  rights  and  duties  of  all 
officers  of  vessels  of  the  United  States  and  shall  administer  the  laws  governing 
the  rights  and  duties  and  qualifications  of  seamen,  and  shall  formulate  and 
prescribe  rules  and  regulations  governing  the  shipping  and  water-borne  com- 
merce of  the  United  States,  which  rules  and  regulations  shall  become  effective 
whenever  promulgated  by  the  President  by  proclamation  thereof;  such  rules 
and  regulations  may  be  repealed,  changed,  modified,  or  amended  by  the  com- 
mission or  l)y  promulgating  act  of  the  President,  and  all  acts  of  law  inconsistent 
with  or  incompatible  with  the  authority  hereby  given  said  commission  are 
repealed  by  this  act. 

The  commission  shall  make  careful  comparison  between  the  navigation  laws 
of  the  United  States  and  other  maritime  countries  to  ascertain  if,  as  regards 
statutory  regulations,  American  shipping  carries  any  burdens  that  the  shipping 
of  other  nations  are  free  from,  and  also  to  determine  the  difference  in  the  cost 
of  construction  of  vessels  in  the  United  States  and  the  cost  of  construction  of 
vessels  in  other  nuiritime  countries,  and  if  it  is  found  that  American  shipping 
does  carry  burdens  that  other  nations  are  free  from  the  conmiission  is  hereby 
given  the  power,  and  it  is  the  intent  of  this  act  that  the  commission  shall  take 
the  necessary  steps,  to  I'emove  siich  burdens  from  American  shipping. 

That  the  salaries  of  the  commissioners  shall  be  $10,000  per  annum  for  each 
i'onmiissioner,  payable  in  the  same  manner  as  the  judges  of  the  courts  of  the 
United  States. 

That  the  conmiission  is  authorized  and  emiiowered  to  appoint  a  secretary,  to 
serve  at  the  pleasure  of  the  commission,  at  a  salary  of  $5,000  per  annum,  and  to 
engage  such  other  employees  and  assistants  as  it  may  deem  advisable,  whose 
to'ms  of  employment  of  service  shall  be  at  the  pleasure  of  the  commission  and 
whose  salaries  or  wages  or  compensation  shall  be  fixed  by  the  commission,  with 
the  approval  of  the  President. 

Until  otherwise  provided  by  law,  the  commission  may  hire  suitable  offices  for 
its  use  and  shall  have  authority  to  procure  all  necessary  office  supplies. 

Witnesses  suiumoned  before  the  conuuission  shall  be  paid  the  same  fee  and 
Hiileage  that  are  paid  witnesses  in  the  courts  of  the  United  States. 

All  of  the  expenses  of  the  commission,  including  all  necessary  expenses  for 
transportation  incurred  by  the  commissioners  or  by  their  employees  under  their 
orders,  in  making  any  investigation  or  upon  official  business  in  any  other  places 
than  the  city  of  Washington,  shall  be  allowed  and  paid  upon  the  presentation 
dt  itemized  vouchers  therefor  approved  by  the  chairman  of  the  commission. 

On  or  before  the  first  day  of  December  in  each  year  the  commission  shall 
make  a  report  to  Congress,  which  report  shall  also  contain  its  findings  and 
recommendations. 

That  the  conmiission  shall  have  full  power  and  authority  to  do  all  acts  and 
to  incur  all  obligations  necessary  to  the  carrying  into  effect  of  the  letter  and 
spirit  of  this  act,  and  all  laws  to  the  contrary  are  hereby  repealed,  and  the 
bureaus  now  known  as  the  Steamboat-Inspection  Service  and  the  Bureau  of 
Navigation  are  abolished  as  such  with  the  appointment  of  the  commissioners 
named,  who  shall  perform  the  functions  of  said  bureaus  and  who  shall  take 
over  all  funds  appropriated  for  said  bureaus  and,  through  consolidation  of  the 
functions  of  those  bureaus,  administer  the  same. 


SHIPPING  BOARD^  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE.         609 

AFTER    RECESS. 

The  committee  reconvened  pursuant  to  the  taking  of  the  recess. 

STATEMENT  OF  MR.  BERNARD  N.  BAKER,  905  CALVERT 
BUILDING,  BALTIMORE,  MD. 

Mr.  Baker.  I  believe  you  gentlemen  have  before  you  one  of  tlie 
most  important,  not  only  national,  but  international,  questions  to 
consider  that  has  ever  ccme  before  Congress,  and  that  you  will  give 
it  that  wise,  prudent,  careful  thought  and  ctmsideration  in  reaching 
your  conclusions  which  I  know  you  are  able  to  do,  entirely  inde- 
pendent of  what  may  be  for  the  personal,  political,  or  individual 
interest  of  anyone,  but  only  for  the  best  interest  of  our  whole 
country.  You  can  bring  to  pass  what  is  more  important,  in  my 
opinion,  than  any  question  to-day  under  consideration,  and  that  is 
the  possibility  of  a  federation  of  the  nations  of  the  world  (particu- 
larly on  account  of  the  disastrous  war  now  raging  in  Europe)  a 
means  of  insuring  the  future  peace  of  the  world,  through  the  plac- 
ing of  our  own  country  in  the  position  it  alwa\^s  should  occupy  in 
the  control  of  its  own  water-borne  foreign  commerce,  under  its  own 
flag,  and  this  would  necessarily  be  followed  by  the  development  of 
a  powerful  and  efficient  naval  force  and  equipment,  all  of  which  is 
closely  and  intimately  interrelated  with  the  merchant  marine.  In 
this  the  board  you  propose  to  form  could  be  the  means  of  bringing 
about  relations  with  foreign  countries  in  the  control  of  the  commerce 
of  the  world  a  power  that  could  isolate  any  proposing  belligerent 
nations  and  force  them  to  go  to  a  court  of  arbitral  justice;  and  fur- 
ther than  this,  you  could  make  effective  the  decrees  of  such  a  court, 
because  it  is  the  only  way  that  power  could  be  given  to  such  a  court 
of  enforcing  its  decrees. 

For  more  than  30  years — and  my  recollection  is  that  I  came  be- 
fore a  committee  of  Congress  first  some  35  years  ago — I  was  actively 
interested  in  the  steamship  business  and  always  owned  a  controlling 
interest  in  the  company  of  which  I  had  the  honor  to  be  the  presi- 
dent, so  was  absolutely  free  to  carry  out  m}-  own  policies. 

Being  an  American,  and,  I  hope,  a  Wal  one,  I  always  tried  to  be 
loyal  to  my  company;  to  put  our  ship  under  the  American  flag  was 
impossible.  We  could  not  operate  them  as  economically.  We  could 
not  find  the  men  to  man  them;  it  was  impossible.  I  think  the  first 
ship  we  built  was  in  1880,  the  steamship  Maryland.  For  years  we 
paid  large  dividends.  We  were  able  during  the  long  continuance  of 
that  companj^  to  be  of  some  assistance  in  the  development  of  our 
commerce. 

The  Chairman.  What  was  your  company? 

Mr   Baker.  The  Atlantic  Transport  Co.  (Ltd.). 

The  Chairjman.  Where  was  this  ship  built? 

Mr.  Baker.  That  ship  was  built  by  William  Gray  &  Co.,  of  West 
Hartlepool,  England. 

Mr.  RoAVE.  Under  what  flag  were  j'^ou  running? 

Mr.  Baker.  Under  the  British  flag.  Many  times  I  was  before  the 
different  committees  here  and  the  committees  of  Parliament  in  Eng- 
land, and  many  questions  came  up.     One  of  the  important  questions 


610      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

that  came  up  away  back  in  the  eighties  was  the  right  of  an  American 
to  own  a  ship  under  the  British  flag.  Their  custom,  until  a  recent 
laAv  was  passed  proliibiting  an  American  under  any  circumstances 
from  owning  a  share  of  stock  in  the  Cunard  Co.,  had  been  to  allow 
a  vessel  freedom  of  ownership.  If  I  remember  rightly,  a  bill  was 
introduced  by  Thomas  Wilson,  of  Hull,  encouraged  by  T^ord  Fiir- 
ness,  to  prohibit  the  ownership  of  ships  under  the  British  flag  by  any 
other  nationality  than  English,  but  fortunately  we  w^ere  able  to  pre- 
vent the  passage  of  this  measure.  The  only  condition,  then,  of  the 
ownership  of  a  vessel  under  the  British  flag  it  was  necessarj-  to  have 
what  is  known  as  a  ship's  husband,  a  resident  of  England  and  under 
the  jurisdiction  of  their  laws.  He  is  compelled  to  register  a  record 
of  his  ow^nership  at  what  is  know^n  as  Somerset  House,  somewhat 
similar  to  our  customhouse.  The  English  Government,  recogniz- 
ing the  advantage  of  the  class  of  ships  we  w^ere  building,  of  service 
to  them,  were  willing  to  grant  us  what  is  known  as  an  admiralty  sub- 
vention, provided  we  would  give  certain  strengthening  to  the  ships 
in  construction  so  as  to  enable  them  to  carry  guns,  if  necessary, 
and  also  maintaining  certain  between-deck  spaces  to  enable  them  to 
use  them  as  transports  in  the  carrying  of  troops,  and  especially 
cavalry,  with  certain  between-deck  spaces  that  could  be  used  for  the 
carriage  of  horses. 

In  addition  to  this  the  best  assistance  given  was  in  their  system  of  a 
training  of  a  naval  reserve  and  the  giving  to  officers  and  men  on  our 
ships  a  right  to  join  the  naval  reserve  of  Enghind,  with  certain  fixed 
allowances  per  month.  Embodied  in  this  bill  is  a  somewhat  similar 
provision  to  that  of  England,  which  is  most  valuable  and  will  result 
in  training  many  of  the  young  men  now  seeking  employment  in  our 
overcrowded  cities  as  a  naval  reserve,  giving  them  wonderful  o])por- 
tunities  for  development  in  all  the  science  of  navigation,  electricity, 
und  efficient  engineers,  and  everything  connected  with  the  present 
ojjeration  of  a  modern  steamship,  besides  giving  them  a  broad  view 
of  life  by  the  opportunities  of  seeing  the  world:  and  also  give  to  our 
country  a  navy  reserve  in  time  of  need,  a  large  bodv  of  trained  men 
in  constant  employment  that  will  be  loyal  Americans  in  case  of  need 
for  our  Navy.  I  regard  this  as  one  of  the  most  valuable  features  of 
the  present  bill. 

Now  this  country  to-day  practically  has  no  merchant  marine — 
little  or  none.  We  won't  go  into  that.  I  could  tell  you  gentlemen 
all  about  it,  but  it  would  tire  you;  it  has  been  my  study  for  40  years. 
We  have  no  merchant  marine.  If  we  make  a  beginning  of  some 
kind,  which  I  have  tried  to  impress  upon  each  session  of  Congre.-s. 
it  seems  to  me  that  it  might  develop  into  the  most  important  interest 
of  our  country,  not  only  in  the  development  of  commerce,  in  which 
there  have  come  to  us  the  greatest  opportunities  of  any  nation  in 
the  world,  but  also  providing  an  auxiliary  for  our  Navy.  Gentlemen, 
other  countries  are  waiting  for  us.  I  could  bring  you  up  case  after 
case,  and  one  particularly  in  regard  to  the  Argentine  Republic  to-day. 
The  English  people,  prior  to  this  war  were  preparing  to  come  to  the 
United  States,  and  actually  had  gotten  a  refusal  on  500.000  acres  of 
coal  land  in  the  Virginia  and  West  Virginia  coal  fields,  and  it  was 
all  tied  up  with  options  of  the  property,  and  they  had  planned  to 
build  the  ships  and  had  made  their  arrangements  with  the  Argentine 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      611 

Government  to  furnish  their  coal  supply,  because  the  United  States 
to-day  in  their  coal  development  can  furnish  coal  to  Argentina  at 
less  than  England  will  ever  be  able  to  do  again,  brought  about  purely 
by  natural  conditions,  in  the  difference  in  the  depths  of  their  pits 
and  cost  of  mining.  All  the  ships  were  designed,  and  even  the  plans 
of  all  the  ships  and  the  cost  of  operations  Avorked  out  by  one  of  the 
largest  firms  in  England,  Sir  Whitworth  Armstrong  Co.,  and  the 
Cambria  Coal  Combine,  which  controls  nearly  all  the  coal  sent  to 
Argentina.  Now,  I  can  go  into  all  the  details,  but  it  would  take 
too  much  time. 

Conditions  exist  to-day  that  we  could  deliver,  and  make  a  very 
handsome  profit,  to  the  Argentine  Republic  their  entire  coal  supply 
and  save  to  the  industries  of  that  country  over  $5,000,000  a  .year,  and 
we  are  perfectly  powerless  to  do  it.  From  a  talk  with  Ambassador 
Naon,  I  am  sure  they  would  cooperate  with  us.  And  only  to-day, 
coming  down  on  the  train  from  Baltimore,  I  read  in  the  New  York 
Times  an  article  from  London,  by  s])ecial  cable,  entitled,  "  Fears  coal 
competition."     Shall  I  read  it  to  you,  it  is  short? 

The  Chairman.  Read  it  into  the  record. 

Mr.  Baker.  It  is  just  the  exact  condition  which  I  remember  existed 
many  years  ago.  At  a  very  interesting  dinner  given  to  me  by  Mr. 
Knowles.  the  editor  of  the  Nineteenth  Century,  Lord  Landsdowne 
was  present.  He  said,  "jNIr.  Baker,  your  country  has  the  greatest 
future  before  it  of  any  nation  in  the  world,  in  the  (luestion  of  coal 
alone,  to  supply  the  sources  of  jjower."  In  addition  to  this  we  have 
control  of  a  large  per  cent  of  the  total  oil  and  water  power.  Of 
course,  all  of  our  electrical  development  of  power  to-day  is  more  or 
less  local,  but  verv  valuable. 

Mr.  Edmonds.  IFTow  many  tons  of  coal  does  Argentina  use? 

Mr.  Baker.  If  I  remember  rightl}',  it  was  about  5,000.000  tons  a 
year,  almost  entirely  from  England.  I  will  just  read  this  article-^ 
but,  first,  Lord  Lansdownc  stated  further,  at  that  dinner — ^I  remem- 
ber it  very  Avell — "  that  every  da.y  they  must  remember  coal  was  cost- 
ing them  a  little  bit  more  and  every  day  in  the  United  States  coal  is 
costing  to  produce  a  little  bit  less;  that  they  were  going  deeper  and 
deeper  with  their  pits,  and  this  will  undoubtedly  bring  about  new 
economic  conditions  which  will  place  your  country  in  advance  of 
every  nation  in  the  world." 

FEARS     COAL     COMPETITION — COSTS     LKSS     TO     MINE     HERE    THAN     IN     BRITAIN,     LORD 

RHONDDA   SAYS. 
[Special  cable  to  The  New  York  Times.] 

London,  Tuesday,  February  29. 

Lord  ItlioiKklii.  who  is  better  known  in  the  United  States  as  D.  H.  Thomas, 
the  Welsh  ccml  king,  made  some  notable  references  to  the  subject  of  American 
coal  comiietition  in  the  course  of  a  speech  in  Loudon  this  afternoon.  He  said 
that  when  the  Allies  had  secured  victory,  as  most  assuredly  they  would,  it  would 
be  the  competition  of  the  United  States,  and  not  of  Germany,  which  would  be 
likely  to  prove  most  keen. 

Indeed,  they  had  much  more  to  learn  from  Americans  than  from  Germany, 
and  bearing  in  mind  that  coal  was  the  chief  source  of  manufacturing  power  in 
the  United  States,  just  as  it  was  here,  he  viewed  with  some  anxiety  the  greatly 
improved  position  occupied  by  America  to-day  in  this  respect  relatively  to  our 
own. 


612      SHIPPING  BOABD^  NAVAL  AUXILIARY.  AND  MEECHAInT  IvIaKINP:. 


A  generation  ago  the  cost  of  coal  production  in  the  United  States  was  higher 
than  here,  but  to-day  the  position  was  completely  reversed.  The  cost  of  pro- 
ducing a  ton  of  riin-of-the-mine  Pocahontas  coal,  as  used  by  the  American  Navy, 
a  coal  very  similar  in  chemical  analysis  to  our  Welsh  Admiralty  coal,  and  put- 
ting it  into  the  car  at  the  mine,  was  less  than  one-third  of  the  cost  to-day  of 
producing  a  ton  of  unscreened  Welsh  coal  of  Admiralty  quality. 

The  English  Admiralty  have  a  very  high  standard  for  their  coal, 
you  knoAv,  and  it  is  carefully  analyzed. 

The  output  per  mau  in  the  bituminous  coal  fields  of  America  was  consider- 
ably more  than  three  times  the  output  per  man  in  Wales. 

And  the  American  miner  will  mine  twice  as  much  coal,  and  tliey 
ahvays  put  them  on  a  ton  basis,  as  your  man  in  Wales,  on  account 
of  the  difficulty  in  mining  there  and  the  depth  of  the  pits.  They 
always  call  them  "  pits  ";  they  never  call  them  mines. 

This  was  due  mainly  to  easier  mining  conditions,  but  there  could  be  no  ques- 
tion that  the  men  worked  with  more  energy  in  most  industries  in  the  United 
States  and  Canada  than  they  did  in  this  country. 

The  reason  w^liy — and  it  is  only  one  out  of  a  great  many  examples 
I  could  bring  up — I  brought  up  this  question  is  to  go  into  the  con- 
sideration of  this  pfcrticular  bill  No.  10500,  and  I  regard  the  most 
important  suggestion  or  recommendation  in  that  bill  the  appointment 
of  a  commission. 

The  Chairman.  The  shipping  board. 

Mr.  Baker.  The  appointment  of  a  shipping  board.  You  speak  of 
commissioners  there,  I  think.  Judge.  With  regard  to  this,  this  is 
the  real  keynote  of  the  whole  question.  All  depends  upon  this.  And, 
after  all,  gentlemen,  you  always  must  trust  somebody;  we  have  to 
put  large  interests  in  the  hands  of  able,  broad-minded  men.  Every- 
thing, even  the  Government  of  the  United  States,  could  not  be  carried 
on  to-day  if  there  was  not  that  confidence  put  in  you  gentlemen  in  the 
Senate  and  the  House.  You  are  making  a  study  of  it.  and  you  are 
sending  and  getting  whereAer  you  can  the  men  who  are  best  informed 
and  the  least  likely  to  be  biased,  as  well  as  those  who  have  direct 
personal  interests,  and  are  asking  them  to  help  you.  There  are  lots 
of  men  in  the  United  States  who  would  be  only  too  glad  to  help  you 
to  the  best  of  their  ability.  But  it  is  difficult,  very  difficult,  to  get 
men  wdio  have  practical  knowledge  of  over-sea  transportation  who 
are  not  either  directly  or  indirectly  interested  in  some  particular  line. 
When  I  say  that  I  mean  we  only  have  in  the  North  Atlantic  here, 
engaged  in  competiti^'e  over-seas  traffic,  four  ships  that  I  know  of — 
the  American  Line  ships.  They  are  old  and  obsolete.  Our  company 
would  never  own  a  ship  after  it  was  20  years  old.  In  one  day  I  sold 
7  vessels  to  what  is  known  as  the  Italian  boneyard,  simply  to  be 
broken  up  and  used  as  iron  in  Italy,  because  Italy  produces  no  iron, 
just  on  account  of  their  age.  The  improvement  in  construction  and 
economical  methods  adapted  to  navigation  and  the  economical  work- 
ing of  a  ship  change  so  rapidly  that  after  20  years  a  ship  is  obsolete 
as  a  money  earner. 

Now^,  those  four  American  ships  are  represented  by  what  I  consider 
one  of  the  finest  young  men  in  the  United  States — Mr.  P.  A.  S.  Frank- 
lin, who  came  to  my  office  when  a  boy,  I  think,  of  17 — and  was  with  me 
for  many  years,  and  to-day  he  has  made  a  wonderful  success  undermost 
trying  circumstances  in  the  management  of  the  International  Mercan- 
tile Marine.    More  than  80  per  cent  of  their  tonnage  is  under  the  British 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      613 

flag,  and  it  has  a  British  president.  Our  own  American  company  to- 
day, due  to  the  conditions  before  the  war,  unfortunately  is  in  the  hands 
of  a  receiver,  but  it  is  still  a  very  valuable  property,  and  since  the  war 
has  developed  tremendous  earnings.  Now,  he  is  an  American,  a 
loyal  American,  and  one  of  the  finest  men  I  know  of,  and  could  give 
you  better  advice  than  anybody  else  I  know'  of,  but  his  interests  must 
be  with  England.  And  there  is  the  difficulty  of  getting  men  of  that 
kind  wdio  have  the  practical  knowledge  in  the  United  States  who  are 
not  connected  with  these  foreign  interests.  And  wdiile  they  will  give 
you  an  answer  to  all  the  questions  you  ask,  and  the  best  advice  of 
which  they  are  capable,  it  is  human  nature  to  look  out  for  one's  self. 
And  you  can  not  blame  any  man  for  doing  that;  it  is  simply  human 
nature. 

What  I  fear  more  in  the  bill,  while  I  am  on  that  question  of  the 
commissioners  or  the  board,  is  how  you  are  going  to  get  men  of  that 
breadth  of  view  and  experience  to  handle  a  question  of  this  kind. 
You  found  them,  gentlemen,  in  your  wonderful  work  on  the  Federal 
Keserve  Board.  I  can  remember  very  Avell,  I  was  president  of  the 
Baltimore  Trust  Co.  at  that  time,  when  we  had  a  meeting  of  the 
bankers'  association  (I  think  it  was  in  Boston),  where  every  sug- 
gestion contained  in  the  present  Federal  reserve  act  was,  I  think, 
almost  unanimousl}'  condemned.  In  another  convention,  held  some- 
time after  the  passage  of  that  bill  in  St.  Louis,  nearly  every  pro- 
vision in  that  act  was  approved.  Now,  if  you  can  only  get  the  men, 
it  is  one  of  the  greatest  difficulties  you  are  going  to  have.  You  have 
provided  here  for  the  President  to  select.  The}^  are  subject  to  con- 
firmation by  the  Senate,  which  surrounds  it  with  every  possible  safe- 
guard, I  think,  Avhich  could  suggest  itself.  I  do  not  know  of  any 
other.  But  there  is  going  to  be  the  very  greatest  difficulty.  I  believe 
there  are  patriotic,  loyal  Americans,  like  Mr,  Paul  Warburg,  who 
gave  up  a  most  important  interest  to  go  on  the  Federal  Reserve 
Board,  and  man}^  of  the  others.  Yon  want  men,  each  one  of  them 
to  go  on  a  commission  of  this  kind,  not  for  any  particular  individual 
interest,  but  to  develop  the  best  interests  of  the  country  in  the  de- 
velopment of  commerce  and  in  the  building  of  what  we  certainly 
ought  to  have,  a  merchant  marine. 

The  next  question — I  am  only  going  to  touch  on  it — has  been  the 
question  of  Government  operation.  Gentlemen,  just  make  up  your 
minds  that  there  is  not  going  to  be  any  Government  operation  if 
those  three  commissioners  manage  it  right.  As  far  as  I  am  concerned, 
I  would  be  just  as  well  satisfied  if  you  would  leave  that  out  of  the 
I'ill.  But  I  am  going  to  call  your  attention  to  one  case  Avhich  has 
come  to  me  where  it  might  be  very  desirable  and  the  Government 
might  do  more  to  start  a  steamship  service  than  could  possibly  any 
private  individual  interest.  When  this  very  question  of  the  Argen- 
tina coal  supply  Avas  brought  up  there  was  in  England  a  combination 
known  as  the  Cambria  Coal  Combine— and  I  have  somewdiere  among 
my  papers  the  names  of  the  men  constituting  the  combine.  For 
years  they  have  controlled  all  the  coal  business  of  the  Argentine. 
They  were  the  men  who  came  over  here  and  found  this  condition 
existing,  wdiere  it  was  not  a  theory  but  a  fact  that  you  can  load  coal 
at  the  Virginia  Capes  or  in  Baltimore,  Md.,  and  deliver  it  down  in 
Argentina  and  bring  j^our  ships  back  in  ballast  at  much  less 
than  the  cost  from  England,     Our  difficulty  in  the  Argentine    has 


614     SHIPPING  BOARD,  NAVAL  AUXILIAKY,  AND  MERCHANT  MARINE. 

been  a  return  cargo;  England  has  had  a  return  cargo.  The  Argen- 
tine is  supplying  the  same  class  of  merchandise  to  England  \Yhich 
Ave  are  sending  from  the  United  States.  Consequently  we  operate 
with  a  steamship  company  only  a  one-legged  trade.  They  figured 
it  very  carefully  that  they  could  bring  those  ships  back  in  ballast. 
But  the  most  important  part  of  it,  it  was  provided  that  those  ships 
vrere  to  be  built  and  facilities  provided  at  each  end  for  the  rapid 
discharging  and  loading,  or  loading  and  unloading.  We  have  all 
the  facilities  for  loading  at  the  rate  of  5,000  tons  a  day,  and  even 
more,  and  they  were  to  provide  the  facilities  for  unloading  in  the 
Argentines  Avhere  the  entire  success  of  the  matter  at  that  time  would 
depend  upon  the  Argentine  Government  giving  them  the  control 
of  dock  facilities  and  to  provide  new  additional  facilities.  And  it 
went  so  far  that  in  the  Argentine  Legislature  a  bill  Avas  introduced 
providing  for  an  appropriation,  as  I  remember  it,  of  a  large  bond 
issue  to  provide  those  facilities.  These  ships  were  to  be  15.000  tons 
each;  they  Avere  to  unload  5,000  tons  a  day.  That  means  they  must 
keep  on  the  docks  in  Argentine  at  least  150,000  tons  of  coal. 

Mr.  Loud.  They  can  unload  that  on  the  Lakes  in  less  than  one  day  ? 

Mr,  Baker.  I  knoAv  they  can,  and  that  is  all  fine ;  but  on  the  Lakes 
thcA'  put  it  right  in  the  cars.  But  in  addition  to  that  you  have  to 
haA-e  facilities  to  store  this  coal  and  to  make  distribution  of  it  all 
oA'er  the  Argentine. 

Mr.  Loud.  And  it  is  the  same  way  Avith  the  ore. 

Mr.  Baker.  Yes;  but  the  coal  does  not  move  so  rapidly. 

Mr.  Loud.  I  beg  your  pardon;  but  they  unloaded  one  cargo  of 
9,000  tons  in  four  hours. 

Mr.  Baker.  Then  I  have  been  A'ery  moderate  in  my  suggestion  of 
5,000  tons  a  day.  That  meant  the  expenditure  of  a  large  amount 
of  money  and  providing  facilities.  And  I  had  one  very  interesting 
talk  with  the  ambassador,  and  he  said  they  Avere  very  anxious  to  do 
it  because  it  would  saAe  the  industries  there  all  over  the  Republic, 
and  it  would  pay  them  to  do  it,  only  the  LTnited  States  could  make 
such  an  arrangement  by  the  Department  of  State. 

Mr.  Edmonds.  Your  tonnage  is  A^ery  large  for  Argentina.  I  think 
their  tonnage  is  about  2.500.000  tons. 

Mr.  Baker.    5.000.000. 

Mr.  Edmonds.  Their  entire  purchases  during  1914  from  all  OA-er 
the  world  Avere  only  3.421.526  tons.  I  haAe  the  figures  here,  and  in 
1915,  it  was  2.071,162  tons  for  nine  months. 

Mr.  Baker.  In  all — railAvays  and  all? 

Mr.  Edimonds.  Yes.  Therefore  they  Avould  be  unable  to  save 
$5,000,000,  because  the  entire  purchases  in  1913  were  only  $25,000,000. 

Mr.  Baker.  My  recollection  is  the  ambassador  told  me  that. 

Mr.  Edmonds.  Yes. 

Mr.  Baker.  I  have  not  confirmed  those  figures,  and  they  are  sub- 
ject to  correction.    HoweA'er,  suppose  they  only  use  3.000.000. 

Mr.  ED]\roNDs.  It  is  a  A^ery  big  tonnage  anyway,  and  we  would  be 
very  glad  to  sell  it  to  them. 

Mr.  Baker.  Yes. 

Mr.  RoAA^E.  All  of  South  America  has  to  have  coal,  does  it  not? 

Mr.  Baker.  Nearly  all.  As  I  understand,  the  only  coal  in  South 
America  is  some  in  the  extreme  nortliAvestern  section  of  the  Ar- 
gentine, and  some  in  Peru,  which  is  inaccessible  by  rail  now.  and 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      615 

some  in  Columbia.  An  effort  was  made  there  at  one  time  to  develop 
them,  and  I  have  some  papers  about  that. 

Mr.  Edmonds.  It  is  not  very  good. 

Mr.  Baker.  No;  it  is  very  poor  quality.  But  this  3,000,000  tons 
is  ten  times  as  much  coal  as  we  can  move  to-day.  The  ships  designed 
for  this  were  oi"  a  class  particularly  desirable  as  naval  auxiliaries, 
and  arrangements  could  be  made  for  coaling  our  ships  at  sea, 
which  I  have  taken  up  with  the  Xavy,  and  they  say  it  is  most  de- 
sirable. And  I  believe  to-day  the  Argentine  Government  would 
make  this  expenditure  provided  the}^  had  the  assurance  of  getting  for 
all  time  a  regular  permanent  supply;  otherwise  they  would  not  be 
willing  to  do  it.  They  depend  now*  on  England,  and  most  of  their 
interests  there  are  financed  by  England.  And  one  of  the  companies 
looked  into,  either  the  Northwestern  Railway  or  the  Western,  was 
controlled  by  Scotch  engineers. 

There,  I  believe,  would  be  an  opportunity  for  our  Government, 
possibly,  to  bring  about  such  arrangements  that  would  be  totally 
impracticable  for  any  private  capital,  and  the  Argentine  Govern- 
ment would  make  arrangements  for  the  proper  facilities,  because  it 
would  be  to  their  interest  and  would  certainly  be  to  our  interests. 
Undoubtedly,  England  and  the  English  people  realize  they  are  not 
in  a  position  to  control  the  future  business.  I  understood,  in  the 
arrangement  in  financing  these  raihvays,  they  gave  the  preference 
for  coal  to  English  interests,  at  the  same  price;  but  we  could  deliver 
there,  even  bringing  the  ships  back  in  ballast,  Avith  a  one-legged 
trade,  cheaper  than  they  could  to-day. 

Now,  as  to  our  navigation  laws,  so  much  has  been  said,  and  so 
much  has  been  written 

Mr.  Curry.  Are  you  getting  off'  of  that  subject  now  ? 

Mr.  Baker.  Unless  you  wish  to  ask  me  some  questions. 

Mr.  Curry.  You  were  talking  about  taking  coal  from  the  United 
States  and  coming  back  in  ballast? 

Mr.  Baker.  Yes. 

Mr.  Curry.  Why  should  that  be  necessary  \  Why  not  take  coal  to 
Argentine  and  load  at  Argentine  for  Eui-ope,  and  then  take  a  load 
from  Europe  back  to  the  United  States? 

]\Ir.  Baker.  It  could  be  done,  undoubtedl}'',  but  I  am  taking  it 
under  the  worst  conditions  possible— of  no  cargo  existing  at  those 
ports  which  would  be  desirable. 

Mr.  Curky.  There  would  be  a  grain  cargo  to  Europe? 

Mr.  Baker.  Yes;  to  Europe. 

IMr.  Hardy.  That  was  the  very  question  I  wanted  to  ask — whether 
they  could  not  make  a  triangle,  going  from  here  to  the  Argentine 
with  coal,  and  from  the  Argentine  to  Europe  with  some  other  com- 
modity, and  back  from  Europe  to  tlie  United  States  with  imports 
from  Europe,  making  that  triangle? 

Mr.  Baker.  They  could. 

Mr.  Edmonds.  These  boats  could  not  be  fitted  as  refrigerator  boats, 
so  as  to  bring  meats  here,  could  they? 

Mr.  Baker.  They  could.  There  is  a  great  deal  of  meat  carried 
from  Australia  to  England  in  boats  of  the  same  speed. 

Mr.  Edmonds.   Could  the  coal  boats  be  fixed  so  as  to  carry  meat? 

A[r.  Baker.  Yes.  We  have  had  coal  boats  fitted;  but  you  could 
not  carry  a  full  cargo:  you  could  not  have  anything  more  than  a 


616      SHIPPING  BOABD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

comparatively  small  refrigerator  space.  But  when  you  take  out  of 
a  ship  of  15,000  tons  and  put  500  or  even  1,000  tons  of  refrigerated 
space  in  it.  it  Avould  not  reduce  very  much  your  cargo-carrying 
capacity. 

Mr,  Edmonds.  You  could  not  use  that  refrigerated  part  for  coal; 
3^ou  would  have  to  keep  that  separate  ? 

Mr.  Baker.  No;  you  could  not  use  the  refrigerated  part  for  coal. 
And,  generally,  for  refrigerated  beef  it  pays,  on  account  of  the  high 
value  of  the  product,  to  carry  it  in  a  faster  ship  than  in  a  12-knot 
ship. 

Mr.  Edmonds.  The  misfortune  of  that  triangular  trip  Mr.  Hardy 
was  speaking  of  is  this:  That  we  carry  coal  to  the  Argentine  and 
carry  grain  from  the  Argentine  to  Europe.  That  would  be  all  right, 
so  far.  But  coming  from  Europe  to  this  country  v.-e  vrould  have  to 
carry  manufactured  products.  That  is  just  exactly  what  we  are 
trying  to  get  away  from.  We  are  trying  to  send  manufactured 
products  out  and  not  to  bring  them  in. 

Mr.  Hardy.  Unless  we  are  going  to  import  something  into  this 
country  we  will  have  a  one-legged  trade  always. 

Mr.  Baker.  A  one-legged  trade  can  never  be  made  profitable,  Mr. 
Edmonds.  You  have  got  to  give  other  countries  a  fair  exchange  if 
you  expect  them  to  continue  to  buy  from  you.  If  you  do  not  you 
will  soon  exhaust  their  resources. 

Mr.  Edmonds.  We  have  practically  a  one-legged  trade  with  Brazil 
to-day. 

Mr.  Baker.  Yes;  I  am  coming  to  that. 

Mr.  Edmonds.  Because  the  English  boats  carry  them  the  numu- 
factured  goods  and  bring  coffee  and  rubber  up  here  and  then  take 
cargo  from  here  over  to  England,  to  that  it  is  a  one-legged  trade  to 
the  United  States. 

Mr.  Baker.  Yes;  but  a  profitable  trade  to  the  steamships. 

Mr.  Edmonds.  Yes,  a  profitable  trade  for  the  steamships. 

Mr.  Curry.  Are  these  boats  you  have  in  mind  one-deck  boats, 
single-deck  boats? 

Mr.  Baker.  Single-deck  boats. 

Mr.  Curry.  Would  a  boat  of  that  kind  be  useful  in  trade  from  j 

England  to  the  United  States  to  bring  manufactured  goods?  ^ 

•Mr.  Baker.  Not  very  much.     You  could  carry  so  much  in  those  '; 

ships,  such  large  amounts  of  cargo,  that  you  w^ould  never  get  them 
full.  ' 

Mr.  Hadley.  What  would  be  the  gross  tonnage? 

Mr.  Baker.  The  gross  tonnage  would  be  about  12.000  tons,  carry- 
ing about  15,000. 

Mr.  Loud.  Why  do  you  depart  from  the  ordinary  accepted  type 
of  the  auxiliary  collier  of  the  Navy,  carrying  l"2,50f3  tons  and  a  14- 
knot  speed? 

Mr.  Baker.  Only  at  a  less  speed  and  greater  carrying  capacity. 

Mr.  Loud.  Why  do  you  depart? 

Mr.  Baker.  Why  do  I  depart?  Because  it  was  all  worked  out  on 
those  conditions  at  that  time  for  English  interests. 

Mr.  Loud.  You  desire  auxiliaries  to  coal  the  steamships? 

Mr.  Baker.  I  agree  Avith  you  it  ought  to  be  done,  and  it  Avould  be 
done  under  the  terms  of  this  bill. 

Mr.  "RoAVE.  Can  they  be  operated  quite  as  economically? 


SHIPPING  BOARD,  XAVAI.  AUXILIARY,  AND  MERCHANT  MARINK.      617 

Mr.  Baker.  No. 

Mr.  RowE.  The  higher  the  speed  the  greater  the  cost  ? 

Mr.  Baker.  Very  much  greater,  and  the  ratio  is  very  great. 

Mr.  Loud.  The  important  question  to  my  mind  in  loading  and  un- 
loading with  the  same  type  of  boat  is  that  yon  can  provide  the 
facilities  for  loading  and  unloading  with  the  same  type  of  boat  very 
much  better  than  different  types  coming  to  the  dock. 

Mr.  Baker.  Undoubtedly.  And  there  you  are  coming  to  the  ques- 
tion that  it  would  only  pay  the  United  States  to  do  a  thing  of  that 
kind.  The  commercial  line,  going  into  it  simply  as  a  question  of 
profit,  would  want  the  most  economical  boat  practicable  in  per-ton 
carrying  capacity  that  it  could  get  in  propulsion,  and  it  would 
not  go  above  12  knots  to-day.  Although  possibly  there  might  be  a 
great  saving  in  oil  engines  in  ships.  The  internal  combustion  engine 
is  yet  more  or  less  an  experiment. 

Mr.  Hardy,  Mr.  Baker,  notwithstanding  my  friend  Edmond's  sug- 
gestion that  we  do  not  want  to  import  anything  from  Europe,  as  a 
matter  of  fact  I  want  to  know  if  those  ships  would  be  capable  of 
carrying  such  things  as  Ave  do  import  now  in  foreign  bottoms  from 
Europe  ? 

Mr.  Baker.  Yes.  The  lower  class  of  commodities;  we  would  get 
a  good  deal  of  them.  Merchandise  of  high  value,  probably,  Avould  be 
very  difficult  to  get,  except  at  a  reduced  rate,  as  against  the  regular 
lines.    However,  Judge  Hardy,  if  you  Avill  alloAv  me  to  go  on 

Mr.  Edmonds.  Will  you  say  what  lower  class  commodities  come 
from  Europe. 

Mr.  Baker.  Just  at  present  they  are  being 

Mr.  Edmonds.  I  mean  in  ordinary  times. 

Mr.  Baker.  Take  cement  and  glassware.  We  are  producing  most 
of  our  cement  now.  A  ver}''  large  article  of  export  was  china  and 
glassware  and  things  of  that  kind. 

Mr.  Hardy.  Pottery? 

Mr.  Baker.  Yes,  pottery. 

Mr.  Edmonds.  We  have  very  little  bulk  freight  now  ? 

Mr.  Baker.  Comparatively  little. 

Mr.  Edmonds.  I  mean  in  normal  times. 

Mr.  Baker.  Yes.  AVhat  are  going  to  be  the  conditions,  Mr.  Ed- 
monds, after  this  war  is  over — I  think  it  is  a  very  unwise  man  who 
would  predict.  I  would  not  like  to  predict  what  will  happen  to- 
morrow. 

Mr.  CuRRY\  High  class  goods  could  not  be  imported  in  that  class 
of  ship  to  any  extent? 

Mr.  Baker"^  a  little. 

Mr.  Curry'.  But  not  very  well  ? 

Mr.  Baker.  No.  You  could  provide  a  ship  of  that  kind  with  a 
certain  number  of  bulkheads  and  strengthen  in  between  the  decks, 
but  it  would  make  a  little  more  cost  for  operating.  But  that  is 
practical  only  on  small  colliers  or  full  cargo  grain  boats  coming  the 
other  way.  I  do  not  think  you  could  count  very  much  on  what  you 
would  get  from  England. 

Mr.  Curry.  Could  a  single  deck  ship  be  used  as  a  transport? 

Mr.  Baker.  Not  at  all;  only  as  a  supply  ship. 

Mr.  Curry.  Only  as  a  supply  ship? 


618      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Baker.  Yes.  You  want  a  different  class  of  ship  for  a  trans- 
port. 

Mr.  Curry.  They  could  not  be  turned  into  naval  auxiliaries  except 
for  carrj'ing  coal  and  oil  ? 

Mr.  Baker.  Yes.    That  is  what  we  want  to  build  very  badly. 

Mr.  Curry.  We  do  not  need  them  now,  but  we  will  if  we  increase 
the  Navy. 

Mr.  Baker.  I  do  not  know.  However,  as  I  say,  it  is  a  very  unwise 
man  who  would  predict  what  will  happen  to-morrow. 

Mr.  Curry.  That  is  w'hat  we  have  to  try  to  figure  out  and  we  want 
you  to  help  us. 

Mr.  Baker.  I  will  help  you  all  I  can  and  give  3'ou  the  best  knowl- 
edge I  have,  from  the  result  of  long  experience  and  great  study; 
and  I  want  to  assure  you  gentlemen  T  have  no  personal  interest  to 
serve. 

Mr.  Curry.  You  have  the  same  interest  we  have— tlie  welfare  of 
the  American  people. 

Mr.  Baker.  That  is  all.  Mr.  Curry;  I  can  assure  you  of  that. 

Another  thing  in  regard  to  Brazil.  I  will  just  touch  on  it  casually 
for  a  moment.  I  think  Mr.  Porch  was  here  from  Xew  Orleans  a 
few  years  ago,  as  some  of  you  gentlemen  will  remember,  and  told  us 
how  they  got  the  State  of  Louisiana  to  pass  a  bill  in  the  legisla- 
ture exempting  from  taxation  every  steamship  they  owned  or  con- 
trolled, running  from  any  point  in  Louisiana  to  any  foreign  port.  It 
was  then  found  necessary  to  have  a  change  in  the  constitution  of 
Louisiana  by  a  vote  of  the  people.  At  the  next  general  election 
they  had  this  changed  so  as  to  establish  their  line.  They  then  estab- 
lished a  steamship  company.  They  naturally  expected  a  large 
amount  of  coffee  from  Brazil,  as  they  wanted  to  direct  the  business 
through  the  Mississippi  Valley  to  interior  points.  There  was  every 
natural  reason  Avhy  it  could  be  done,  and  done  more  reasonably  and 
more  economically  than  by  bringing  the  coffee  to  our  east  coast 
ports.  The  result  of  it  was,  after  loading  the  ships  that  they  had 
chartered  with  full  cargoes  from  New  Orleans  to  Brazil,  they 
found  it  was  impossible  under  any  circumstances  to  get  a  pound  of 
coffee  for  return  freight. 

They  raised  two  or  three  hundred  thousand  dollars  in  New  Orleans 
and  chartered  two  or  three  boats  and  started  out  the  first  ship  very 
successfully,  with  a  tremendous  cargo  and  a  tremendous  celebration 
in  New  Orleans  when  they  left  there.  They  got  down  to  Kio,  and 
they  kept  cabling,  but  tliey  found  under  no  circumstances  could 
they  get  a  pound  of  coffee;  it  did  not  make  any  difference  what  rate 
they  made.  And  there,  again,  is  where  our 'Government,  through 
the  State  Department,  ought  to  be  brought  into  the  question  of  estab- 
lishing a  commercial  service  to  their  ports.  The  question  of  the 
transportation  of  that  coffee  is  entirely  in  the  control  of  the  Bra- 
zilian Government,  and,  as  I  understand,  they  have  even  issued  bonds 
against  the  value  of  this  coffee  in  storage. 

Mr.  Loud.  Against  the  shipping  combine? 

Mr.  Baker.  Yes. 

The  Chairman.  Eight  at  that  point,  those  people  were  before  this 
committee  when  we  investigated  the  so-called  shipping  trust? 
Mr.  Baker.  Yes. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      619 

The  Chairman.  The  company  to  which  yoii  alhide,  I  think,  was 
the  ]Mississippi  Valley  &  Southwestern  Co. 

Mr.  Baker.  That  is  the  company. 

The  Chairman.  They  could  not  get  any  cargoes  back,  for  the  rea- 
son that  all  the  merchants  and  dealers  in  coffee  in  South  America, 
as  well  as  in  this  country,  were  tied  up  by  what  we  call  a  deferred- 
rebate  system. 

Mr.  Baker.  Yes. 

The  Chairman.  And  they  could  not  assure  those  people  that  they 
would  maintain  a  regular  service. 

Mr.  Baker.  Yes. 

The  Chairman.  They  might  bring  one  cargo  back  at  a  reduced 
rate,  but  they  could  not  assure  them  that  they  could  bring  another. 

Mr.  Baker.  Yes. 

The  Chairman.  And  without  that  assurance  they  could  not  afford 
to  give  up  their  deferred  rebates,  in  many  instances  already  earned, 
provided  they  would  continue  to  patronize  the  foreign  lines. 

Mr.  Baker.  Yes. 

The  Chairman.  With  the  Lamport  &  Holt  and  other  lines  of 
ships. 

Mr.  Baker.  Yes. 

The  Chair:»ian.  And  for  that  reason  they  had  no  return  cargoes 
and  their  whole  scheme  went  to  pieces. 

Mr.  Baker.  Yes.  What  I  was  saying.  Judge  Alexander,  was  that 
possibly  by  the  proper  negotiations  made  between  our  State  De- 
partment and  the  Government  of  Brazil,  under  whom  the  control 
of  all  this  coffee  comes  in  their  valorization  scheme,  by  the  issue  of 
bonds  it  could  be  arranged. 

The  Chairman.  I  think  the  committee  will  be  united  on  that,  and 
I  think  we  could  provide  in  this  bill  that  this  deferred  rebate  sys- 
tem shall  be  broken  up  absolutely. 

Mr.  Baker.  You  have  the  authority  in  your  bill  which  will  enable 
you  to  do  it. 

The  Chairman,  I  think  we  have,  but  if  we  have  not  we  will  put 
it  there. 

Mr.  Baker.  Undoubtedly  you  have. 

Mr.  Curry.  How  can  we  interfere  with  the  Brazilian  Govern- 
ment's valorization  scheme  on  coffee? 

Mr.  Baker.  You  could  not  do  that,  and  I  would  not  suggest  it. 

The  Chairman.  You  could  not;  but  that  is  simply  to  maintain  a 
certain  level  of  price  of  the  commodity  itself;  it  has  no  reference  to 
the  freight  rates. 

Mr.  Curry.  No;  it  has  not. 

The  Chairman.  For  instance,  when  these  various  ships,  like  this 
very  ship  wdiich  went  out  with  this  cargo  under  such  auspicious  cir- 
cumstances and  proposed  to  bring  coffee  back  at  25  cents  a  sack,  as 
against  40  and  45  cents  paid  to  these  foreign  lines,  the  exporter 
or  importer  said,  "  We  would  be  quite  w^illing  to  patronize  you  and 
give  you  our  coffee  if  you  will  agree  to  do  this  during  a  term  of 
years  or  through  some  definite  period  of  time,  but  we  can  not  afford 
to  accept  your  tender  of  service  at  25  cents  a  sack  for  one  voyage 
and  then  have  to  go  back  to  the  old  rate,  or  possibly  a  higher  rate, 
and  at  the  same  time  forfeit  our  rebates  already  partly  earned." 


620      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Curry.  Judge,  under  the  valorization  scheme  of  Brazil  are 
not  certain  firms  given  the  preference,  so  far  as  pui'chase  is  con- 
cerned, from  Brazil? 

The  Chairman.  No;  I  think  not.  Noav,  Mr.  Slechta,  of  New 
York,  who  is  the  American  manager  of  the  Lloyd-Braziliero,  which 
is  the  Brazilian  Government  line,-  will  be  here,  and  it  will  be  inter- 
esting to  inquire  of  him  about  that  question. 

Mr.  CuRRV.  I  would  not  speak  about  it  only  Mr.  Baker  referred 
to  it.  It  is  a  very  interesting  situation  there  in  Brazil,  and  is  under- 
stood to  have  an  indirect  influence  on  shipping  from  that  country. 

The  Chairman.  He  will  be  here  Thursday  morning,  and  it  will 
be  interesting  to  inquire  of  him  about  it. 

Mr.  Baker.  It  has  a  very  prohibitive  influence,  and  could  only  be 
arranged,  in  my  study  of  the  subject,  by  some  negotiation  with  the 
Government.    However,  that  is  not  an  important  thing. 

The  next  question  in  the  bill  which  I  want  to  allude  to,  and  for 
which  I  would  like  to  offer  an  amendment:  I  would  enlarge  the 
powers  of  the  board  of  three  commissioners,  with  the  Secretary  of 
the  Navy  and  the  Secretary  of  Commerce,  by  giving  them  the  right 
not  only  of  recommendation,  but  after  careful  study  and  considera- 
tion as  to  what  changes  are  necessary — we  won't  say  in  the  laws,  but 
we  will  say  in  the  rules  governing  the  carrying  out  of  the  laws 
regulating  navigation — and  then  make  the  changes  necessary.  And 
I  wdll  only  cite  one  case  (and  I  am  very  sorry,  because  I  have  not 
the  papers  in  the  case,  my  last  talk  with  Judge  Alexander,  I  thought 
probably  I  would  come  on  later  this  week;  but  I  sent  to  Boston  for 
information  to  show  you  just  one  case)  where  the  rules  here  W'ork  a 
very  great  hardship,  and  I  know  ^'^ou  all,  as  reasonable  men,  will 
recognize  immediately  the  injustice  of  it.  There  is  a  small  company 
in  Boston,  organized,  I  think,  under  the  title  of  the  Boston  Gravel  & 
Sand  Co.  They  are  running  from  Boston  up  to  Scituate  and  have 
been  for  a  great  many  years.  You  probably  knoAv  about  it.  They 
are  running  a  very  small  steamer,  a  type  of  barge  such  as  outlined 
by  Secretary  Redfield  the  other  day.  Their  total  steaming  time  is 
about  four  and  a  half  hours.  There  have  been  new  rules  and  regu- 
lations of  the  coastwise  navigation  laws  which  compel  them  to  take 
a  certain  number  of  men  in  proportion  to  the  size  of  their  boats. 
Now,  under  the  ruling  brought  about  by  the  La  Follette  bill,  they  are 
compelled,  on  account  of  going  half  a  mile  from  shore,  the  only 
point  where  they  are  close  to  shore,  to  employ  three  men  on  that 
little  boat  to  do  four  and  a  half  hours'  work  in  one  trip. 

Mr.  Loud.  They  have  the  same  trouble  on  the  Great  Lakes  to  a 
very  much  larger  extent. 

Mr.  Edjionds.  They  are  extra  men,  you  mean? 

Mr.  Baker.  Two  extra  men.  They  have  one.  Now,  that  is  a  very 
great  hardship. 

Mr.  Curry.  Do  you  think  it  is  due  to  the  law,  Mr.  Baker,  or  to  the 
interpretation  of  the  law? 

Mr.  Baker.  To  both  the  interpretation  of  the  law  and  the  law. 
But  they  passed  on  the  interpretation  of  the  law — two  of  the  de- 
partments. I  saw  Gen.  IJhler  and  First  Assistant  Secretary  Sweet, 
and  asked  those  gentlemen — the  Boston  men  came  to  see  me  and  asked 
me  if  I  wouldn't  come  with  them — and  also  Mr.  Chamberlain,  and 


SiTlPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      621 

they  thought  it  was  very  unjust  and  very  unreasonable.  And  I 
understand  that  every  time  they  make  a  trip  they  are  fined  now  $500 
by  the  local  inspector  there,  and  promptly  remitted  by  Secretary 
Redfield.  And,  as  they  said  the  other  day,  "  Suppose  we  go  on  and 
there  should  be  a  decision  that  we  are  violating  the  law,  will  all  these 
fines  remitted  be  piled  up  against  us;  if  they  are,  it  will  wipe  out  four 
or  five  times  our  capital."    Unfortunately  that  would  be  the  case. 

There  are  a  great  many  questions  of  that  kind,  which  it  is  not 
worth  while  to  take  up  your  time  goin^  into  them.  But  a  board  of 
commissioners  such  as  you  have  outlined  here  could  regulate  all 
of  those  things.  The  proper  way  would  be  to  give  the  power  to  the 
President  temporarily  to  suspend  any  provisions  of  the  law  of  that 
kind  on  the  recommendation  of  this  board  until  Congress  should 
meet  and  act  upon  it,  just  as  we  did  in  the  ship-registry  bill.  And 
it  has  worked  out  very  well. 

Secretary  McAdoo  was  asked  the  question  the  other  day  why  it 
was  that  the  ship-registry  bill  and  the  marine-insurance  act  passed 
so  promptl3\  Gentlemen,  it  was  because  you  trusted  a  few  practical 
business  men  and  did  exactl}^  what  they  advised  you  to  do.  I  was 
not  the  chairman  of  that  committee,  but  I  was  on  the  committee. 
Mr.  Farrell,  as  I  remember,  was  chairman,  Mr.  Franklin,  Capt. 
Dollar,  and  Mr.  Kirlin,  possibly — I  know  he  was  on  the  insurance 
committee — they  all  went  away  and  left  Capt.  Dollar  and  myself 
here,  and  Ave  had  to  bring  up  and  carry  the  whole  thing  through, 
and  we  met  with  a  most  keen  interest  and  assistance  from  Congress 
and  every  department  of  the  Government.  It  was  an  emergency 
condition.  And  look  at  the  results;  it  has  been  splendid.  And  the 
same  thing  can  be  carried  out  by  a  commission  of  this  kind. 

Mr.  Curry.  Why  should  they  ever  come  to  Congress?  Why 
should  not  that  commission  and  the  President  be  given  the  right  and 
power  to  either  suspend  or  amend  those  rules? 

Mr.  Baker.  It  is  just  the  same,  Mr.  Curry,  because  Congress  could 
change  them  afterwards.  The  next  session  of  Congress  could  annul 
any  authority.  The  President  in  that  particular  case,  entirely  at 
his  discretion  as  I  remember,  was  given  the  right  to  suspend  the 
law  for  such  length  of  time  as  he  thought  wise.  I  only  suggest 
until  Congress  meets  so  as  to  give  them  a  right  to  compel  this  board 
of  commissioners  to  come  before  you  and  put  their  reasons  for  doing 
it  and  show  the  justice  of  it  if  they  can. 

Mr.  Loud.  You  know  that  this  committee  on  the  Great  Lakes  is 
seeking  to  have  boats  ^ whose  time  is  less  than  24  hours  exempted 
from  the  provisions  of  the  three-watch  law. 

Mr.  Baker.  Yes. 

Mr.  Loud.  On  the  Great  Lakes  we  have  lines  where  they  have  to 
run  out  only  seven  hours,  and  yet  it  is  a  hardship  to  put  three  crews 
on  for  that  short  distance. 

Mr.  Baker.  But  might  I  ask  why  the  valuable  time  of  you  Con- 
gresssmen  and  Senators  should  be  taken  up  with  these  little  indi- 
vidual questions  when  you  can  grant  the  authority  to  a  board  that 
you  can  trust? 

Mr.  Loud.  That  is  what  we  hope  to  do. 

Mr.  Baker.  Then  there  is  another  suggestion  I  would  like  to  add 
here,  and  that  is  this,  that  those  with  whom  I  have  discussed  the 
bill  so  far  say  that  the  provision  is  there  now,  but  I  would  like  to 
32910—16 40 


622      SHIPPING  BOAKD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

see  it  made  stronger  in  a  way  and  demand  that  this  board  immedi- 
ately recommend  such  changes  in  our  mail-contract  act  of  March  3, 
1891,  as  they  find  necessary  to  establish  important  mail  routes,  and 
submit  such  recommendations  to  the  next  session  of  Congress.  It 
will  take  them  all  of  that  time  to  do  it.  But  I  should  like  this  very 
much ;  I  would  feel  the  bill  w\as  stronger. 

With  regai'd  to  Government  operation,  I  will  tell  you  gentlemen 
just  as  sure  as  can  be  if  you  get  an  efficient  and  intelligent  board 
of  commissioners  you  will  never  operate  a  vessel.  And  my  reasons 
I  will  give  you  in  a  few  moments.  In  the  first  place  3"ou  would  be 
assisting  any  proposed  steamship  owner  to  whatever  extent  it  might 
be  considered  wise  and  prudent  by  the  board  in  the  use  of  capital 
on  the  basis  of  an  interest  rate — we  will  say  4  per  cent — which  would 
allow  all  the  interest  that  the  Government  would  have  to  pay  on 
such  an  issue  and  1  per  cent  toward  expenses,  so  that  I  do  not  believe 
that  the  $50,000,000  would  ever  cost  the  Government  a  penny. 

In  addition  to  that,  of  course,  you  would  provide  for  proper  de- 
preciation and  insurance.  Any  steamship  owner  would  have  the 
advantage  of  your  assistance  in  this  bill,  and  I  have  had  a  lot  of  ex- 
perience with  bankers  in  getting  money.  And  under  no  circum- 
stances could  I  get  a  large  amount  of  capital,  whether  I  did  it  on  a 
bond  issue  of  4|  or  o  per  cent,  such  as  the  International  Mercantile 
Marine  bonds,  without  a  certain  discount  and  a  certain  percentage  of 
stock,  that  AYOuld  cost  not  less  than  10  per  cent. 

Mr.  RowE.  You  do  not  mean  10  per  cent  per  annum  ? 

Mr.  Baker.  Ten  per  cent  per  annum ;  yes,  sir. 

Mr.  Edmonds.  Do  3^ou  mean  for  interest  alone? 

Mr.  Baker.  Oh,  no. 

Mr.  Loud.  Interest  and  insurance? 

Mr.  Baker.  Oh,  no;  I  am  just  talking  about  where  you  got  capital. 
If  you  could  not  go  to  the  Government  to  assist  you,  which  you 
would  be  doing  in  this  case,  but  if  j'ou  had  to  go  to  a  banker,  to  take 
up  a  new  steamship  enterprise,  it  would  cost  you,  with  your  expenses, 
not  less  than  10  per  cent. 

Mr.  Loud.  Why  should  they  charge  3'ou  more  than  a  rate  of  in- 
terest of  3  per  cent,  which  they  have  to  pay  on  the  bonds,  if  you  give 
the  Government  back  the  auxiliaries  for  the  use  of  the  Navy  and 
Army  ? 

Mr.  Baker.  I  am  putting  it  a  little  bit  higher.  I  think  it  ought  to 
be  3  per  cent. 

Mr.  Loud.  Why  would  you  charge  more  than  what  is  carried  by 
the  bonds?  ' 

Mr.  Baker.  Simply  because  I  want  to  show  you  the  advantage 
he  can  figure  on  over  what  his  conditions  would  be  with  the  bankers. 

Mr.  Loud.  If  you  give  the  Government  the  auxiliary,  always  sub- 
ject to  call,  and  stipulate  that  the  ships  will  never  leave  American 
registry  ? 

Mr.  Baker.  Yes. 

Mr.  Loud.  And  you  give  the  Government  insurance  and  the  full 
value  of  the  ship  as  security  ? 

Mr.  Baker.  Yes. 

Mr.  Loud.  And  the  Government  has  a  mortgage  lien  upon  the 
ship,  so  that  the  Government  is  secured,  why  is  it  not  a  good  thing  for 
the  Government  and  a  good  thing  for  you  ? 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHAN  J'  MARINE.      623 

Mr.  Baker.  I  say  it  is.  I  am  trying  to  shoAv  you  it  is  a  great 
advantage  to  the  man,  and  where  you  help  him  to  the  extent,  in  my 
opinion,  of  at  least  6  per  cent  advantage. 

Mr.  Loud.  That  is  a  mutual  Avay  of  building  up  a  merchant  marine, 

Mr.  Baker.  Yes.  I  have  been  to  the  bankers  to  raise  $5,000,000 
at  one  time  [Morgan  &  Co.],  and  it  cost  me,  when  I  took  out  my 
expenses  and  bonus  to  them  and  lawyers  fees,  and  so  on,  10  per  cent. 

Mr.  Hardy.  I  wish  you  would  elaborate  on  that  a  little.  I  want 
to  see  how  you  get  that  10  per  cent  ? 

Mr.  Baker.  I  will  show  you.  In  the  first  place,  take  an  organiza- 
tion like  the  International  Mercantile  Marine,  where  there  are  certain 
bonuses.     You  have  got  to  earn  interest  on  it. 

Mr.  Ed:monds.  Don't  take  that ;  take  your  $5,000,000  you  borrowed 
from  Morgan  &  Co.,  and  paid  10  per  cent. 

Mr.  Baker.  The  $5,000,000  we  arranged  with  Morgan  &  Co.  That 
particular  transaction  was  afterwards  changed;  the  time  was  short- 
ened, so  it  probably  cost  me  a  little  more  per  annum  than  it  would 
if  it  had  continued  the  whole  length  of  time.  I  was  building  at  that 
time  the  first  of  the  Minnies — the  Minneapolis,  the  Minnesota^  Minne- 
haha, and  those  boats. 

Mr.  RoAVE.  Of  the  Atlantic  Transport  Co. 

Mr.  Baker.  Yes;  I  owned  that  and  always  did. 

Mr.  RowE.  Have  you  any  interest  in  it  now? 

Mr.  Baker.  Ko. 

Mr.  RowE.  The}'  have  turned  out  to  be  fine,  haven't  they,  for  the 
English  Government? 

Mr.  Baker.  Very.  And  those  were  all  under  the  English  flag. 
We  went  to  them  from  time  to  time  and  got  money  and  we  proposed 
at  that  time — I  think  I  have  the  original  prospectus  somewdiere — to 
issue  a  debenture  stock  of  5  per  cent.  Morgan  &  Co.  were  to 
get  that  stock  at  80,  and  we  were  to  give  them  a  percentage  of 
common  stock,  which  afterwards  turned  out  to  be  worth  $300  a 
share — and  if  you  took  it  on  that  basis  it  would  be  20  per  cent  per 
annum;  but,  however,  we  will  take  it  on  this  basis  of  $100  a  share— 
and  we  were  to  give  them  10  per  cent  in  preferred  stock  and  10  per 
cent  in  common  stock,  which  they  were  going  to  uae  with  their  under- 
writers. The  whole  thing  was  underwritten — I  am  just  speaking 
now  from  memory  and  it  was  quite  a  long  time  ago — on  the  basis  of 
about  5  per  cent;  and  Ave  were  borroAving  that  money,  or  rather 
arranging  for  this  indebtedness  for  a  period  of  10  years.  It  would 
have  cost  us  about  12  per  cent  per  annum  if  Ave  had  carried  it  for  the 
10  years.  But  fortunately  or  unfortunately,  Ave  concluded  it  in  less 
time,  and  my  recollection  of  the  calculation  is  that  it  amounted  to 
fully  20  per  cent  on  the  investment. 

Mr.  Edmonds.  Was  not  that  the  customary  Avay  they  underAvrote 
any  kmd  of  an  enterprise  brought  them  at  that  time? 

Mr.  Baker.  Oh,  yes. 

Mr.  Edmonds.  Not  merely  on  ships? 

Mr.  Baker.  No. 

Mr.  Edmonds.  But  on  any  kind  of  an  enterprise? 

Mr.  Baker.  Yes;  just  as  they  are  doing  to-day,  Mr.  Edmonds. 

Mr.  RoAVE.  Only  not  quite  so  big  a  profit  is  made  in  late  years? 

Mr.  Baker.  \o:  the  amount  of  profit  has  been  reduced. 


()24    riiiii'iMNc  r.oAun,  navaf.  auxiliary,  and  merchant  marini::. 

Mr.  Hardy.  Mr.  Baker,  I  want  to  say  that  I  asked  that  question 
because  I  wanted  it  to  be  made  very  clear.  It  is  one  of  those  cloudy 
things  I  want  to  get  clear  in  my  mind;  and  I  hope  when  your  testi- 
mony is  submitted  to  j^ou  j^ou  will  take  occasion  to  clarify  it — how 
this  thing  cost  you  10,  12,  or  20  per  cent.  * 

Mr.  Baker.  I  will  do  the  best  I  can.  I  am  all  alone  and  entirely 
out  of  business,  but  I  will  do  the  best  I  can. 

Mr.  Edmonds.  Could  you  to-day  underwrite  a  shipping  enterprise 
in  any  of  those  banks  without  giving  all  of  the  bonuses  that  you  did? 

Mr.  Baker.  You  would  not  have  to  give  as  much  bonus  as  w'e  did 
then.  I  think  it  could  be  done.  It  depends  ver}^  much  on  who  does 
it  and  what  class  of  trade  you  have  or  what,  in  a  general  way,  you 
in  Congress  are  going  to  do  now-  to  assist  or  interfere  with  it  has 
more  to  do  with  the  question  of  the  investment  of  capital  than  any- 
thing else. 

Mr.  Loud.  May  I  ask  you  one  question  ? 

Mr.  Baker.  Certainly. 

Mr.  Loud.  How  w^ould  you  regard  a  25  per  cent  construction  option 
to  be  given  for  ships  built  in  American  yards  on  plans  suitable  for 
auxiliaries  for  the  Navy  or  Army,  subject  to  call  by  the  Government 
in  case  of  need? 

Mr.  Baker.  You  mean  the  Government  would  furnish  25  per  cent 
of  the  cost  ? 

Mr.  Loud.  Exactly ;  and  in  case  of  taking  them  over  it  would  take 
them  over  at  the  other  75  per  cent,  the  remaining  part  of  the  option, 
with  proper  depreciation. 

Mr.  Baker.  If  you  pass  such  a  bill  as  that  I  think  a  great  deal 
could  be  done. 

Mr.  Loud.  There  is  not  anything  in  that  bill  but  that  one  feature 
of  25  per  cent. 

Mr.  Baker.  You  are  providing  here  for  a  commission  and  if  you 
give  to  such  an  intelligent  board  the  right  to  regulate  by  rules  and 
regulations  and  the  temporary  suspension  of  any  law  necessary  to 
the  decision  of  the  President,  I  believe  you  could  do  it  without  any 
objection  and  accomplish  more  for  the  upbuilding  of  our  merchant 
marine  than  in  anything  you  do. 

Mr.  Loud.  I  want  to  get  an  answer  to  my  question,  if  I  can,  of 
how  you  Avould  regard  that  25  per  cent  construction  option? 

Mr.  Baker.  Very  favorably,  if  this  bill  is  passed.  But  to-day  I 
would  not  regard  it  under  any  circumstances  if  you  leave  the  laws 
just  as  they  are  now,  without  any  change  and  no  opportunity  of  de- 
veloping what  can  be  done — you  could  not  induce  me  to  put  a  dollar 
Into  iihipping.  But  if  you  give  us  such  legislation  as  is  proposed  in 
this  bill,  perhaps  with  some  changes  which  you  gentlemen  may  con- 
sider w  ise  and  proper  and  with  the  best  advice  you  can  get  as  to  w^hat 
is  desirable,  you  w  ill  find  I  am  ready  to  acquiesce  in  them.  The  only 
thing  you  want  to  do  is  to  do  something,  really,  gentlemen.  Do  some- 
thing ;  make  a  beginning  and  correct  any  errors  at  the  next  session  of 
Congress. 

Mr.  Loud.  The  worst  mistake  we  can  make  is  to  do  nothing? 

Mr,  Baker.  The  worst  mistake  3'ou  can  make  is  to  do  nothing ;  the 
very  worst  mistake.  It  is  the  worst  mistake  that  has  been  made  in 
the  past;  you  would  have  had  a  splendid  merchant  marine  to-day, 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      626 

supplying  millions  of  dollars  to  the  country,  if  you  had  only  done 
something,  (iloing  away  back  to  the  Hanna-Frj'e  bill — that  was  A 
very  unjust  bill  in  some  ways — I  w-as  very  much  interested  in  trying  to 
get  it  passed,  but  it  was  what  I  would  term  pure  and  simple  class 
legislation.  But  now  we  are  all  wiser,  I  hope,  and  we  have  learned 
more  with  time  and  experience,  and  it  certainly  seems  to  me  if  you  do 
not  make  a  beginning  now  you  never  will  get  the  same  opportunity 
again.  And  if  you  have  any  views,  try  and  each  one  give  up  some- 
thing and  harmonize  your  views  and  you  will  do  a  great  thing  for 
this  country.    I  wish  Mr.  Greene  were  here  to  hear  me  say  that. 

Mr.  Edmonds.  Do  you  approve  of  taking  Hawaii  and  Porto  Eico 
out  of  the  coastwise  traffic  ?  You  are  a  shipping  man  and  you  have 
been  in  the  business;  think  about  that  and  tell  us  what  you  would 
suggest. 

Mr.  Baker.  That  is  what  I  am  doing,  thinking  about  it.  Mi*, 
Dearborne  has  done  a  wonderful  business  and  built  up  a  wonderful 
business  there  and  he  deserves  every  encouragement.  He  treats  it 
in  a  liberal  way.  I  have  heard  there  was  a  lawyer  came  here  from 
^  New  York  to  represent  some  dissatisfied  sugar  planters  in  Haw^aii  at 
one  time  and  wanted  to  get  additional  service,  but  they  have  treated 
that  business  in  a  bread,  liberal  spirit,  and  I  think  w:ould  meet  you 
in  that  way.  I  would  not  touch  that  question  at  the  present  time. 
If  this  board  comes  to  you  and  can  shoAv  a  good  reason  why,  after 
careful  study  and  intelligent  study  of  that  question,  and  recommends 
that  you  should  do  it,  then  I  would  do  it. 

Mr.  Edmonds.  In  other  words,  you  would  not  change  the  laws  at 
the  present  time  until  the  board  saw^  it  was  advisable  to  do  it  after 
going  over  the  conditions? 

Mr.  Baker.  Xo.  It  is  a  subject  that  ought  to  be  very  carefully 
thought  out. 

Mr.  Curry.  We  have  a  good  service  between  the  Sandwich  Islands 
and  the  coast  and  between  the  Philippines  and  the  coast  now. 

Mr.  Baker.  AVe  have  not  a  very  good  service  to  the  Philippines. 

Mr.  Curry.  If  you  opened  them  to  competition  with  the  world, 
we  would  not  have  any. 

Mr.  Baker.  Yes.     The  Philippines  to-day 

Mr.  Curry.  This  bill  is  supposed  to  be  a  bill  for  the  development 
of  an  American  merchant  marine. 

Mr.  Baker.  That  is  it. 

Mr.  Curry.  Not  of  a  British  or  Japanese  merchant  marine. 

Mr.  Baker.  You  have  plenty  to  do  to  keep  you  busy.  Let  those 
rest  for  a  while,  would  be  my  advice. 

Mr.  Edmonds.  Would  3'ou  think  that  a  man  who  is  in  the  shipping 
business  would  want  to  charter  a  vessel  from  this  board,  subject  to 
all  the  restrictions  that  are  in  the  bill,  unless  he  could  get  it  cheaper 
from  the  board  than  anywhere  else? 

Mr.  Baker.  He  would  get  it  cheaper  from  the  board  than  anywhert? 
else,  just  on  the  lines  you  outlined. 

Mr.  Edmonds.  How  would  he  get  it  cheaper  from  the  board? 

Mr.  Baker.  Why,  if  he  is  only  paying  4  per  cent  for  his  money, 
compared  with  going  to  a  bank  and  paying  6,  he  would  get  it  for  2 
per  cent  less.  But  he  will  never  be  able  to  get  it  from  a  bank  for' 
6  per  cent. 


626      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  KuMONDS.  Would  the  board  be  able  to  charter  vessels  and  then 
recharter  at  a  less  rate?     That  is  what  it  says  in  the  bill. 

Mr.  Baker.  That  is  in  an  occasional  emergenc3^  The  board  would 
never  charter  any  vessel;  I  do  not  see  why  they  should.  It  would 
not  be  good  business  policy,  because  there  they  would  be  coming 
in  competition  with  the  man  who  had  his  regular  established  trade. 

Mr.  Edmonds.  That  would  be  true.  Then  the  man  buying  a  vessel 
i^rom  the  board,  subject  to  all  the  restrictions  in  this  bill  under  which 
lie  would  have  to  buy,  w^ould  only  do  it  because  he  could  get  it  at  a 
|)rice  probably  a  couple  per  cent  cheaper  than  he  could  if  he  got 
'it  from  the  shipyard? 

Mr.  Baker.  Yes;  but  you  must  remember  that  every  other  Gov- 
ernment has  similar  restrictions.  Every  one  of  my  ships  built  in 
British  shipyards  and  operated  under  the  British  flag  give  the  right 
to  the  British  Government  to  take  them.  And  it  is  the  same  with 
Japan,  France,  Germany,  and  all  of  the  countries. 

Mr.  Edmonds.  But  there  are  a  little  different  restrictions  in  the  bill 
here;  for  instance,  a  man  can  not  sell  the  boat  without  the  board 
lets  him  sell  it  and  he  can  not  charter  it  without  the  board  gives  its 
consent. 

Mr.  Baker.  The  same  condition  exists  to-day.  When  we  were  try- 
ing to  pass  the  ship-purchase  bill,  it  was  necessary  for  our  ambassa- 
dor to  go  to  the  British  Board  of  Trade 

Mr.  Edmonds.  Is  that  just  true  of  to-day,  or  has  it  been  true  in 
the  past  ? 

Mr.  Baker.  Only  of  to-day.  Because,  as  I  stated  here  in  the  very 
beginning,  a  bill  was  introduced  in  Parliament  trying  to  prevent 
our  ownership.  Their  policy  has  only  been  recently  adopted,  but  I 
think  it  will  probably  be  permanent;  although,  as  I  say,  I  think  it 
is  a  very  unwise  man  who  would  undertake  to  prophesy  what  will 
bappen  after  the  war. 

Mr.  Edmonds.  But  when  you  were  buying  ships  under  the  British 
registry  there  were  no  such  restrictions,  were  there? 

Mr.  Baker.  No;  but  w^e  always  had  as  ship's  husband  an  English- 
aian  for  register  at  Somerset  House.  And  during  the  Spanish-Amer- 
ican War  when  those  ships  were  transferred  to  the  American  Govern- 
ment— I  transferred  seven  ships  in  one  day — the  contract  was  written 
on  a  piece  of  paper  of  the  Arlington  Hotel  paper,  just  a  short  note 
sheet,  and  signed  across  the  face  of  $lr,000,000,  and  that  is  all  there 
was — we  transferred  those  from  the  British  flag  to  the  American  flag, 
and  Attorney  General  Griggs,  of  Xew  Jerse.y,  said  it  could  not  be  done — ^ 
ihat  it  could  not  possibly  be  done — and  I  remember  a  long  discussion 
at  that  time.  But  afterwards  they  informed  us  if  Ave  took  the  re- 
sponsibility, owning  a  controlling  interest  in  the  ships,  and  trans- 
ferred them  to  the  United  States  flag,  that  possibly  the  gentleman 
who  was  acting  in  my  interest,  Mr.  Alfred  S.  AVilliams,  in  London, 
might  be  put  in  jail  if  any  question  arose  and  Spain  objected.  How- 
ever, it  went  through  very  peaceably  and  Spain  did  not  object.  But 
our  ships  were  ahvays  under  the  jurisdiction  of  the  British  Govern- 
ment, although  absolutely  American  owned.  That  is  the  position 
they  have  always  occupied  and  which  we  should  occup}'.  And  I 
regard  this  condition  in  the  bill  as  merely  covering  such  a  condition. 
You  can  put  in  some  other  provision.     You  can  pass  a  rule  for  the 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      627 

ciistoinhouse,  that  they  should  not  be  transferred  without  the  consent 
of  the  Secretary  of  the  Treasury,  and  liave  the  customhouse  make  a 
note  of  Avhere  our  ships  are  running  that  are  registered  now.  It  is 
only  a  protective  measure  in  case  of  necessity.  I  do  not  believe  it 
would  ever  be  exercised,  and  I  do  not  feel  any  shipowner  would  have 
any  fear  of  it  any  more  than  they  do  in  England. 

Mr.  Edmonds.  In  regard  to  these  Government-owned  lines,  would 
not  you  think  it  would  be  well  to  put  a  restriction  in  that  paragraph 
that  when  the  line  was  profitable  that  the  Government  should  dis- 
pose of  its  interest  in  the  line? 

Mr.  Baker.  I  think  the  Government  would.  I  do  not  see  any 
objection  to  it. 

Mr.  Curry.  Do  you  know  of  any  reason  why  the  Government 
should  go  into  the  business  through  a  Government  board? 

Mr.  Baker.  No ;  except  in  such  cases  as  I  have  stated.  They  might 
start  this  Argentina  line  that  I  outlined  as  one  of  the  cases.  But 
there  is  no  reason  in  the  world  why  some  big  coal  operator  should 
not  come  in  and  take  advantage  of  that. 

Mr.  Curry.  Do  3'ou  think  that  provision  in  the  law  would  deter 
private  capital  from  investing  in  a  merchant  marine? 

Mr.  Baker.  No. 

Mr.  Curry.  You  do  not  think  it  would? 

Mr.  Baker.  No;  I  do  not. 

Mr.  Curry.  What  made  me  ask  that  question  was  that  there  was  a 
gentleman  before  the  committee  some  days  ago — I  have  forgotten  his 
name — who  stated  that  he  had  organized  a  company  to  go  into  the 
shipbuilding  business — a  $20,000,000  corporation — and  he  thought  he 
would  have  no  trouble  in  getting  the  money.  But,  he  said,  that  much 
to  his  surprise  there  was  not  a  banker  in  the  United  States  would  let 
him  have  the  money,  fearing  the  passage  of  this  bill  carrying  that 
provision  of  permitting  the  Government  to  go  into  the  merchant- 
marine  business  through  a  Government-owned  corporation. 

Mr.  Baker.  Mr.  Curry,  I  can  only  answer  that  within  the  last  few 
days  Mr.  Schwab  got  liehind  the  Maryland  Steel  Co.  and  invested 
$20,000,000  for  the  purpose  of  enlarging  that  plant  for  the  building 
of  ships. 

Mr.  Edmonds.  He  sees  this  $50,000,000  coming. 

Mr.  Curry.  I  think  that  is  a  different  situation  and  a  different 
condition.  Mr.  Schwab  is  already  in  the  business;  he  has  money 
and  he  is  developing  it.  This  was  a  proposition  where  these  men 
were  going  into  the  business  and  were  denied  financial  backing  upon 
any  terms. 

Mr.  Baker.  I  think  that  is  where  the  new  capital  in  this  bill  will 
force  more  competition  in  the  future.  I  had  a  talk  with  Mr.  Wood, 
of  the  Maryland  Steel  Co.,  and  he  said  they  were  having  great  diffi- 
cult}^ in  getting  skilled  mechanics  and  that  they  could  not  get  them; 
and  it  is  almost  impossible  to  get  the  men  necessary  to  work  in  the 
American  shipyards  to-day,  with  the  press  of  work  w^hich  they  have. 

Mr.  RowE,  There  are  plenty  of  men  in  the  country  who  are  bridge 
builders,  and  could  not  they  readily  be  turned  into  the  work  of  build- 
ing steel  ships? 

Mr.  Baker.  Yes;  in  time,  by  training. 

]\Ir.  RowE.  You  know  they  are  not  so  very  busy  at  this  time. 


628      SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MEIiCHANT  MAKINE. 

Mr.  Baker.  No;  they  are  not  very  busy  just  now. 

Mr.  EowE.  There  are  not  more  than  half  of  them  working,  and  it 
seems  to  me  they  are  a  class  of  men  who  work  on  bridge  building 
who  could  be  readily  turned  into  shipbuilding. 

Mr.  Baker.  Of  course,  I  am  not  interested  in  any  shipbuilding 
plant,  and  I  only  judge  from  what  Mr.  Wood  told  me  the  other  night, 
that  their  difficulty  was  in  getting  men,  that  they  could  not  get  them. 
And  I  have  no  doubt,  being  men  of  very  great  ability  and  experience, 
they  have  ransacked  every  section  of  the  country  for  men  because 
they  need  them  so  badly. 

Mr.  Loud.  You  stated  you  believed  that  we  would  never  operate 
under  this  bill  and  never  charter  under  this  bill. 

Mr.  Baker.  Yes. 

Mr.  Loud.  It  follows,  of  course,  as  a  logical  conclusion,  that  we 
would  never  build  or  buy  under  this  bill,  if  we  can  not  charter  or 
operate  ? 

Mr.  Baker,  Not  necessarily. 

Mr.  Loud.  In  Avhat  way  ? 

Mr.  Baker.  Why,  they  would  build  and  buy  to  provide  the  Navy 
with  just  exactly  what  the  ]-)urpose  of  this  bill  is. 

Mr.  Loud.  If  they  do  not  propose  to  charter  or  operate,  what  are 
they  going  to  do  wath  them? 

Mr.  Baker.  Oh,  they  Avoald  charter  them  after  they  build  them. 
He  was  talking  about  chartering  ships  from  other  people  and  re- 
chartering. 

Mr.  Loud.  I  did  not  understand  that. 

Mr.  Curry.  If  this  bill  were  enacted,  how  long  do  you  think  it 
would  be  before  the  Government  could  have  these  ships  built  and 
equipped  and  in  service? 

Mr.  Baker.  Gentlemen,  I  probably  may  be  wrong,  but  I  have 
worked  out  after  a  great  deal  of  thought  and  care  in  my  mind  just 
what  ought  to  be  done  under  the  circumstances,  but  I  do  not  want 
to  take  your  time.  I  would  be  very  glad  to  outline  to  you,  if  you 
would  like  to  have  it,  just  my  idea  about  this  principal  of  $50,000,000. 
But  before  leaving  that  I  want  to  speak  of  something  about  which 
there  seems  to  have  been  a  great  misunderstanding.  I  want  to  quote 
one  circumstance,  and  that  is  with  regard  to  the  discussions  that 
have  been  had  and  brought  forward  here  again  and  again  and  con- 
stantly repeated  on  the  purchases  during  the  Spanish-American  War 
of  ships.  My  transactions  were  entirely  with  the  War  Department. 
Every  single,  solitary  ship  I  sold  them  in  1898  is  still  running;  it 
is  the  basis  of  your  whole  Philippine  business,  nearly,  and  every 
one  of  them  ought  to  have  been  in  the  scrap  heap,  and  if  I  had  had 
them  they  would  have  been  there.  But  you  can  sell  them  now, 
to-day,  for  more  than  you  gave  me  for  them  18  years  ago. 

Mr.  Edmonds.  Let  me  ask  you  right  on  that  point:  What  is  the 
life  of  a  steel  ship;  what  is  it  considered  to  be  among  shipping  men? 

Mr.  Baker.  Not  over  20  years. 

Mr.  Edmonds.  It  was  testified  here  the  other  day  they  would  last 
45  years. 

Mr.  Baker.  That  is  perfectly  absurd. 

Mr.  Edmonds.  I  just  wanted  to  get  your  idea  about  that,  because 
I  knew  you  could  give  us  the  information. 


SHIPPING  BOAED,  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE.      629 

Mr.  Baker.  Yes. 

Mr.  Edmojsds.  Will  an  iron  ship  last  any  longer? 

Mr.  Baker.  It  would  not  last  any  longer.  It  is  not  the  iron  in 
the  ship  that  wears  out  or  the  steel  in  the  ship  that  wears  out,  but 
at  the  end  of  20  years  they  are  not  fit  for  anything  except  to  go 
on  the  Italian  scrap  heap  to  supply  them  with  iron.  Because  of  the 
improvement  in  construction  and  cost  of  operation  which  is  brought 
about  to-day  by  modern  and  improved  engines,  by  the  use  of  oil, 
and  many  other  things,  it  would  pay  to  sell  a  ship  for  whatever  it 
Avould  bring  as  junk  and  get  a  new  one  after  20  3^ears,  because  yon 
would  be  better  off. 

Mr.  Edmonds.  Twenty  years  is  all  you  can  count  on  ? 

Mr.  Baker.  Twenty  years  is  all  you  can  count  on,  and  really  you 
ought  not  to  count  on  over  16. 

Mr.  Curry.  That  is  to  say,  at  the  end  of  20  years  thev  ought  to 
be  sold? 

Mr.  Baker.  Absolutely.  I  have  had  people  say  to  me  that  it  was 
absurd  to  sell  ships  that  had  only  been  run  for  18  or  20  years,  and 
I  have  said,  "  Oh,  no ;  I  know  that  every  time  I  carry  a  ton  of 
freight  across  the  ocean  on  a  ship  20  years  old  it  costs  me  from  10 
to  15  to  20  per  cent  more  per  ton  because  she  is  an  old  ship." 

Mr.  Curry.  That  ether  question  that  I  asked:  All  of  the  ship- 
yards in  the  United  States,  you  are  informed,  are  working  overtime? 

Mr.  Baker.  Yes. 

Mr.  Curry.  And  have  orders  ahead  for  three  years  at  least? 

Mr.  Baker.  Yes. 

Mr.  Curry.  And  some  of  them  four? 

Mr.  Baker.  Yes. 

Mr.  Curry.  If  this  bill  should  be  passed  and  become  a  law,  how 
long  do  you  think  it  would  be  before  the  United  States  Government, 
through  its  corporation,  could  build  ships  and  have  them  on  the 
ocean,  equipped  and  ready  for  the  merchant  marine  service? 

Mr.  Baker.  If  conditions  should  not  change  from  to-day,  it  would 
be  at  least  two  years  before  the  first  ship  could  be  gotten  out  under 
ihose  conditions. 

Mr.  Curry.  How  could  she  be  gotten  out  in  two  years? 

Mr.  Baker.  Because  a  great  number  of  those  yards  are  preparing 
now  to  enormously  increase  their  facilities  and  this  bill  would  lead 
to  the  establishment  of  new  yards,  in  my  opinion,  and  in  fact  I  know 
of  one  interest  now  that  happened  to  come  in  to  see  me  that  are  pre- 
paring to  immediately  go  into  the  building  of  ships  if  this  bill  is 
passed.  They  will  cost  more  than  they  did  before.  You  lost  your 
opportunity  when  you  did  not  pass  the  ship-purchase  bill,  gentlemen. 
You  lost  a  grand  opportunity.  And,  bye  the  bye,  I  want  to  answer 
Mr.  Edmonds.  I  understood  the  other  day  he  asked  about  some  of 
those  conditions;  but  what  I  would  do,  gentlemen,  and  I  am  only 
offering  a  suggestion  for  careful  consideration,  to  me  as  an  American 
citizen,  it  is  an  outrage  I  can  not  go  across  this  ocean  under  our 
flag  in  absolute  protection,  comfort,  and  safety — it  matters  not  what 
other  nations  are  doing.  And  if  we  had  American  ships  we  could; 
and  the  first  thing  I  would  do  would  be  to  put  a  class  of  boats  in 
the  north  Atlantic  service  between  European  and  American  ports 
equal  to  anything  that  any  country  in  the  world  has  to-day  and  I 


630      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

would  do  whatever  was  necessary  to  bring  that  about.  I  took  it 
up  with  some  gentlemen  in  New  York  who  command  unlimited 
capital  and  they  said,  "Mr,  Baker,  if  you  could  get  the  Government 
to  realize  that  first,  we  would  be  perfectly  willing  to  take  those  ships 
on  the  basis  of  absolutely  no  cost  to  the  Government,  give  them  a 
right  of  call  at  any  time  for  scout  ships." 

Now,  these  would  be  scout  ships,  which  is  one  of  the  most  im- 
portant considerations  to  the  Navy  Department  and  to  our  coastwise 
defenses.  You  may  talk  about  laying  your  mines  all  along  the  coast, 
but  this  is  going  to  be  the  greatest  element,  gentlemen,  in  bringing 
about  protection  and  peace?  For  other  lines  I  would  provide,  not  as 
fast  ships,  because  the  conditions  are  all  different,  but  what  this  board 
has  got  to  do  is  to  provide  the  United  States  with  ships  for  different 
parts  of  the  world  and  different  routes  ot  the  world — what  is  re- 
quired, Mr.  Curry,  from  your  California  ports  to  the  Orient,  just 
as  they  have  to-day — and  we  may  have  to  meet  them— from  Japan 
and  other  countries  may  come  and  do  like  China  is  doing  to-day,  as 
you  know  what  they  are  doing;  a  poor  country  like  that  goes  to  work 
and  says,  even  to  her  servant  girls  and  servant  men  all  over  California, 
"  subscribe,"  and  they  all  come  forward  liberally  to  buy  an  old  ship 
from  the  Pacific  Mail  for  China  and  paid  an  exorbitant  price  for 
her,  simply  as  a  matter  of  patriotism  and  pride  in  their  country 
to  prevent  all  of  their  business  going  in  Japanese  ships.  Then 
I  would  have  a  trans-Pacific  line  and  a  South  American  line,  and 
that  is  the  first  thing  I  w^ould  do;  but  it  will  take  a  board  of  that 
kind  eight  months  before  they  can  begin  to  build  one  of  those  ships, 
and  do  it  right.     They  must  study  conditions. 

Mr.  Hardy.  Do  you  not  think  if  the  Government  was  ready  now  to 
buy  $50,000,000  worth  of  ships  that  somewhere  out  of  the  void,  as 
it  were,  somebody  would  organize  and  establish  a  shipbuilding  plant 
to  build  those  ships? 

Mr.  Baker.  Undoubtedly.  I  have  just  spoken  of  one  set  of 
interests  who  are  ready  to  do  it  to-day ;  I  know  of  men  ready  to  do 
it  to-day. 

The  Chairman.  I  heard  one  of  the  largest  shipbuilding  concerns 
in  this  country  say  they  were  ready  and  willing  to  provide  the 
facilities  to  build  the  battleships. 

Mr.  Baker.  Certainly. 

The  Chairman.  And  I  do  not  know  why,  if  they  would  enlarge 
their  facilities  to  buiid  battle  ships,  they  would  not  enlarge  their 
facilities  to  build  merchant  ships. 

Mr.  Edmonds.  We  have  plenty  of  room  at  League  Island  for  more 
ways. 

Mr.  Hardy.  It  seems  to  me  this  bill  w^ould  stimulate  at  once  the  en- 
largement of  our  shipbuilding  facilities. 

Mr.  Baker.  Undoubtedly. 

Mr.  Edmonds.  While  you  are  on  China,  I  want  to  ask  you  a  ques- 
tion ;  I  want  to  get  a  little  wider  view^  of  this  thing,  and  I  would 
like  to  get  your  ideas  on  it.  I  am  going  to  talk  about  subsidies,  if 
Mr.  Hardy  leaves  me  alone  for  a  few  minutes;  I  am  a  little  afraid  of 
Mr.  Hardy. 

Mr.  Hardy.  Suppose  you  do  not  talk  about  subsidies,  then. 

Mr.  Baker.  May  I  interrupt  you,  Mr.  Edmonds.  When  this  same 
question  was  brought  up,  I  think  it  was  in  1843,  in  the  British  Par- 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      631 

liament,  I  think  it  was  Lord  Burns,  although  I  will  not  be  sure  about 
it,  said,  "  Gentlemen,  '  subsidy '  has  an  unpleasant  sound ;  let  us  call 
it  'for  services  rendered.'"  And  the  grant  was  made  and  they  then 
formed  the  Cunard  Steamship  Co.  I  have  forgotten  the  exact  figures, 
but  if  you  were  to  take  one  of  her  big  fast  steamers  to-day  on  the 
same  basis  of  the  first  ship,  she  would  have  paid  for  herself  every 
voyage  in  the  service  rendered  alone. 

Mr.  Edmonds.  You  know  we  do  not  have  those  diplomatic  pleasan- 
tries here  that  they  have  over  in  England.  Here  we  have  to  call  a 
subsidy  something  else,  even  in  a  bill  like  this. 

Mr.  Baker.  I  am  not  afraid  of  it  in  the  least. 

Mr.  Ed:\[onds.  I  want  to  call  your  attention  to  bring  out  just  a 
concrete  case,  and  I  w-ant  to  have  you  give  me  your  ideas  on  it.  'J'here 
is  a  line  being  formed — I  do  not  know  wdiether  it  is  running  to-da) 
or  not — to  run  between  here  and  China. 

Mr.  Baker.  Yes. 

Mr.  Edmonds.  It  is  being  formed  to  run  between  here  and  China, 
and  it  may  be  running  to-day,  and  the  Chinese  Government  have 
backed  this  company  up  W' ith  a  certain  amount  of  bonds. 

Mr.  Baker.  They  have  guaranteed  the  principal  of  the  bonds. 

Mr.  Edmonds.  Guaranteed  the  principal  and  interest  on  those 
bonds. 

Mr.  Baker.  I  am  thoroughly  familiar  with  the  whole  transaction. 

Mr.  Edmonds.  That  same  line  would  be  very  glad  to  come  in  here 
and  get  some  of  these  boats  from  the  Government,  I  believe,  on  a 
cheaper  basis. 

Mr.  Baker.  Yes. 

Mr.  Edmonds.  Now,  if  we  subsidize,  could  we  not  make  arrange- 
ments between  these  different  countries,  for  instance,  betw'een  here 
and  Brazil  and  betw^een  here  and  Chile,  by  which  their  Government 
would  pay  a  proportionate  price  for  mail  subventions — if  that  is 
more  pleasant  than  "  subsidy  " — and  we  would  pay  a  proportionate 
price  for  mail  subventions,  and  between  the  two  of  us  have  lines  run- 
ning in  all  directions  on  that  basis? 

Mr.  Baker.  Undoubtedly.    And  they  are  inviting  you  to  do  it. 

Mr.  Edmonds.  They  are  inviting  us  to  do  it;  but  there  is  nothing 
in  this  bill  that  would  give  the  board  the  privilege  of  doing  any- 
thing of  that  kind,  unless  it  was  done  through  Government  owner- 
ship ? 

Mr.  Baker.  Yes.  I  do  not  think  it  is  limited  to  Government 
ownership.  I  do  not  see  w'hy  the  Government  should  not  negotiate 
through  this  boaixl.  which  will  represent  the  Government  in  the  bill, 
if  you  pass  it.  Avith  those  countries — in  fact,  I  think  that  is  one  of 
their  ])rincipal  duties,  and  one  of  the  reasons  why,  never  having 
had  what  I  might  call  a  "  department  of  marine,"  to  meet  other  na- 
tions in  developing  their  marine  in  the  same  way,  is  why  we  have 
not  gone  forAvard.  Judge  Alexander  knows  that  very  well  from 
visiting  at  London  and  meeting  the  board  of  trade.  In  England 
they  have  a  board  of  trade,  and  Sir  Walter  Eunciman  is  a  member 
of  the  cabinet;  and  in  France  the  same  way,  and  in  Japan  the  same 
way. 

And  I  Avant  to  say  that  I  think  Judge  Alexander's  bill  is  the  very 
best  general   compromise  under  existing  conditions — and  I  say  it 


632      SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

with  all  due  respect — I  think  he  has  a  broader  knowledge  and  un- 
derstanding of  this  question  than  any  men  whom  I  meet  here  in 
either  the  Senate  or  the  House.  Pie  has  been  over  to  Europe  and 
studied  it,  and  he  knows  the  conditions  there,  and  he  has  sat  here 
so  long  it  is  a  wonder  to  me  he  is  not  thoroughly  disgusted  with  some 
of  the  testimony. 

Mr.  CuKRY.  He  takes  a  big  interest  in  it  and  he  knows  a  great  deal 
about  it,  and  wants  to  do  what  is  right. 

Mr.  Edmonds.  While  you  are  bringing  up  that  question,  I  suppose 
your  idea  would  be  to  have  this  board  officially  authorized  to  change 
subvention  lines  and  you  would  give  them  that  libert}'  to  make  these 
agreements  with  these  other  countries? 

Mr.  Baker,  Yes. 

Mr.  Edmonds.  Would  they  do  that  for  a  private  line,  though; 
could  they  do  that  for  a  private  line?    I  suppose  they  could. 

Mr.  Baker.  I  do  not  know  of  any  reason  why  they  could  not. 
They  would  have  to  submit  to  the  State  Department,  just  as  much 
so  as  the  Interstate  Commerce  Commission  or  preferential  rates, 
and  so  on;  they  are  under  your  jurisdiction  and  they  have  to  justify 
their  acts.  If  they  do  not,  you  will  promptly  get  rid  of  them  and 
get  some  men  who  will  do  what  is  for  the  best  interests  of  the 
country. 

Mr.  Curry.  You  know  a  couple  of  3^ears  ago  the  Post  Office  De- 
partment gave  a  contract  for  carrying  the  mails  to  a  Japanese  line 
because  it  saved  three  or  four  hundred  dollars  ? 

Mr.  Baker.  Yes. 

Mr.  Edmonds.  It  did  not  give  the  contract,  because  it  contended 
with  the  Pacific  Mail,  but  it  allowed  the  Japanese  boats  to  carry  the 
mail. 

Mr.  Baksr.  Yes. 

Mr.  Edmonds.  That  is  what  happened. 

Mr.  Baker.  The  same  thing,  in  a  roundabout  way. 

Mr.  Edmonds.  I  wrote  to  the  Postmaster  about  it,  and  he  returned 
my  letter  and  said  he  was  working  for  economy  in  the  department 
and  did  not  care  anything  about  any  other  department.  That  is 
practically  what  he  said. 

Mr.  Curry.  I  am  not  blaming  anyone  at  all;  I  am  simply  speak- 
ing of  the  policy,  that  we  ought  to  be  protecting  our  merchant  ma- 
rine, even  if  it  does  cost  a  few  dollars. 

Mr,  Edmonds.  That  is  what  the  bill  of  1891  was  passed  for,  to  help 
the  merchant  marine  along;  and  he  simply  nullified  the  action  of 
Congress. 

Mr.  Curry.  You  spoke  about  the  purchase  of  the  China.  My  un- 
derstanding was  that  21  Chinam.en  bought  that  boat  and  paid 
$287,000  for  her. 

Mr.  Baker.  I  do  not  know  all  the  conditions.  I  was  in  the  Mer- 
chants' Exchange  Building,  San  Francisco,  and  a  member  just  men- 
tioned it  casually  and  said  it  had  been  donated  by  what  they  called 
the  four  companies — by  an  assessment  of  the  Chinese  residents  of 
California. 

Mr.  Curry.  The  six  companies. 

Mr.  Baker.  It  might  be,  and  they  went  down  to  even  servant  men. 
who  contributed  from  $5  up  to  $500,  and  then  the  merchants,  and  that 
it  was  bought  in  that  way. 


SHIPPING  BOARD,  NAVAL  ALIXJJ.IARY,  AND  MERCHANT  MARINE.      633 

Mr.  Curry.  It  is  possible  that  may  have  been  true,  but  still  the 
purchase  was  made  directly  by  21  Chinamen. 

Mr.  Baker.  Yes. 

Mr.  Edmonds.  It  was  reported  that  21  Chinamen  bought  the 
China  for  $287,000. 

Mr.  Baker.  An  enormous  price  for  the  ship ;  it  ought  to  have  been 
on  the  scrap  heap. 

Mr.  Edmonds.  That  is  very  true. 

The  Chairman.  But  it  was  a  good  purchase  under  the  circum- 
stances ? 

Mr.  Baker.  Yes. 

Mr.  Edmonds.  All  ships  bring  enormous  prices  now, 

Mr.  Baker.  There  are  just  two  suggestions  I  would  like  to  make. 
You  have  in  here  a  most  valuble  table  worked  up  by  Mr.  Boule,  a 
man  of  wide  experience  in  the  steamship  business,  and  tables  from 
Secretary  Redfield,  and  my  suggestion  is  that  you  take  all  such  tables 
and  put  them  in  a  separate  appendix  in  a  way  that  they  are  easy 
to  get  at  with  proper  references  to  them  and  it  would  facilitate  the 
consideration  of  the  hearings  very  much. 

The  Chairman.  Of  course,  when  we  come  to  the  final  publication  of 
the  hearings,  we  can  arrange  them  in  any  way  we  please  and  have 
them  indexed,  very  much  like  the  hearings  on  the  shipping  trust. 

Mr.  Baker.  I  was  only  thinking  that  to  separate  the  statistical  in- 
formation Avould  be  a  great  help  to  the  people  who  are  studying  this 
subject. 

The  Chairinian.  To  put  them  in  an  appendix? 

Mr.  Baker.  Yes.  Then  before  I  close  I  want  right  here  to  say 
publicly  that  the  other  day  I  heard  Secretary  McAdoo's  testimony 
and  I  want  to  thank  him  for  his  keen  and  intelligent  and  unselfish 
work  and  interest  in  encouraging  me  to  try  to  arrive  at  what  he 
believes  to  be  the  best  interests  of  this  country.  I  have  been  down 
in  Washington  through  all  of  the  different  administrations  beginning 
away  back  with  President  McKinley  and  I  have  never  seen  anyone 
who  took  the  same  keen,  unselfish  interest  in  trying  to  find  out  hon- 
estly in  the  different  suggestions  I  made  to  him  the  best  interest  of 
the  country^ — we  did  not  always  agree,  not  by  any  means,  but  I  found 
him  reasonable  and  willing  to  meet  them  at  different  times;  and  I 
just  Avant  to  take  this  little  opportunity,  with  your  permission,  of 
having  this  go  into  the  minutes. 

Mr.  RoDENBERG.  It  ouglit  to  go  in. 

Mr.  Curry.  We  want  to  have  it  go  in. 

The  Chairman.  Just  one  question  about  the  purchase  of  ships. 
You  mentioned  a  matter  just  a  moment  ago.  In  connection  with  the 
bill  which  was  pending  in  Congress  in  1914,  what  was  known  as  the 
ship-purchase  bill,  of  course  there  has  been  much  discussion  about 
whether  or  not  there  were  a.Tiy  vessels  available  then  to  be  purchased. 
That  was  in  September,  1914,  when  that  bill  was  introduced  in  the 
House.  You  will  recall  at  that  time  the  German  cruisers  were  very 
active  in  the  Atlantic  and  Pacific  and  conditions  in  the  British  mer- 
cantile marine  I  know  were  rather  panicky.  Now,  what  is  the  fact 
about  whether  or  not — I  am  not  speaking  about  German  interned 
ships — we  could  have  bought  any  ships?  If  the  Germans  should 
carry  out  their  present  policy  of  sinking  merchant  vessels,  that  is, 
renew  the  activities  of  their  submarines,  it  has  been  a  question  in  my 


634      SHIPPING  BOAUI),  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE, 

mind  if  the  effect  would  not  be  to  diminish  the  cost  of  British  ton- 
nage or  the  tonnage  of  the  allies — the  British  ships,  the  French  ships, 
and  the  Italian  ships. 

Mr.  Baker.  Very  probably,  Judge  Alexander.  But  as  I  said,  I 
do  not  want  to  make  any  predictions  about  what  will  happen  even 
to-morrow.  But  here  is  a  whole  lot  of  evidence  on  that  question. 
On  December  22,  1914,  for  instance,  here  are  a  couple  of  ships  which 
were  offered,  which  I  submitted  to  you  at  that  time.  These  were  the 
Ohio  and  the/lw^(://'6as(  ?),large  ships,  .597,000  cubic  feet,  which  would 
mean  about  6,000  tons  gross;  and  the  other  was  580,000  cubic  feet,  or 
about  5,800  tons.  They  were  passenger  boats.  Then  here  are  some 
others.  There  were  a  great  many  offered ;  I  have  a  big  list  here  of 
boats  offered  from  all  over  the  country.  And  in  reply  to  a  great 
many  Senators  at  that  time  I  showed  them  these  lists  of  ships  that 
could  be  acquired  without  any  question  as  to  their  nationality — I 
mean  no  German  interned  ships — which  would  cause  any  complica- 
tions. 

Then  the  question  came  up  at  that  time  whether  there  would  be 
great  delays  in  loading  and  unloading  the  ships,  and  so  on.  Here  is 
one  letter  right  here,  February  8.  1915,  and  here  is  another,  February 
9,  1915.  You  see,  that  was  after  the  beginning  of  the  war,  before  the 
ship-jDurchase  bill  had  been  decided. 

We  could  get  ships;  it  was  simply  a  matter  of  price.  Our  Govern- 
ment must  get  the  English  Government  to  sanction  the  transfer  if 
English. 

Mr.  Curry.  All  the  great  maritime  nations  except  the  United 
States  now  prohibit  the  transfer  of  ships  to  a  foreign  flag,  do  thev 
not? 

Mr.  Baker.  Every  one  of  them  without  their  consent  and  approval 
of  buyer. 

Mr.  Curry.  So  we  could  not  buy  any  foreign  ships  now  ? 

The  Chairman.  That  was  not  true  at  that  time. 

Mr.  Curry.  No. 

Mr.  Baker.  Here  were  three  ships,  ih^Colomhia^  the  Ecuador^xw'^ 
Venezuela — splendid  big  passenger  ships  that  Capt.  Dollar  was 
going  to  buy,  since  reported  purchased  by  Grace  &  Co..  New  York. 
And  then  here  is  another  list  of  ships  under  British  register. 

The  Chairman.  About  how  many  tons  of  ships? 

Mr.  Baker.  It  would  have  taken  all  the  money  you  had  at  that 
particular  time.  They  are  all  here,  but  I  have  never  figured  up  the 
tonnage.  And  here  are  all  the  prices  of  the  ships.  Most  of  these  are 
English  ships  in  this  particular  list— $625,000,  $375,000,  $.342,000,  and 
$350,000,  and  so  on. 

(The  list  referred  to  may  l>e  found  beginning  on  page  375  of  hear- 
ings.) 

Mr.  Edmonds,  That  Avas  a  couple  of  years  ago,  was  it  not,  Mr. 
Chairman. 

The  Chairman.  Yes;  that  is  true. 

Mr.  Baker.  T  found  among  these  lists  some  that  were  German 
interned  ships.  I  did  not  think  it  was  wise  even  to  consider  the 
suggestion  of  buying  them.  You  know  that  matter  was  fully  investi- 
gated by  Senator  Walsh's  committee  innnediately  after  the  German 
cruisers  came  in. 


SUJPPING   BOAIU),  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      635 

The  CjiAiitMAN.  Those  ships  were  all  for  sale  before  Mr.  Morse's 
company  sequestrated  the  balance  of  the  ships. 

Mr.  Baker.  They  were  all  sold  long  ago. 

Mr.  Curry.  Even  though  (Termany  would  sell  her  interned  ships, 
which  she  would  not,  we  would  not  be  authorized  and  justified  under 
international  law  in  buying  them,  and  the  transfer  would  not  be 
recognized  as  legal. 

Mr.  Baker.  I  beg  your  pardon? 

Mr.  Curry.  I  sa}'  even  if  Germany  would  sell  her  interned  ships, 
which  she  will  not 

Mr.  Baker.  Yes. 

Mr.  Curry.  We  would  not,  under  international  law,  be  justified 
in  buying  them,  and  Great  Britain,  France,  and  other  countries 
would  not  recognize  the  transfer  as  legal  in  time  of  war. 

Mr.  Baker.  Certainly  not.  You  could  not  expect  them  to  do  it, 
and  I  am  surprised  that  any  man  should  think  such  a  thing  was 
considered  for  a  moment. 

Mr.  Curry.  A  transfer  of  that  kind  must  occur  at  least  30  days 
before  the  declaration  of  war  to  be  recognized. 

Mr.  Baker.  Certainly.  That  was  accepted,  I  think,  by  all  the 
nations  except  England.    They  did  not  sign  that,  did  they? 

Mr.  Curry.  And  it  must  be  a  bona  fide  transfer. 

Mr.  Baker.  But  England  did  not  sign  it. 

The  Chairman.  The  French  law  is  much  more  rigid  than  the 
English  law  in  that  regard. 

(Thereupon,  at  4  o'clock  p.  m.,  the  hearing  was  adjourned  until 
Thursday,  March  2.  1916,  at  10  o'clock  a.  m.) 


CREATING  A  SHIPPING  BOARD,  A  NAVAL  AUXILIARY,  AND  A 
MERCHANT  MARINE. 


Committee  on  the  JVIerchant  Marine  and  Fisheries, 

House  of  Representatives, 
Thursday,  March  2, 1916. 
The  committee  met  at  10  o'clock  a.  m.,  Hon.  Joshua  W.  Alexander 
(chairman)   presiding. 

Mr.  Edmonds.  Mr.  Chairman,  I  have  here  a  protest  by  the  Phila- 
delphia  Maritime   Exchange  against  the   passage  of  H.   R.   10500. 
which  I  would  like  to  have  incorporated  in  the  record. 
(The  paper  above  referred  to  is  as  follows:) 

The  Philadelphia  Maritime  IiIxchange. 

PROTEST    against    THE    PASSAGE    OF    RILL    H.    R.     lOr.OO,    PROVIDING    FOR    GOVERNMENT 
OWNERSHIP    AND   OPERATION    OF    MERCHANT   VESSELS. 

To   the   lionorahJe   the   Senate   and   House   of  RrpreKentatives   of   the   United 

StatcH  in  Congress  assernhled: 

This  memorial  of  tlie  Pliiladelphia  Maritime  Exchange  respectfully  repre- 
sents: That  a  bill  (H.  R.  10.5001  having  for  its  object  the  encouragement,  de- 
velopment, and  creation  of  a  naval  auxiliary  aiifl  naval  reserve  and  a  merchant 
marine  to  meet  the  re(|uirements  of  the  commerce  of  the  United  States  with  its 
territories  and  possessions  and  with  foreign  countries,  and  for  other  purposes, 
is  at  the  present  time  being  considered  in  the  Congress  of  the  United  States. 

This  bill  propo.ses  the  creation  and  establishment  of  a  national  shipping  board 
to  consist  of  the  Secretary  of  the  Navy,  the  Secretary  of  Commerce,  and  three 
civilians,  one  of  whom  shall  be  chairman  of  the  board,  to  be  appointed  by  the 
President  for  terms  of  two,  four,  and  six  years,  respectively. 

The  shipping^  board  so  con.stituted  is  to  have  authority  to  build  or  charter 
vessels  suitable  for  naval  auxiliaries  or  Army  transports,  with  a  view  to 
chartering,  leasing,  or  selling  such  vessels  to  citizens  of  the  United  States  de- 
siring to  use  them  in  the  transportation  of  the  commerce  of  the  United  States 
with  foreign  countries  or  with  the  territories  and  possessions  of  the  United 
States,  and  for  this  purpose  the  Secretary  of  the  Treasury  is  authorized  to  sell 
available  bonds  of  an  issue  previously  authorized  by  Congress  in  connection  with 
the  construction  of  the  Panama  Canal,  in  an  amount  not  exceeding  .$50,000,000. 

The  bill  carries  authority  for  the  President  to  transfer  to  the  board  of  naval 
auxiliaries  for  charter,  lease,  or  sale  to  private  parties,  to  be  used  either  in  the 
coastwise  or  over-sea  trade. 

Authority  is  conveyed  to  the  board  to  regulate  the  operation  of  all  corpora- 
tions, firms,  and  individuals  engaged  as  common  carriers  in  the  transportation 
of  passengers  and  property  by  water  between  ports  of  the  United  States,  and 
not  entirely  within  the  limits  of  a  single  State,  and  between  the  United  States 
and  foreign  countries,  as  well  as  between  the  United  States  and  its  Terri- 
tories and  possessions,  and  to  determine  and  prescribe  rates  and  charges  for 
the  transportation  of  said  passengers  and  property ;  and  it  further  gives  to  the 
board  authority  to  prescribe  preferential  rates,  if  in  its  judgment  such  rates 
are  desirable  to  carry  out  the  purpose  of  the  act. 

637 
32910—16 41 


638      SHTPriNG  BOARD,  NAVAL  AUXII.IARV,  AND  MERCHANT  MAHINE. 

Section  10  of  the  bill  prohibits  the  transportation  of  passengers  and  property 
by  water  between  ports  of  the  United  States  not  entirely  within  the  limits  of 
a"  single  State,  or  between  the  United  States  and  foreign  countries  or  between 
the  United  States  and  its  territories  and  possessions,  without  tirst  obtaining  a 
license  from  the  board. 

The  Philadelphia  Maritime  Exchange  urgently  i)rotests  against  the  proposed 
measure  being  enacted  into  law  for  the  following  reasons : 

First.  The  proposed  legislation  would  place  the  Government  in  direct  and 
unfair  competition  with  a  large  number  of  American  citizens  who,  with  invest- 
ments of  many  millions  of  dollars,  are  engaged  in  a  business  essentially  private 
in  character  and  readily  controllable  both  by  competition  and  governmental 
regulation.  No  private  enterprise  however  capably  and  economically  admin- 
istered, where  the  management  is  accountable  to  its  stockholders,  can  possibly 
compete  with  the  Government  in  the  same  industry  where  there  is  no  such 
accountability. 

Second.  It  is  a  well  established  fact  that  the  principal  foreign  nations  have 
prohibited  the  sale  of  vessels  operating  under  their  flags,  and  it  is  a  m;itter  of 
general  knowledge  that  American  shipyards  have  already  made  contracts  which 
will  tax  their  capacity  to  the  utmost  for  the  next  two  or  three  years.  These 
conditions  alone  would  render  abortive  for  an  indefinite  period  the  advantages 
which  are  sought  to  be  accomplished  by  the  proposed  legislation. 

Third.  The  effect  of  the  regulation  of  rates  governing  ocean-borne  traffic  by 
the  proposed  shipping  board  would  not  only  be  the  elimination  of  'American 
vessels  from  compc^tition  with  those  of  foreign  registry  in  the  movement  of 
merchandise  to  and  from  American  ports,  but  by  the  certain  refusal  of  foreign 
owners  to  take  out  the  prescribed  license  would  leave  the  products  of  our  own 
country  without  the  means  of  transportation  to  the  markets  of  the  world. 
The  creation  of  a  shipping  board  with  such  plenary  powers,  without  acceptance 
of  the  same  regulation  by  foreign  vessels,  would  sound  the  death  knell  of 
American  shipping. 

Fourth.  Even  if  the  Government  were  now  able  to  acquire  vessels  in  the 
building,  selling,  or  cliartering  markets  the  competition  with  private  enterprise 
thus  created,  plus  the  serious  handicap  with  which  the  American  vessel  owner 
already  has  to  contend,  would  mean  the  early  extinction  of  the  American  ship- 
owner, with  the  consequent  unwarranted  sacrifice  of  individual  effort  and 
capital. 

Fifth.  It  must  be  clear  to  your  honorable  bodies  that  there  exists  no  lack  of 
enterprise  or  willingness  on  the  part  of  the  American  people  to  invest  their 
capital  in  almost  unlimited  volume  where  there  is  reasonal)le  promise  of  a  fair 
return  on  the  investment.  With  regard  to  the  upbuilding  of  our  merchant 
marine,  tljerefore,  Congress  should  encourage,  not  discourage,  the  first-named 
trait  in  our  national  character,  and  support  the  second  by  enacting  legislation 
which  will  not  only  remove  the  serious  obstacles  caused  by  existing  laws  but 
create  cojiditions  Mhich  will  place  American  vessels  in  a  position  of  reasonable 
competition  with  those  of  other  nations. 

Sixth.  When  this  relief  is  given  private  enterprise  and  capital  may  be  de- 
pended upon  to  promptly  and  liberally  lend  themselves  to  the  creation  of  a 
merchant  marine  capable  of  amply  supplying  the  demands  of  connnerce,  as 
well  as  the  requirements  of  the  Government  for  military  and  naval  purposes. 

Seventli.  Tlie  Philadelphia  Maritime  p]xchange,  while  strongly  advocating 
the  upbuilding  of  the  merchant  marine  of  the  United  States,  regards  the  pro- 
visions of  bill  H.  R.  10500  as  dangerous  in  the  extreme,  and  is  of  the  opinion 
that  the  ownership  and  operation  by  the  Government  of  merchant  vessels  is  a 
backward  rather  than  a  forward  step,  and  will  not  only  discourage  but  destroy 
all  private  initiative  in  the  direction  so  earnestly  desired. 

The  Philadelphia  Maritime  Exchange, 
By  J.  S.  W.  HoLTON,  President. 

Attest : 

[seal.]  S.  R.  Shearwood,  President. 

Philadelphia,  March  1,  1916. 

The  Chairman.  Mr.  Slechta,  of  New  York,  is  here  this  morning 
and  has  expressed  a  wish  to  be  heard.  Give  the  stenographer  your 
name,  address,  and  business  connections,  Mr.  Slechta. 


SHIPPING  BOAED,  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE.      639 

STATEMENT  OF  MR.  JOSEPH  J.  SLECHTA,  OF  NEW  YORK,  NEW 
YORK  AGENT  FOR  THE  BRAZILIAN  STEAMSHIP  CO. 

Mr.  Slechta,  Joseph  J.  Slechta.  My  steamship  connection  is 
the  Brazilian  Steamship  Co.  of  New  York,  of  the  Lloyd-Brazileiro. 
1  also  was  connected  a  short  time  ago  with  Holt  &  Co.,  exporters  of 
flour. 

Mr.  Greece.  Is  this  Lloyd-Brazileiro  owned  by  Brazil? 

Mr.  Slechta.  It  is  owned  by  the  Federal  Government  of  Brazil 
«nd  operated  directly  by  the  Federal  Government. 

Mr.  Greene.  Between  New  York  and 

Mr.  Sleclita.  No,  sir;  the  principal  business  service  of  the  com- 
pany is  in  the  coastwise  trade  of  Brazil,  between  the  various  ports 
of  Brazil.  They  operate  approximately  50  to  55  vessels  in  the 
coastwise  service.  But  for  the  past  eight  years  they  have  operated 
this  special  service  to  New  York  and  New  Orleans. 

The  Chairman.  How  many  vessels  have  you? 

Mr.  Slechta.  The  number  in  the  service  varies.  Previous  to  the 
war  we  had  five  fruit  vessels  in  the  New  York  trade  and  we  were 
supplementing  that  with  a  considerable  number  of  chartered  vessels, 
chartered  by  the  month  or  the  year,  as  the  case  might  be. 

Mr.  Edmonds.  Has  this  always  been  a  Government-owned  line? 

Mr.  Slechta.  No,  sir. 

Mr.  Edmonds.  How  long  has  it  been  a  Government-owned  line? 

Mr.  Slechta.  It  has  been  heavil}'-  subsidized  for— well,  every  since 
it  was  organized. 

Mr.  Bruckner.  How  long  ago  was  that,  Mr.  Slechta?  When  was 
it  organized? 

Mr.  Slechta.  It  dates  back  in  one  form  or  another  for  pretty 
nearh'  40  years. 

Mr.  Edmonds.  It  was  originally  a  private  line,  subsidized? 

Mr.  Slechta.  Yes,  sir. 

Mr.  Edmonds.  How  long  since  the  Government  took  it  over? 

Mr.  Slechta.  It  took  it  over  all  together  in  1912. 

Mr.  Edmonds.  In  1912;  just  three  or  four  years  ago? 

Mr.  Slechta.  Yes,  sir. 

Mr.  Edmonds.  Why  did  they  take  it  over? 

Mr.  Slechta.  Because  they  found  they  had  gotten  so  much  money 
in  it  that  they  owned  it. 

Mr.  RowE.  They  had  loaned  it  money? 

Mr.  Slechta,  Yes,  sir. 

Mr.  Greene.  You  mean  it  was  subsidized  so  heavily? 

Mr.  Slechta.  Yes,  sir;  it  was  subsidized  so  heavily;  and  then  in 
order  to  continue  its  operation  the  Government  was  forced  to  loan 
so  much  money  that  eventually  it  found  the  assets  of  the  company 
were  only  sufficient  to  pay  what  they  had  loaned. 

Mr.  Edmonds.  As  a  matter  of  fact,  in  1912  the  privately-owned 
line  found  itself  up  against  it  and  were  willing  to  sell — they  had  56 
ships.  I  believe,  at  that  time  ? 

Mr.  Slechta.  Yes,  sir. 

Mr,  Edmonds.  And  they  were  willing  to  sell  to  anybody;  is  that 
true  ?     It  was  for  sale  ? 

Mr.  Slechta,  It  was  for  sale. 


640     SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Edmonds.  And  the  Government  found  it  could  not  do  without 
this  line  and  they  did  not  want  the  service  discontinued  and  took  it 
over  ? 

Mr.  Slechta.  As  a  matter  of  fact  the  Government  was  perfectly 
willing  to  sell  it  under  their  own  conditions  and  terms. 

Mr.  Edmonds.  You  don't  mean  at  the  present  time. 

Mr.  Slechta.  At  any  time — not  at  that  time,  but  shortly  after  and 
on  another  occasion. 

The  Chairman.  What  were  the  conditions  to  which  you  have  re- 
ferred ? 

Mr.  Slechta.  In  the  first  place,  the  navigation  laws  of  Brazil  and 
the  conditions  as  to  management,  seamen,  and  so  forth,  are  so  onerous 
that  it  is  difficult  to  operate  a  line  at  a  profit.  And  it  is  very  doubt- 
ful whether  any  foreign  capital  would  take  the  line  and  operate 
it  under  those  conditions,  especially  on  the  coast  of  Brazil.  And,  of 
course,  that  was  one  of  the  conditions,  that  the  line  must  be  operated 
under  the  existing  laws  on  the  coast  of  Brazil. 

The  Chairman.  In  the  coastwise  trade? 

Mr.  Slechta.  Yes,  sir. 
•    The  Chairman.  These  burdens  were  imposed  by  the  Government 
itself  on  its  own  line  ? 

Mr.  Slechta.  Practically  so.    That  is  what  it  amounts  to. 

The  Chair3Ian.  How  many  vessels  were  there,  did  you  say,  that 
were  owned  by  this  private  company — what  is  the  name  of  the  com- 
pany? 

Mr.  Slechta.  The  name  of  the  company  was  the  same  as  it  is  now. 
The  style  of  the  company  is  Lloyd-Brazileiro. 

The  Chairman.  How  long  had  it  lieen  operated  liy  the  private 
company  ? 

Mr.  Slechta.  Up  to  1912.  I  do  not  know  just  exactly  how^  long 
the  company  has  been  operated.  As  I  sa.y.  it  dates  l;ack  between 
30  and  40  years. 

The  Chair:man.  Did  they  pay  subsidies  on  their  shipping  in  the 
coastwise  trade? 

Mr.  Slechta.  Yes,  sir. 

The  Chairman.  In  what  way  and  to  what  extent? 

Mr.  Slechta.  They  gave  them  an  annual  credit,  amounting,  as  I 
recall  it,  to  something  like  $200,000  a  year.  I  would  not  be  at  all 
certain  about  the  amount.  I  was  never  concerned  with  it  particu- 
larly. 

The  Chairman.  $200,000  a  year — and  how  many  vessels? 

Mr.  Slechta.  Large  and  small,  there  were,  as  I  say.  between  50 
and  60. 

Mr.  Greene.  As  I  understood  3'ou,  they  started  with  a  smaller 
number. 

Mr.  Slechta.  Well,  a  long  ways  back. 

The  Chairman.  Were  those  mail  ships  or  mail  and  cargo  vessels? 

Mr.  Slechta.  Vessels  of  every  description;  river  steamers,  coast- 
wise steamers  for  cargo  purposes  only,  others  that  were  very  largely 
for  passenger  accommodations  and  others  part  cargo  and  part  pas- 
senger. 

The  Chairman.  What  is  the  length  of  the  coast  line  of  Brazil? 

Mr.  Slechta.  The  coast  line  of  Brazil  is  considerably  over  5,000 
miles — nearly  6,000  miles. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      641 

The  Chairman.  And  these  vessels  cover  what  ports? 

Mr.  Slechta.  All  of  them. 

The  Chairman.  They  operate  on  a  coast  line  of  about  5,000  miles. 

Mr.  Slechta.  Yes,  sir;  in  addition  to  which 

The  Chairman.  And  entered  and  cleared  from  about  how  many 
ports  in  the  coastwise  trade? 

Mr.  Slechta.  Coast  and  river  ports,  very  close  to  100. 

The  Chairman.  What  rivers  do  they  navigate? 

Mr,  Slechta.  The  Amazon  and  the  Paraguay,  largely.  That  is 
about  all. 

The  Chairman.  And  the  subsidies  amounted  to  about  $200,000 
a  year? 

Mr.  Slechta.  Yes.  I  would  not  be  sure  about  the  amount  of  that 
subsidy. 

The  Chairman.  Did  that  include  mail  pay  to  those  vessels? 

Mr.  Slechta.  The  Government  of  Brazil  does  not  pay  any  mail 
subsidy  at  all.     They  pay  nothing  for  the  mail  service  of  Brazil. 

The  Chairman.  Do  they  cany  the  mails  free? 

Mr.  Slechta.  Yes,  sir.  They  consider  that  certain  privileges 
which  mail  vessels  get  in  the  various  ports  are  in  compensation  for 
carrying  the  mails. 

The  Chairman.  What  are  they? 

Mr.  Slechta.  The  vessels  carrying  the  Brazilian  mail  get  what 
they  call  tlie  packet  rights.  I  do  nf)t  know  that  thev  can  be  valued 
in  dollars  and  cents  exactly.  They  are  shipping  privileges  that  they 
do  not  get  unless  they  carry  the  nail;  in  other  words,  a  reduction 
of  some  charges. 

The  Chairman.  Do  you  know  what  those  are? 

Mr.  Slechta.  No  ;  I  do  not.  As  I  say,  I  have  nothing  to  do  with 
these  services;   my  business  is  entirely  the  New   York  end  of  it. 

The  Chairman.  Then  you  are  not  familiar  with  the  conditions  of 
the  service  in  the  coastwise  trade  you  spoke  of? 

Mr.  Slechta.  Only  so  far  as  it  concerns  our  own  New  York  Line. 

The  Chairman.  Of  course  you  can  make  any  statement  to  the 
committee  you  desire.  I  do  not  know  just  what  you  want  to  say, 
but  you  have  requested  to  be  heard. 

Mr.  Slechta.  I  just  returned  from  a  visit  through  Brazil,  having 
spent  the  better  part  of  two  months  in  various  parts  of  Brazil  and, 
being  interested  in  an  export  business  as  well  as  in  the  steamship 
business.  I  thought  possibly  the  committee  might  care  to  ask  me 
questions  and  possibly  have  any  information  I  may  be  able  to  give 
them  concerning  Brazilian  business  in  particular  and  South  Ameri- 
can business  in  general.  Personally  I  have  always  had  the  feeling 
that  not  only  in  connection  with  this  movement  now  being  agitated 
with  reference  to  a  merchant  marine,  but  the  foreign  trade  and  in 
general  South  American  matters  have  been  very  much  overem- 
phasized. 

The  Chairman.  In  what  respect?  Do  you  mean  to  say  there  is 
no  trade  to  South  America  worth  anything? 

Mr.  Slechta.  No;  I  do  not  mean  there  is  none;  but  I  mean  the 
possibilities  of  increasing  the  trade  are  very  much  overestimated. 

The  Chairman.  By  whom? 

Mr.  Slechta.  Bv  the  United  States. 


642      SHlPriNG  EOAKD,  NAVAL  AUXILIARY^  AND  MERCHANT  MAltlNE. 

Mr.  RoDENBERG.  What  is  the  total  foreign  trade  of  South  America, 
approximately?     It  is  about  $2,000,000,000,  is  it  not? 

Mr.  Slechta.  The  total  foreign  trade,  exports  and  imports,  from 
all  countries  in  South  America? 

Mr.  RoDENBERG.  Yes. 

Mr.  Slechta.    Yes;  approximately  $2,000,000,000. 

Mr.  RoDENBERG.  What  per  cent  of  that  do  we  get  now  ? 

Mr.  Slecpita.  We  get  about  30  per  cent. 

Br.  Bruckner.  How  much? 

Mr.  Slechta.  Thirty  per  cent. 

Mr.  Rodenberg.  No;  I  thought  we  were  getting  less  than  10  per 
cent. 

Mr.  Edmonds.  You  mean,  we  buy  from  them? 

Mr.  Rodenberg.  Yes. 

Mr.  Slechta.  Yes;  if  you  figure  it  that  way.  Of  course,  our 
exports  to  South  America  amount  to  about  10  per  cent  of  the  exports 
and  imports,  but  amount  to  a  whole  lot  more  than  10  per  cent  of 
their  imports. 

Mr.  Edmonds.  You  want  to  talk  of  the  Brazilian  trade.  We  buy 
about  250,000  tons  of  coffee  a  year  from  Brazil,  do  we  not,  in  this 
country  ? 

Mr.  Slechta.  I  can  give  the  Brazilian  figures,  approximately. 
Our  imports  from  Brazil  amount  prettv  closely  to  $100,000,000.  They 
vary  from  $80,000,000  to  $100,000,000.' 

Mr.  Edmonds.  We  buy  $100,000,000  worth  of  coffee? 

Mr.  Slechta.  Coffee  and  rubber. 

Mi'.  Edmonds.  The  rubber  was  twenty-five  to  thirty. 

Mr.  Slechta.  More  than  twenty-five;  from  "$80,000,000  to 
$120,000,000. 

INIr.  Edmonds.  And  that  200,000  tons  of  coffee  and  15.000  to  20,000 
tons  of  rubber  is  carried  in  what  kinds  of  ships? 

Mr.  Slechta.  All  kinds  of  ships. 

Mr.  Edmonds.  Mostly  English? 

Mr.  Slechta.  I  would  not  say  that  at  the  present  time.  It  is 
largely  carried  in  our  ships. 

Mr.  Edmonds.  You  mean  in  your  Lloyd-Brazilian  ships? 

Mr.  Slechta.  Yes. 

Mr.  Greene.  What  competition  do  you  meet  with  there? 

Mr.  Slechta.  In  the  steamship  business? 

Mr.  Greene.  Yes;  you  sa}^  the  Government  owns  this  line.  What 
competition  do  you  have? 

Mr.  Slechta.  In  normal  times  we  have  competition  with  the  regu- 
larly established  lines — they  are  all  British  lines — and  formerly  with 
the  Hamburg-American  Line. 

Mr.  Rodenberg.  Following  up  the  chairman's  suggestion  there,  I 
would  like  to  have  you  explain  what  you  mean  by  saying  that  the 
importance  of  the  trade  to  South  America  is  overemphasized? 

Mr.  Slechta.  I  will  repeat,  in  a  brief  way,  exactly  what  I  said. 
In  the  early  stages  of  the  present  war  the  papers  and  magazines  and 
organizations  were  going  wild  over  the  possibilities  of  capturing,  as 
they  called  it,  the  trade  of  South  America.  And  I  had  a  series  of 
articles — a  very  small  series — in  the  Journal  of  Commerce  of  New 
York,  in  which  I  said,  as  early  as  the  latter  part  of  August  of  the 
year  that  the  war  began,  that  the  war  would  bring  us  practically  no 


SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      643 

advantages  in  trade  whatever  with  South  America.  And  the  facts 
have  borne  out  the  correctness  of  my  prediction.  The  trade  with 
Brazil  for  1915,  except  for  the  fact  that  their  imports  from  Europe 
were  very  much  reduced,  necessarily,  was  smaller  than  our  trade  in 
1912  or  1913,  I  am  not  sure  which.  But  immediately  before  the 
war 

Mr.  Edmonds.  What  were  the  imports  from  Brazil  in  1915? 

Mr.  Slechta.  It  is  difficult  for  me  to  give  you  these  figures  accu- 
rately from  memory,  but  in  1915  our  im])orts  from  Brazil  were 
larger  because  we  took  a  larger  share  of  their  hides  and  cocoa  than 
formerly. 

Mr.  Edmonds.  Our  imports  in  1911  Avere  $100,867,184,  according 
to  a  chart  I  have  here  and  which  was  prepared  about  that  time. 

?*Ir.  Slechta.  Yes. 

Mr.  Edmonds.  What  were  the  exports  from  the  United  States  in 
1915? 

Mr.  Slechta.  The  exports  from  the  United  States  in  1915  have 
been  figured  at  $84,000,000. 

Mr.  Edmonds.  They  were  $27,150,672  in  1911. 

Mr.  Slechta.  Yes ;  but  they  were  more  in  1912  and  1913. 

Mr.  RoDENBEKG.  More  in  1912  than  in  1915? 

Mr.  Slechta.  Yes;  they  were  more.  In  one  of  those  years  our 
exports  to  Brazil  were  larger  than  in  the  vear  immediately  closed — 
1915. 

Mr.  Rodenbekg.  That  is  rather  surprising.  And  you  say  the  ex- 
ports from  European  countries  to  Brazil  had  fallen  off  naturally  on 
account  of  the  war,  and  it  has  not  increased  our  exports  to  Brazil. 

Mr.  Slechta.  No,  sir. 

Mr.  Rodexberg.  The  imports  to  the  United  States  from  Brazil 
were  larger  in  1915,  and  the  exports  were  less  in  1915  than  they  were 
in  1912? 

Mr.  Slechta.  Yes,  sir. 

Mr.  Rowe.  That  is  surprising. 

Mr.  Greene.  Where  do  you  get  your  material  that  you  used  to  get 
from  here?  You  say  the  business  was  shut  off  across  the  water  on 
account  of  the  war. 

Mr.  Slechta.  The  importation  in  Brazil  of  a  great  many  things 
has  been  curtailed;  in  the  first  place,  by  the  financial  stringency 
caused  by  the  war  and  the  inability  of  the  consumer  to  buy  Avhat  he 
wanted. 

Mr.  Greene.  That  is,  you  have  had  financial  trouble  there? 

Mr.  Slechta.  I  would  not  say  we  have  had  financial  trouble,  but 
simply  a  reduced  capacity  to  purchase. 

The  Chairman.  That  is  true  in  Brazil? 

Mr.  Slechta.  It  is  true  in  almost  all  parts  of  South  America. 

The  Chairman.  Yes;  they  have  not  the  same  ability  to  purchase. 

Mr.  Slechta.  It  was  inevitable  as  a  result  of  the  war,  because  their 
financial  arrangements  have  always  been  with  European  countries. 
The  financial  investments  of  European  countries  are  very,  very  great. 

The  Chairman.  Verj'^  well;  we  are  projecting  branch  banks  to 
South  America  ourselves  now  with  a  view  to  meeting  the  conditions, 
are  we  not? 

Mr.  Slechta.  Yes;  but  it  takes  more  than  the  establishment  of 
banks. 


644     SHIPPING  BOAED,  NAVAI.  AUXILIARY,  AND  MERCHANT  MARINE, 

The  Chairman.  That  is  just  one  moans. 

Mr.  Slechta.  It  means  the  intending  investor  can  get  a  better 
line  of  investments  in  South  America  than  he  can  efse where,  of 
which  the  investor  in  the  United  States  to-day  is  not  convinced. 

The  Chairman.  How  about  the  facilities  of  transportation  then 
as  compared  with  now ;  that  is,  the  facilities  before  the  war  compared 
with  1915? 

Mr.  Slechta.  The  facilities  have  been  very  largely  disarranged 
and  disrupted  there,  the  same  as  they  have  in  all  parts  of  the  world. 

The  Chairman.  That  is  another  element.  Then  what  is  the  dif- 
ference in  the  freight  rates? 

Mr.  Slechta.  The  freight  rates  are  very  much  higher. 

The  Chairman.  Would  that  affect  the  commerce  between  this 
country  and  South  America  ?  In  the  first  instance,  you  have  their 
limited  ability  to  buy  on  account  of  the  general  financial  stringency 
and  then  the  lack  of  tonnage  and  the  enormously  increased  freight 
rates — that  would  all  more  or  less  demoralize  commerce,  would  it 
not? 

Mr.  Slechta.  There  is  no  question  about  it. 

Mr.  Greene.  Does  this  company  that  is  owned  by  the  Government 
get  very  largely  increased  rates? 

Mr.  Slechta.  I  was  just  coming  to  that.  I  wanted  to  give  you 
some  figures  which  will  show  you  with  reference  to  that  very  com- 
pany. In  1915 — I  took  these  figures  from  a  certified  accountant's 
report  on  our  books  for  1915 — we  had  37  sailings  of  cargo  steamers 
which  had  been  berthed  in  Xew  York.  They  received  general  cargo 
and  the  sailings  were  for  Brazilian  ports.  The  gross  receipts  for 
general  cargo  amounted  to  $1,513,000. 

The  Chairman.  For  freight? 

Mr.  Slechta.  Yes.  The  total  tonnage  of  general  cargo  carried 
was  approximately  150,000  tons, 

Mr.  Ed:sionds.  Exports  from  New  York? 

Mr.  Slechta.  Exports  from  New  Yoi-k.  During  that  same  period 
we  chartered  outside  vessels 

Mr.  Hardy.  What  year  was  that? 

Mr.  Slechta.  1915.  During  that  same  period.  1915,  we  dispatched 
to  Brazil,  to  the  several  Brazilian  ports,  a  total  of  57  cargoes  of 
coal  for  our  own  uses  in  Brazil.  In  other  Avords.  that  was  merchan- 
dizing business  which  our  New  York  office  did  for  the  Lloyd- 
Brazileiro. 

The  Chairman.  While  you  are  agent  for  the  Lloyd-Brazileiro 
you  also 

Mr.  Slechta  (interposing).  Act  as  purchasing  agent  for  that  coal 
and  other  things  that  we  buy  for  them. 

Mr.  En?.ioJsDs.  Wliere  had  vou  purchased  this  coal  before — Eng- 
land? 

ISIr.  Slechta.  From  England.  There  were  57  cargoes  of  coal 
largely  on  American  vessels,  aggregating  a  total  of  155,000  tons. 

The  Chairman.  What  did  that  coal  cost  you  here  at  tidewater? 

Mr.  Slechta.  That  coal  cost  us  in  the  neighborhood  of  $2.80  a 
ton. 

The  Chairman.  And  what  did  it  cost  delivered  in  Brazil? 

Mr.  Slechta.  Approximately  $10.  . 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      645 

The  Chairman.  What  did  that  coal  cost  yon  in  normal  times,  before 
the  war? 

Mr.  Slechta.  In  normal  times  they  bought  English  coal,  Cardif 
coal,  at  an  average  price  of  probably  $7.50  a  ton. 

The  Chairman.  You  mean  delivered? 

Mr.  Slechta.  Delivered.  That  represents  a  price  of  about  $3.50 
to  $4  a  ton,  f.  o.  b.  in  the  Welch  port  and  of  course  a  relatively  much 
reduced  freight  rate. 

The  Chairman.  What  did  that  cost  delivered  on  board  ship  in 
England? 

Mr.  Slechta.  That  is  what  I  say— $3.50  to  $4  a  ton. 

The  Chairman.  A  difference  of  $1. 

Mr.  Slechta.  At  least  50  cents. 

The  Chairman.  In  the  cost. 

Mr.  Slechta.  The  Cardif  coal  costs  at  least  50  cents  more;  it  usu- 
ally costs  a  dollar  a  ton  more. 

The  Chairman.  And  what  is  the  difference  in  the  distance? 

Mr.  Slechta.  The  distance  is  approximately  the  same.  But  if  you 
will  pardon  me.  the  point  I  was  making  is  this,  if  we  deduct  from  the 
total  of  the  freight  we  collect  in  forwarding  cargo  from  New  York, 
which  I  said  w^as  about  a  million  and  a  half,  the  expense  of  handling 
that  cargo,  stevedoring  in  Brazilian  ports,  our  dock  expenses  and 
expenses  of  administration  and  other  port  charges,  incidental  ex- 
penses, it  left  us  approximately  $1,200,000. 

Mr.  Greene.  In  profit? 

Mr.  Slechta.  No;  gross  receipts,  not  in  profit — not  counting  the 
cost  of  operating  the  steamers  at  all,  but  simply  less  the  cost  of  hand- 
ling the  cargo  and  additional  expenses  incident  upon  handling  gen- 
eral cargo  as  compared  with  handling  coal.  Furthermore,  those  37 
sailings 

The  Chairman.  You  are  figuring  the  coal  delivered  in  Brazil  for 
the  steamers  engaged  in  the  coastwise  service? 

Mr.  Slechta.  Yes,  sir.     The  point  I  want  to  make  is  this 

The  Chairman.  I  want  you  to  take  the  vessels  operating  from  New 
York  to  Brazil. 

Mr.  Slechta.  That  is  what  I  am  doing.  But  please  excuse  me  a 
moment.  I  Avant  to  make  a  point  that  by  operating  our  vessels  from 
New  York  for  the  benefit  of  the  American  exporter,  we  have  really 
lost  money,  although  Me  have  taken  advantage  of  every  possible  op- 
portunity to  increase  rates. 

The  Chairman.  Give  us  the  figures  on  that. 

Mr.  Slechta.  That  is  just  what  I  am  doing. 

Mr.  Edmonds.  Do  you  mean  in  1915? 

Mr.  Slechta.  In  1915. 

Mr.  Edmonds.  You  lost  money  ? 

Mr.  Slechta.  On  the  face  of  it. 

Mr.  Edmonds.  The  ships  made  money? 

Mr.  Slechta.  The  ships  made  money ;  but  by  using  the  same  ves- 
sels for  carrying  our  own  coal  w^e  would  have  made  more  money. 

The  Chairman.  That  is,  when  you  had  to  pay  $10  a  ton  for  coal? 

Mr.  Slechta.  Exactly. 

Mr.  RowE.  That  is  because  the  freight  rates  are  very  high  ? 

Mr.  Slechta.  Exactly. 

Mr.  RowE.  You  had  to  charter  ships? 


646      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Slechta.  Yes,  sir. 

Mr.  Greene.  You  owned  the  vessels? 

Mr.  Slechta.  Yes,  sir. 

Mr.  Greene.  Why  couldn't  you  run  the  vessels  at  cheap  rates  and 
reduce  the  rates?  That  is  the  argument  for  this  bill,  that  they  will 
reduce  the  rates. 

Mr.  Slechta.  But  wouldn't  it  look  silly  for  10  or  a  dozen  vessels 
for  general  cargo  reducing  rates  on  that  cargo  and  reducing  their 
earnings  and  then  to  charter  the  other  fellow's  vessels  and  pay  high 
rates  on  coal?  That  is  exactly  what  would  happen.  It  would  pay 
us  better  to  use  those  vessels  for  carrying  coal  and  to  tell  the  Ameri- 
can exporter  to  go  ahead  and  get  tonnage  where  he  pleased. 

The  Chairman.  Why  didn't  you? 

Mr.  Slechta.  Simply  because  we  wanted  to  continue  the  operation 
of  the  steamship  line.  As  a  matter  of  fact,  as  I  pointed  out,  the 
steamship  officials  in  Brazil  have  very  forcibly  pointed  out  to  me  it 
would  pay  us  better  to  carry  our  own  coal  and  to  take  off  the  vessels 
engaged  in  the  export  service.  In  fact,  we  have  two  steamers  up 
here  now  with  coffee  which  I  am  instructed  to  load  out  with  coal 
and  not  general  cargo. 

The  Chairman.  Because  you  have  no  coal  in  Brazil  and  you  are 
compelled  to  import  coal  to  operate  your  line  there  ? 

Mr.  Slechta.  Yes,  sir. 

Mr.  Edmonds.  When  this  line  was  running  in  normal  timt;s,  in 
1912  and  1913,  could  you  get  plenty  of  cargoes  out  of  New  York  for 
Brazil  ? 

Mr.  Slechta.  Yes;  at  very  low  rates  of  freight,  and  considering 
the  high  cost  of  operating  the  steamers  it  was  not  a  paying  propo- 
sition. 

Mr.  Edmonds.  Did  you  ever  take  any  lower  rate  than  you  were 
compelled  to,  to  carry  them? 

Mr.  Slechta.  No. 

Mr.  Edmonds.  You  had  to  take  the  same  as  other  people? 

Mr.  Slechta.  We  had  to  take  the  same  as  other  people,  and  that 
is  what  we  are  doing  now. 

Mr.  Edmonds.  And  that  is  why  the  steamship  line  got  into  diffi- 
culty, because  the  freight  rates  were  so  low  they  couldn't  make  any 
money  ? 

Mr.  Slechta.  Oh,  no:  the  New  York  service  wns  always  a  pay- 
ing proposition ;  it  was  coastAvise. 

Mr.  Edmonds.  Then  why  abandon  your  New  York  service? 

Mr,  Slechta.  We  did  not  abandon  it. 

Mr.  Edmonds.  You  intended  to. 

Mr.  Slechta.  No. 

Mr.  Edmonds.  "  The  line  to  New  York,  instituted  in  1907,  has  been 
discontinued."    Here  is  the  British  report  for  1913. 

Mr.  Slechta.  That  British  report  is  not  correct,  then.  I  do  not 
know  anvthing  about  it;  but  the  line  has  not  been  discontinued  since 
.it  was  founded  in  190G  or  1907. 

Mr.  Greene.  You  talk  about  the  high  cost  of  running  a  vessel? 

Mr.  Slechta.  Yes,  sir. 

Mr.  Greene.  Was  it  a  higher  cost  to  run  them  under  Government 
control  than  private  control  ? 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      647 

Mr.  Slechta.  No. 

Mr.  Greene.  What  was  the  great  cost  of  running  the  vessel? 

Mr.  Slechta.  I  do  not  understand  what  you  mean. 

Mr.  Greene.  You  said  that  the  cost  of  running  the  vessel  w^as  so 
great  and  yet  you  say  it  was  not  a  greater  cost  than  it  was  under 
private  enterprise.  What  I  want  to  find  out  is  what  advantage  was 
the  fact  that  the  Government  owned  it.  The  Government  took  it  be- 
cause they  could  not  help  it,  because  it  had  loaned  so  much  money 
on  it  they  were  compelled  to  take  it. 

Mr.  Slechta.  Exactly. 

Mr.  Greene.  Now,  what  advantage  has  the  Government  operation 
been  over  that  of  the  private  people? 

Mr.  Slechta.  Principally  in  the  matter  of  administration  in 
Brazil  in  the  coastwise  business,  where  they  have  been  able  to  make 
economical  changes  in  the  administration  of  the  line  and  to  save 
money  in  different  ways.  The  cost  of  operating  the  steamers  so 
far  as  the  size  of  the  crew  is  concerned  has  not  changed.  You  are 
handicapped  in  that  way  very  much  the  same  in  the  American  mer- 
chant marine.  They  carry  more  crew  and  a  more  expensive  crew 
than  any  other  country  in  the  world. 

Mr.  Grp:ene.  And  you  are  giving  low  freights  then  at  a  low  expense 
to  the  coastwise  trade  to  encourage  that  and  to  keep  it  up,  and  in 
running  those  lines  losing  money,  on  your  line? 

Mr.  Slechta.  The  Brazilian  Government  is  compelled  to  main- 
tain, in  some  form  or  other,  a  coastwise  service,  because  of  the  fact 
that  the  transportation  is  so  dependent  upon  the  ocean  carrying. 
Railroads  are  comparatively  few  and  the  development  of  Brazil, 
thus  far,  has  been  largely  along  the  coast  for  the  carrying  of  pas- 
sengers and  cargo  dependent  very  largely  upon  its  coastwise  and 
ocean  carriers. 

Mr.  Hardy.  Gentlemen,  I  do  not  know  liow  the  rest  of  this  com- 
mittee feels,  but  the  present  witness  to  my  mind  has  muddled  the 
thing  so  that  I  can  not  see  the  point  he  is  driving  at,  and  1  would 
like  to  have  him  state  clearly  what  it  is,  and  to  give  us  some  idea  of 
the  point  he  is  trying  to  make.  And  maybe  if  we  will  let  him  proceed 
he  can  make  it  clear. 

Mr.  Rowe.  Go  ahead  with  your  statement. 

Mr.  Edmonds.  Pie  has  just  been  to  Brazil  and  came  here  to  gi^  e  us 
some  idea  of  South  American  commerce. 

INIr.  Hardy.  I  understand  he  wants  to  give  us  some  idea  of  South 
American  trade,  but  what  is  the  point? 

Mr.  Slechta.  The  point  I  wanted  to  make  is,  was  to  explain  in 
the  first  place  that  we  are  maintaining  a  line  of  vessels  in  the  in- 
terests of  the  American  exporters  and  importers,  particularly  the 
exporters,  when  as  a  matter  of  fact  it  would  pay  us  better  to  devote 
those  vessels  entirely  to  the  carrying  of  coal  for  our  own  use  in 
Brazil.  And  in  view  of  the  emphasis  which  has  been  placed  upon 
the  importance  of  putting  additional  carriers  under  the  manage- 
ment and  control  of  the  Government,  or  otherwise,  into  the  Bra- 
zilian service,  I  wanted  to  point  out  that  no  matter  how  it  is  done, 
in  the  face  of  the  fact  that  the  transportation  of  coal  costs  us  so 
much,  because  of  conditions  that  exist  all  over  the  world  in  the 
matter  of  the  demand  for  tonnage,  we  would  necessarily  be  com- 


648      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

pelled  to  withdraw  those  vessels  which  we  now  operate  in  the  carry- 
ing of  general  cargo  frcm  New  York  and  use  them  for  the  carrying 
of  our  own  coal  from  Norfolk. 

The  Chairman.  Suppose  you  did. 

Mr.  Slechta.  That  is  the  point  I  wanted  to  make  in  that  respect. 
Well,  suppose  we  did 

The  Chairman.  You  have  to  have  coal  or  else  you  have  to  suspend 
vour  coastwise  service,  and  if  somebody  else  does  not  render  the 
service,  then  you  have  to  render  it  yourself? 

Mr.  kSlechta.  Surely.  But  if  we  cany  it  in  our  own  vessels,  that 
means  the  facilities  amounting  in  1915  to  150,000  tons  of  general 
cargo  from  New  York  Avould  be  withdrawn. 

The  Chairman.  Unless  somebody  else  supplied  the  service. 

]\Ir.  Slechta.  Exactly.  We  are  perfectly  willing  they  should 
do  so. 

Mr.  Greene.  As  I  understand  it,  they  have  been  taken  care  of 
m  your  generosity  out  of  the  treasury  of  the  Brazilian  Government? 

Mr.  Slechta.  No;  I  do  not  claim  that  much. 

The  Chairman.  He  does  not  claim  any  such  thing  as  that. 

Mr.  Slechta.  I  claim,  in  the  interest  of  the  American  trade  and 
the  Brazilian  trade  as  well,  we  have  maintained  this  line  because  we 
wanted  to  see  the  trade  developed,  and  we  have  continued  to  go  on 
and  develop  it  in  the  face  of  the  fact  that  it  would  pay  us  equally 
well  to  operate  those  boats  simph^  as  our  own  carriers^for  carrying 
our  own  cargo. 

The  Chairman.  You  do  not  mean  to  say  you  are  engaged  now  in 
a  work  of  benevolence  for  American  commerce? 

Mr.  vSlechta.  Not  at  all.  A  proposition  loolring  to  development 
is  certainly  a  desirable  thing:  at  the  same  time  it  means  we  are 
maintaining  those  vessels  in  that  trade  from  which  later  Ave  hope 
to  benefit. 

The  Chairman.  What  you  mean  to  say  is  this,  that  you  could 
operate  those  ships  at  this  particular  time  in  carrying  coal  from 
Norfolk  to  Brazil  at  a  greater  profit  than  in  the  carrying  of  gen- 
eral merchandise  from  New  York? 

Mr.  Slechta.  Yes.  sir. 

Mr.  Hadley.  I  understood  you  to  say  you  are  able  to  do  this  by 
reason  of  Brazilian  administration? 

Mr.  Slechta.  No;  not  at  all. 

Mr.  Hadley.  You  spoke  of  Brazilian  administration.  I  do  not 
understand  what  you  mean  by  Brazilian  operation  in  the  connection 
you  used  it. 

Mr.  Slechta.  I  simpl}^  referred  to  the  fact  that  the  administration 
of  our  enterprise  in  Brazil  has  frequently  insisted  that  it  would  be 
advantageous  if  our  New  York  office  would  use  tlie  carriers  which 
they  send  up  here  loaded  with  coffee  and  other  products  from  Bra- 
zil to  carry  their  own  coal  back  to  Brazil,  coal  that  we  buy  here  for 
them,  instead  of  using  them  for  loading  general  cargo  for  exporters 
back  of  our  line. 

INIr.  Edmonds.  To  get  the  matter  straight,  this  line  was  gotten 
together  "by  the  Brazilian  Government  and  subsidized  heavily  for 
vears.  and  in  1912  it  found  it  was  being  subsidized  to  the  tune  of 
$908,000  a  year 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      649 

The  Chairman.  $200,000  he  said. 

Mr.  Edmonds.  Two  hundred  thousand  for  the  New  York  line 
alone.  $908,220  (p.  27,  report  of  the  Commissioner  of  Navigation, 
1909)  is  what  the  line  got  annually. 

Mr.  Hardy.  We  are  going  after  another  angle ;  I  w  ant  to  get  this 
business  proposition. 

Mr.  Rodenberg.  That  is  here;  he  is  going  to  give  that  right  here, 
Mr.  Hardy. 

Mr.  Edmojjds.  The  company  was  built  for  the  benefit  of  Brazilian 
shippers  entirely  for  coastwise  traffic  along  the  coast  of  Brazil,  where 
they  have  no  railroad  communication  and  it  is  absolutely  necessary 
to  have  communication  by  water.  After  the  line  got  in  difficulty  in 
1912  the  Government  took  it  over,  because  it  was  absolutely  necessary 
for  this  line  to  run  in  their  coastwise  traffic.  It  was  discussed  in  the 
newspapers.  If  I  remember  right,  the  New  York  Line  was  bringing 
250,000  tons  of  coffee  and  rubber  to  this  country  every  year — fifty 
vessels  of  5,000  tons  each.  They  found  they  could  not  bring  their 
coffee  here,  that  being  in  the  hands  of  English  shippers.  They  con- 
tinued to  run  the  new  line,  and  at  one  time,  in  1913,  the  entire  line, 
composed  of  53  steamers,  was  for  sale  under  certain  restrictions,  and 
the  sale  was  published  in  the  New  York  and  Philadelphia  news- 
papers— not  as  an  advertisement,  but  as  a  news  item. 

Mr.  Sleciita.  As  a  matter  of  fact,  there  were  advertisements  pub- 
lished also. 

Mr.  Edmonds.  T  do  not  remember  them,  but  I  remember  it  being 
spoken  of  in  the  newspapers. 
.   Now.  that  puts  the  matter  so  we  know  exactly  what  the  line  was. 

The  Chairman.  Why  not  let  Mr.  Slechta  make  his  statement? 

Mr.  RoDENBERG.  I  think  that  will  clarify  the  situation. 

Mr.  Slechta.  I  am  very  glad  to  have  my  memory  refreshed  on  that 
point.  I  have  not  concerned  myself  particularly  with  it,  because  it 
has  not  been  my  business  to  do  so. 

The  thing  I  particularly  wanted  to  emphasize  in  this  connection, 
and  the  reason  I  brought  up  this  comparison  of  the  two  businesses  in 
which  we  are  engaged — the  taking  of  freight  and  the  collecting,  of 
course,  of  all  the  freight  we  can  get  for  export  to  Brazil,  and  the 
carrying  of  our  own  coal,  illustrates  very  well  the  fact  that  we,  as 
well  as  a  great  many  other  people,  are  confronted  with  the  tremen- 
dous demands  for  tonnage,  not  so  much  in  the  South  American  busi- 
ness as  in  the  ammunition  trade  to  Europe.  It  is  in  the  trans- 
Atlantic  service  where  the  rates  are  being  made,  and  the  owner  who 
has  a  vessel  available  which  he  might  conceivably  charter  for  busi- 
ness to  South  America  says : 

I  can  get  so  much  for  her  in  the  trans-Atlantic  business;  you  can  have  her, 
if  you  want  her,  for  Brazilian  or  Argentine  trade,  and  we  will  figure  off  a 
reasonable  amount  less,  conditioned  upon  the  amount  of  insurance  which  I  must 
pay  on  sending  that  vessel  to  Europe. 

Very  well.  Now,  here  is  a  line  like  the  Lamport  &  Holt,  a  British 
line,  for  instance,  which  owns  their  own  vessels.  They  are  not 
obliged,  you  say,  to  increase  their  rates  to  Brazil.  Nor  are  we,  be- 
cause we  own  our  vessels  also.  But  the  British  Government  takes 
a  large  part  of  the  Lamport  &  Holt  tonnage,  and  they  do  not  pay  the 
Lamport  &  Holt  Steamship  Co.  the  current  rates  on  that  tonnage; 


650      SHIPPJXG  BOAKD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

they  pay  them  a  certain  proportion  above  normal  rates,  with  the  result 
that  the  Lamport  &  Holt,  in  view  of  the  insurance  expense  and  gen- 
erally increased  cost  of  operation  due  to  the  war,  feel  comperied, 
naturally,  to  get  all  they  can  in  the  way  of  freights.  In  other  words, 
they  take  advantage  of  the  law  of  supply  and  demand  to  get  what  is 
the  market  rate  on  the  ^'essels  which  remain  in  their  service. 

The  Chairman.  In  other  words,  they  reap  whatever  diminution 
there  may  be  in  their  profits  on  vessels  commandeered  by  the  Gov- 
ernment by  increasing  rates  in  the  trade  to  South  America. 

Mr.  Slechta.  Wherever  they  operate  them,  whether  South  Amer- 
ica or  China. 

Mr.  Hardy.  If  I  understand  you,  your  proposition  is  that  the 
trans- Atlantic  trade,  particularly  the  munitions  trade,  has  so 
absorbed  all  the  tonnage  that  it  has  resulted  in  a  rise  of  rates  all  over 
the  world. 

Mr.  Slechta.  It  has  absolutely  been  the  factor  which  determines 
the  rate  upon  tonnage  to-day. 

Mr.  Hardy.  As  a  matter  of  fact,  you  do  not  think  any  shipping 
line,  regardless  of  the  question  of  whether  their  vessels  are  comman- 
deered by  their  Government,  would  fail  to  take  advantage  of  the  law 
of  supply  and  demand  to  charge  all  the  traffic  will  bear? 

Mr.  Slechta.  No,  sir:  I  know  they  will. 

Mr.  Hardy.  They  will  do  that  anyhow? 

Mr.  Slechta.  Yes,  sir ;  they  will. 

Mr.  Hardy.  But  it  is  a  fact  that  the  trans- Atlantic  trade,  espe- 
cially the  munitions  trade,  has  so  absorbed  the  cargo  capacity  of  the 
shipping  lines  of  the  world  that  everywhere  rates  have  been  raised 
on  account  of  the  law  of  supply  and  demand? 

Mr.  Slechta.  Yes,  sir.  Let  me  give  you  an  illustration :  We  had 
a  steamer  which  we  were  fortunate  enough  to  have  chartered  in  the 
early  stages  of  the  war,  which  cost  us  $18,000  a  month.  She  just 
went  off  of  her  charter  with  us  yesterday.  Unfortunateh^  we  did 
not  have  her  for  a  longer  period.  We  paid  $18,000  a  month.  To-day 
she  starts  to  load  for  a  port  in  France,  under  all  sorts  of  restrictions 
made  by  the  owners  in  the  charter,  and  they  will  get  for  one  voyage 
.vhich  takes  less  than  a  month,  including  loading  and  unloading 
(because  it  only  takes  10  days  to  load  and  discharge  the  vessel  and 
the  voyage  is  less  than  20  days),  $145,000.  We  had  the  same  vessel 
for  $18,000  a  month  up  to  yesterday. 

Mr.  Hardy.  In  other  words,  the  cargo  man  raises,  the  freight  man 
raises,  and  everybody  raises  as  soon  as  they  can. 

Mr.  Slechta.  There  is  nothing  in  the  world,  gentlemen,  in  the 
way  of  business  facilities  for  transportation  or  anything  else,  which 
is  so  absolutely  subservient  to  the  laws  of  supply  and  demand  as 
ocean  transportation  facilities. 

Mr.  Hardy,  And  therefore  the  question  is  until  we  get  a  larger 
supply  of  tonnage  we  may  expect  balloon  rates. 

Mr.  Slechta.  Absolutely;  and  it  does  not  make  any  difference 
whether  they  are  under  the  American  flag,  the  flag  of  China,  or  any 
other  flag,  until  we  get  the  tonnage  the  rates  will  be  high. 

Mr.  Hardy.  I  understand  you  to  say  you  operate  a  Government- 
controlled  line? 

Mr.  Slechta.  Yes.  sir. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      651 

Mr.  Hardy.  And  you  see  no  reason  why  it  can  not  be  as  cheaply 
operated  and  why  it  is  not  as  cheaply  operated  as  it  would  l)e  if 
operated  by  a  private  concern? 

Mr.  Slechta.  Please  don't  draw  any  inference — I  am  an  Ameri- 
can before  I  am  anj'thing  else. 

Mr.  Hardv.  I  understood  you  to  make  that  answer  just  now. 

Mr.  Slechta.  Not  quite.  Please  do  not  draw  any  inference  as  to 
the  possibility  of  operating  a  steamship  line  under  the  laws  of  the 
Government,  from  what  anything  else  does,  as  far  as  my  experience 
is  concerned. 

Mr.  Hardy.  I  am  not  drawing  an  inference;  I  want  tlie  facts. 

Mr.  Slechta.  I  will  give  you  the  facts,  if  you  want  the  facts.  It 
is  perfectly  true  that  the  Brazilian  Government  is  to-day  operating 
the  Lloyd-Brazileiro  much  better  than  it  was  ever  operated  before; 
but  private  business  c(»nditions — conditions  under  the  domination  of 
private  interests,  and  especially  considering  the  subsidy,  which  was 
paid  by  Brazil  to  a  private  corporation  or  joint  stock  company, 
under  which  the  Lloyd-Brazileiro  was  operated — were  so  utterly 
bad  that  the  Government  could  not  very  well  help  but  improve  it. 

Mr.  Hardy.  In  other  words,  the  Government  tried  subsidy,  and 
finally  took  the  ships? 

Mr.  Slechta.  Absolutel3^ 

Mr.  Greene.  You  do  not  figure  at  all  on  these  vessels  which  you 
own  for  a  percentage  of  profit,  do  you?  You  just  take  your  ordinary 
running  expenses  and  do  not  figure  any  profit  on  your  capital  in- 
vested or  an3^thing  else,  do  you  ? 

Mr.  Slechta.  I  could  not  say  about  it.  I  have  nothing  to  do  with 
the  administration. 

Mr.  Greene.  You  ought  to  know  about  it,  oughtn't  you  ? 

Mr.  Slechta.  I  do  not  know  because  I  am  agent  of  the  line  in 
New  York,  and  it  is  my  business  to  load  steamers,  get  the  best  cargo 
I  can,  the  best  freights,  and  to  run  the  New  York  end  of  it  as  eco- 
nomically as  possible. 

Mr.  Eodenberg.  You  do  not  know  how  much  the  Government 
lost  in  its  operation  prior  to  this  increased  demand? 

Mr.  Slechta.  No  ;  I  do  not. 

Mr.  Eodenberg.  Do  you  know  whether  it  lost  more  than  the  sub- 
sidy that  they  had  been  giving  or  not  ? 

Mr.  Slechta.  I  know  they  still  owe  a  very,  very  large  amount, 
which  is  included  in  the  funded  debt  of  Brazil  to  English  capitalists. 

Mr.  Hardy.  That  involves  their  whole  valorization  scheme,  what 
it  made  and  what  it  lost  on  that,  and  this  line  run  in  connection 
with  it. 

Mr.  Slechta.  No;  the  valorization  scheme  never  had  anything 
to  do  with  our  company. 

The  Chairman.  Tell  us,  if  you  are  familiar  with  that,  about  their 
valorization  scheme. 

Mr.  Slechta.  I  am  familiar  with  it,  but  that  is  rather  a  far  call. 
I  would  be  very  glad  to  do  so  if  it  would  be  of  interest  to  you,  but 
it  has  no  relation  to  this  question. 

The  Chairman.  You  say  it  does  not  have  any  direct  connection 
with  this  subject? 

Mr.  Slechta.  No,  sir. 


652      SHIPPING  BOARD,  NAVAF.  AUXTLIARV,  AND  MERCHANT  MARINE, 

The  Chairman.  The  other  clay  somebody  suggested  that  it  might. 

Mr.  Slechta.  I  do  not  see  how.  Reference  was  made  liere  by 
Judge  Hardy  to  the  fact  that  the  Lloyd-Brazileiro  insisted  on  re- 
taining ships  in  the  service  because  of  the  coffee  exports.  As  a 
matter  of  fact,  up  to  the  time  of  the  w  ar,  because  of  the  combination 
of  British  and  other  ships  engaged  in  the  service  in  competition  with 
us,  we  were  unable  to  carry  coffee  at  all. 

The  Chairman.  On  account  of  their  deferred  rebate  system? 

Mr,  Slechta.  Absolutely. 

Mr.  RowE.  Do  you  get  a  complete  load  each  way? 

jVIr.  Slechta.  We  do  now ;  yes. 

Mr.  Rowe.  In  normal  times? 

Mr.  Slechta.  In  normal  times.  Our  boats  were  always  able  to  go 
down  to  Brazil  loaded,  but  they  came  back  very  largely  einpt}'. 

Mr.  Hardy.  Largely  because  you  were  not  allowed  to  haul  coffee? 

Mr.  Slechta.  Xot  because  w^e  were  not  allowed  to,  but  because  the 
shippers  were  tied  up  with  other  contracts. 

Mr.  Hardy.  That  is  what  I  meant  by  "  not  allowed  to." 

Mr.  Slechta.  Yes;  and  although  we  offered  to  carry  the  coffee  at 
half  the  rates  of  the  so-called  "  foreign  ''  lines  w^e  could  not  get  the 
cargo.    NoW',  the  shoe  is  on  the  other  foot. 

The  Chairman.  Our  investigation  showed  that  very  fact  and  that 
IS  the  reason  w'e  barred  rebates  in  bill  450,  and  I  hope  we  will  in  this 
bill. 

Mr.  Slechta.  As  a  matter  of  fact  you  know.  Judge  Alexander, 
that  the  United  States  District  Court  practically  turned  down  that 
proposition  of  prohibiting  rebates  in  a  hearing  that  extended  some- 
thing over  a  year  in  Xew  York.  It  w-as  a  suit  against  the  Prince 
Line  et  al.,  in  which  they  practically  supported  the  contention  of 
those  lines  that  they  had  a  right  to  pay  those  rebates. 

Mr.  Rowe.  Why  don't  you  tie  them  up  now  in  a  rebate  agreement 
the  same  as  the  other  companies  did?  They  have  to  ship  by  you  to- 
day everything  they  ha^  e  for  the  LTnited  States. 

Mr.  Slechta.  We  are  satisfied  to  take  the  advantage  we  have,  and 
the  fact  that  we  have  neutral  steamers  that  pay  very  much  lower 
rates  of  insurance  than  the  English  steamers,  and  consequently  get  a 
preference.  The  fact  of  the  matter  is  we  are  not  in  a  position  to  do 
that  because  we  have  no  service  to  Europe,  and  all  of  our  competitors 
have  an  interest  at  least  in  lines  that  have  a  service  to  Europe  as  well 
as  to  the  United  States.  And  as  I  explained  in  this  committee  room 
once  before,  and  also  in  the  hearings  in  New  York  before  the  district 
court  in  the  suit  referred  to,  most  of  the  large  coffee  shippers,  with 
the  exception  of  Arbuckle  &  Co.,  ship  to  Europe  as  well  as  to  the 
United  States,  and  if  they  are  not  willing  to  enter  into  a  rebate 
agreement  with  the  steamship  company,  owner,  or  operator,  he 
says : 

Very  well,  we  will  carry  your  coffee  at  a  low  rate  or  you  cau  ship  it  by  any- 
body else  you  want  to,  and  we  will  give  you  the  benefit  of  the  minimum  rate 
to  the  United  States ;  but  we  won't  give  you  any  room  at  all  to  Europe. 

Mr.  Hardy,  That  decision  you  spoke  of  was  a  decision  made  by  the 
court  largely  because  there  is  no  law  governing  or  attempting  to 
affect  the  question? 

Mr.  Slechta.  I  should  assume  so :  yes,  sir. 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MEBCHANT  MARINE.      653 

Mr.  Edmonds.  That  is  rather  a  peculiar  situation,  is  it  not,  for  the 
Government  to  finance  the  coffee  crop  and  then  it  can  not  turn  it 
over  to  its  own  steamship  line? 

Mr.  Slechta.  Yes;  a  very  peculiar  situation.  I  have  repeatedly 
done  everything  I  possibl}'  could  to  make  the  Government  see  the 
importance  of  giving  its  OAvn  line  certain  benefits  which  will  give  it 
cargo. 

Mr.  Edmoisds.  And  besides  financing  the  crop  they  let  the  steamers 
come  up  here  and  lose  money  on  the  trip  rather  than  give  them  the 
cargo. 

Mr.  Slechta,  It  is  a  peculiar  situation;  I  agree  with  you. 

Mr.  Curry.  Do  the  other  lines  carr}^  cheaper  than  you  do? 

Mr.  Slechta.  No;  that  is  just  the  point.  The  rates  on  coffee 
iniiaediately  preceding  the  war  were  50  cents  a  bag.  We  had 
offered  for  more  than  a  year  to  carry  it  far  25  cents  and  we  could 
not  get  it. 

Mr.  Curry.  That  is  a  peculiar  situation  where  the  government 
controls  the  coffee  crop,  oAvns  the  steamship  line,  and  the  steamship 
line  will  carry  the  coffee  cheaper  than  private  corporations. 

Mr.  Slechta.  There  are  very  good  reasons. 

Mr.  Curry,  There  must  be  very  good  reasons. 

Mr.  Slechta.  There  are  good  reasons.  In  the  first  place,  the 
Brazilian  Government  is  very  much,  I  would  not  say  afraid,  but 
they  are  dependent  upon  the  facilities  of  the  larger  steamship  com- 
panies running  from  Europe  for  a  good  many  things — passenger 
accommodations  and  good  connections  with  Portugal  and  Spain,  and 
all  that  sort  of  thing.    And  they  are  afraid  really  of  reprisals. 

Mr.  Curry,  Those  ships  from  Spain  and  Portugal  are  not  going 
to  run  from  Brazil  empty? 

Mr.  Slechta,  No;  but  they  threaten,  at  least,  to  withdraw  the 
facilities,  that  they  won't  call  at  Brazil,  but  will  go  to  Argentina 
and  China. 

Mr.  Curry.  It  seems  to  me  a  government  that  has  the  energy  to 
go  ahead  and  have  a  valorization  S3'stem  on  the  coffee  crop  and  that 
says  to  an  outsider  you  can  not  come  in  and  plant  coffee,  that  says 
to  the  man  who  wants  to  plant  coffee  he  shall  not  increase  his  crop, 
that  he  can  only  plant  a  coffee  plantation  of  a  certain  limited  size, 
that  takes  care  of  the  surplus,  and  that  owns  its  own  steamship  line 
which  will  practically  carry  the  coffee  cheaper,  will  permit  a  bluff 
of  that  kind  to  be  run  on  it  by  a  steamship  company.  That  does  not 
look  hardly  reasonable;  there  must  be  something  else. 

Mr.  Hardy,  It  does  not  look  reasonable,  but,  notwithstanding,  it 
is  the  fact. 

Mr.  Slechta.  It  does  not  look  reasonable,  but  it  is  the  fact. 

Mr.  Edmonds.  Does  not  the  Brazilian  Government  have  contracts 
with  these  ether  lines  by  which  it  pays  some  subsidy? 

Mr.  Slechta,  No,  sir. 

Mr.  Edmonds.  How  about  the  Italian  line? 

Mr.  Slechta.  With  the  Italian  line  there  is  a  contract  of  very 
recent  date  with  reference  to  some  immigration  service,  I  believe. 
It  has  nothing  to  do  with  cargo. 

Mr.  Edmonds.  "  A  contract  signed  in  September,  1912,  between  the 
Brazilian  Federal  Government  and  certain  Italian  steamship  lines 
for  a  freight  and  passenger  service  between  Italy  and  a  number  of 

32910—16 42 


654      SHIPPING  BOARD,  XAVAI.  AUXILIARY,  AND  MERCHANT  MARINE. 

Brazilian  ports;  the  subsidy  for  the  service  being  fixed  at  approxi- 
mately $20,000  per  round  voyage,  two-thirds  to  be  paid  by  the 
Federal  Government  and  one-third  by  the  Government  of  San 
Paulo." 

Mr.  Sleciita.  Yes;  I  recall  that. 

Mr.  Hadley.  From  what  are  .you  reading? 

Mr.  Edmonds.  From  a  British  Government  report  on  bounties 
and  subsidies  published  in  1913. 

Mr.  Slechta.  As  a  matter  of  fact,  the  Italian  lines  had  nothing 
to  do  with  the  case  in  point,  because  they  do  not  carry  coffee;  they 
do  not  go  to  the  ports  where  the}^  have  coffee. 

Mr.  Edmonds.  Why  was  the  Government  of  San  Paulo  to  pay  one- 
third? 

Mr.  Slechta.  Simply  because  they  wanted  the  immigrants. 

Mr.  CuRRY'.  Could  you  explain  this  valorization  scheme  in  regard 
to  coffee  in  relation  to  shipping  I 

Mr.  Slechta.  I  do  not  think  it  has  any  relation  to  shipping. 

Mr.  Curry.  It  seems  to  me  to  have  with  its  own  Government- 
owned  line. 

Mr.  Slechta.  No,  sir.  As  far  as  I  know — I  was  in  Brazil  at  that 
time;  I  was  American  consular  officer  in  Kio  and  followed  that  ques- 
tion very  closel3%  indeed  so  closely  that  1  nearly  lost  my  job  on 
account  of  the  article  I  wrote  on  coffee  valorization. 

Mr.  Curry.  Is  it  not  a  fact  that  most  of  the  money  in  the  valoriza- 
tion scheme  is  English  money  and  some  United  States  money? 

Mr.  Slechta.  Yes;  about  one-fifth  of  it  is  Government  money,  I 
believe,  or  was,  and  it  is  four-fifths  European.  And  that  is  purely 
a  matter  of  financing;  it  has  nothing  to  do  with  the  general  policy 
of  the  Government  in  undertaking  the  valorization  scheme. 

Mr.  CuRRY\  I  do  not  suppose  that  the  valorization  scheme  has  any 
relation  to  shipping  put  down  on  a  piece  of  paper,  but  it  seems  to 
ha^e  some  influence. 

Mr.  Slechta.  I  do  not  know  of  any  way  in  which  it  can  be  con- 
nected with  the  matter  of  shipping.  The  Brazilian  Government; 
that  is,  the  Government  principally  of  the  State  of  San  Paulo,  and 
the  Federal  Government,  said  "  We  will  buy  this  coffee,"  and  they 
did.  Thev  bought  up  to  nearly  9,000,000  bags  of  coffee  of  the  crop 
year  of  1908. 

The  Chairman.  Hoav  many  pounds  would  that  be;  how^  many 
pounds  in  a  bag? 

Mr.  Slechta.  One  hundred  and  thirtv-two.  It  was  approximately 
9,000.000  bags  of  coffee.  When  it  started  it  accepted  only  3.000,000 
and  it  found  it  had  no  effect  in  any  way  so  far  as  controlling  the 
price  and  they  had  to  buy  up  to  9,000,000  pounds.  That  made  so 
gigantic  a  proposition  and  involved  so  iriuch  money  that  before  long 
they  had  to  have  recourse  to  foreign  means  and  to  get  the  Federal 
Government  to  back  them  up  in  it. . 

Mr.  Hardy'.  Then  they  had  to  negotiate  with  private  capitalists, 
the  Morgans  of  this  country  and  European  countries,  to  carry  the 
business  very  largely? 

Mr.  Slechta.  Exactly. 

Mr.  Hardy".  And  they  sold  bonds  at  5  per  cent  and  agreed  not  to 
keep  them  outstanding  only  a  certain  length  of  time  and  will 
probably  wind  up  with  a  loss. 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      655 

Mr.  Slechta.  Any  undue  interference  on  the  part  of  the  Govern- 
ment with  the  laws  of  supply  and  demand,  I  believe,  except  in  rare 
mstances,  in  any  such  scheme  is  doomed  to  failure. 

Mr.  Hardy.  But  you  rather  admit  that  the  conference  lines  inter- 
fered considerably  with  the  matter  of  freights  and  tonnage. 

i\Ir.  Slechta.  I  say,  in  exceptional  instances.  It  is 'a  question 
there  whether  they  have  interfered  with  it. 

The  Chairman.  The  immediate  effect  of  this  agreement  between 
the  conference  lines  was  to  affect  the  price.  You  say  you  offered  to 
carry  the  coffee  for  25  cents  a  sack? 

Mr.  Slechta.  Yes. 

The  Chairman.  And  they  were  paying  the  conference  lines  50 
cents  a  sack.  That  was  a  direct  violation  of  the  law  of  supply  and 
demand. 

Mr.  Slechta.  Fifty  cents  a  sack  is  about  the  right  price  that  it 
ought  to  be  worth  to  carry  it,  and  it  is  Avorth  that. 

Mr.  Curry.  But,  still,  the  Brazilian  Government,  that  owned  its 
own  line,  was  not  in  a  position  to  take  advantage  of  that  low  rate. 
There  must  be  a  cause  there,  somewhere. 

Mr:  Slechta.  It  could  not  go  to  the  shipper  and  say,  "  Here,  you 
have  got  to  give  us  the  trade;  we  can  compel  you  to."  The  only  way 
to  do  is  to  put  certain  restrictions  upon  the  other  shipping  companies, 
and  say,  "  Here,  we  won't  let  you  come  into  the.  port."  and  allow 
absolute  freedom  in  shipping  the  cargo. 

Mr.  Curry.  As  far  as  that  is  concerned,  it  Icoks  to  me  that  practi- 
cally the  capital  of  Europe  controls  the  coffee  business  and  the  ship- 
ping business  of  Brazil,  notwithstanding  Brazil  owns  its  own  ship- 
ping lines.  For  instance,  there  just  comes  to  my  mind  the  proposi- 
tion of  the  Argentine  Republic  which  owns  its  water  front,  and  it  is 
supposed  to  be  a  public  utility :  but  the  Argentine  Republic  can  not 
do  anything  with  its  water  front,  for  the  reason  it  is  financed  and 
developed  by  British  capital,  the  same  as  its  railroads  are  financed 
and  developed  by  British  capital  and  the  bonds  are  owned  by  British 
capital. 

Mr.  Slechta.  Quite  true. 

Mr.  Curry.  And  there  was  a  contract  between  the  Argentine  Re- 
public and  the  bondholders  that  whenever  the  Argentine  Government 
thinks  it  can  do  better,  it  is  free  to  do  so ;  but  before  the  Government 
does  so,  it  has  to  take  up  those  bonds.  And  as  it  has  not  the  money 
and  can  not  get  the  money  to  take  up  the  bonds,  because  it  is  so  tied 
up  down  there,  although  they  own  the  water  front,  the  British  ship- 
ping interests  have  absolute  control  of  it,  and  they  have  control  of 
the  railroads  of  the  Argentina. 

The  Chairman.  Is  there  anything  further  from  this  Avitness? 

Mr.  Slechta.  I  do  not  care  to  take  up  any  more  of  your  time. 

Mr.  Curry,  I  would  like  to  ask  if  the  Brazilian  Government  still 
wants  to  sell  its  ships? 

Mr.  Slechta.  No,  sir. 

Mr.  Curry.  Not  until  after  this  Avar  is  over? 

Mr.  Slechta.  The  point  is,  they  found  they  could  not  dispose  of 
them  under  the  restrictions  they  placed  upon  any  proposed  possible 
purchaser. 

Mr.  Curry.  They  are  rather  old  ships  noAv,  anyway. 


656      SHIPPING  BOARD,  NAVAL  AUXILIARY",  AND  MERCHANT  MARINE. 

Mr.  Slechta.  It  is  not  so  much  that.  The  ships  can  be  repaired, 
and  any  ship  has  its  price,  whether  it  is  old  or  new. 

Mr.  Curry.  Now  it  has. 

Mr.  Slechta.  It  has  at  any  time.  It  is  essentialy  a  question  of 
price,  whether  on  account  of  the  restrictions  a  tentative  purchaser 
was  willing  to  pay  the  Government's  price — in  the  last  instance,  at 
least.  And  they  were  not  willing  to  submit  to  those  conditions  and 
to  the  terms  and  restrictions  which  the  Government  would  place 
upon  the  purchaser.  And  finding  that  out,  the  Government,  so  far 
as  its  administration  at  present  is  concerned,  has  decided  to  retain 
the  line  entirely.  As  a  matter  of  fact,  while  I  was  in  Rio,  just  a 
short  time  ago,  a  bill  w^as  presented  in  Congress  authorizing  the  ex- 
ecutive to  dispose  of  the  line,  but  it  never  came  to  a  second  reading. 

Mr.  Curry.  Was  it  a  paying  investment  before  the  war? 

Mr.  Slechta.  Immediately  before  the  war  the  company  was  being 
placed  gradually  upon  a  very  much  better  basis.  So  far  as  the  coast- 
wise service  is  concerned,  it  has  very  little  Telation  to  the  conditions 
abroad,  any  more  than  our  own  coastwise  service.  At  the  present 
time  it  is  true  that  in  certain  lines  of  trade  the  rates  have  been  in- 
creased on  the  coast  here:  but  in  general  they  have  not.  In  Brazil 
they  have  not  at  all;  the  rates  are  just  the  same  as  they  were  before 
the  war,  because  it  is  monopolized. 

Mr.  Greene.  Do  I  unders^.and  you  that  these  terminals  and  serv- 
ices in  Brazil  are* owned  by  foreign  governments — the  British  Gov- 
ernment, for  instance? 

]Mr.  Slechta.  No;  I  did  not  sa}^  that.  They  are,  as  a  matter  of 
fact,  in  most  places — not  necessarily  foreign  capital.  The  dock 
facilities  in  all  of  those  ports,  which  are  modern  dock  facilities,  are 
partially  owned  under  the  control  of  the  Government. 

INIr.  Greene.  But  they  are  not^ — let  us  say,  for  instance,  that  a 
Government  line  should  be  established,  or  that  the  United  States 
Government  should  establish  lines  here.  AVould  they  have  free 
access  to  these  terminals? 

Mr.  Slechta.  They  are  free  to  anybody  who  will  pay  the  price. 

Mr.  Curry.  Is  the  price  the  same  ? 

Mr,  Slechta.  The  same  to  everybody  except  Brazilian  mail  lines. 
They  have  a. certain  advantage. 

Mr.  Edmonds.  You  have  not  said  anything  at  all  about  the  regu- 
lation of  our  rates  in  this  bill.  Have  you  read  those  regulations 
over  ? 

Mr.  Slechta.  Yes;  I  have  read  those  provisions  in  the  bill. 

Mr.  Edmonds.  Have  you  anything  at  all  to  suggest  in  connection 
with  those  provisions? 

Mr.  Slechta.  I  do  not  feel  competent  to  discuss  the  feasibility 
of  putting  in  such  povisions  in  the  bill ;  but  I  do  think  it  would  be  a 
very  difficult  thing  to  carry  out,  and  I  feel  it  would  discourage  for- 
eign capital  from  carrying  on  transportation  facilities.  I  think  it 
would  bring  us  reprisals  from  foreign  countries. 

Th§  Chairman.  We  could  not  prevent  abuses? 

Mr.  Slechta.  Not  necessarily  that;  but,  for  instance,  at  such  a 
time  as  this,  take  our  own  case.  If  the  Government  were  to  step  in 
and  say  "  Here,  you  can  not  increase  your  rates  now,"  simply  be- 
cause the  demand  for  tonnage  has  so  increased  we  would  be  forced 
to  withdraw  our  service,  that  is  all. 


SHIPPING  BOAED,  NAVAL  AUXILIAKY,  AND  MERCHANT  MARINE.      657 

The  Chairman.  Do  you  suppose  a  shipping  board,  created  under 
the  terms  of  this  bill,  would  not  have  as  much  sense  and  discretion 
as  a  steamship  agent  ? 

Mr.  Slechta.  Naturally  they  would  not  look  at  the  thing  from  the 
same  point  of  view.     If  this  shipping  board  is  to  have  power 

The  CiiAiR-^iAN.  You  mean  they  would  pursue  a  policy  that  would 
divorce  and  deii}^  the  American  shipper  of  a  service  by  forcing  valu- 
able tonnage  out  of  the  trade? 

Mr.  Slechta.  I  am  not  assuming  anything  of  the  sort ;  no.  But  I 
simply  point  out  the  possibility  of  it ;  that  is  all. 

The  Chairman.  We  can  imagine  a  great  many  things  that  might 
ensue  if  people  would  not  exercise  ordinary  common  sense  in  business. 

Mr.  Slechta.  The  thing  I  want  particularly  to  emphasize  is,  that 
it  seems  a  very  difficult  thing  to  do. 

The  Chairman.  I  agree  with  3^ou. 

Mr.  Slechta.  Our  rates  are  changing  constantly. 

The  Chairman.  Do  you  think  there  ought  to  be  discrimination  be- 
tween' shippers? 

Mr.  Slechta.  No.  sir;  I  do  not.  I  believe  in  regulation  along  that 
line. 

The  Chairman.  Do  you  think  it  ought  to  be  prevented? 

Mr.  Slechta.  I  think  so. 

The  Chairman.  Do  you  think  the  deferred  rebate  system  should 
be  prohibited? 

Mr.  Slechta.  The  deferred  rebate  system,  as  far  as  exports  are 
concerned,  is  prohibited  now. 

The  Chair:man.  Very  well;  should  it  not  be  prohibited  to  any  ves- 
sels entering  or  leaving  American  ports  if  it  operates  to  the  disad- 
vantage of  our  own  freight? 

Mr.  Slechta.  Yes:  I  think  that  too  would  be  very  difficult. 

The  Chairman.  That  is  one  of  the  powers  this  board  might  exer- 
cise under  the  provisions  of  section  9. 

INIr.  Greene.  We  ought  to  have  the  gentleman  tell  us  about  it.  You 
say  that  would  be  difficult.     Tell  us  what  the  difficulties  are. 

'Mr.  Slechta.  I  merely  mentioned  that  it  would  be  a  difficult  thing 
in  my  opinion,  because  I  do  not  know  enough  about  it  to  be  abso- 
luteh^  certain,  But  on  my  recent  trip  to  Brazil,  I  was  told  that  one 
line  operating  from  a  certain  country  to  Brazilian  ports  pays  certain 
of  its  largest  shippers  regular  rebates  and  it  is  clone  in  this  way: 
This  particular  line  has  its  home  office  in  London  and  there  is  no 
contract  existing;  nothing  in  writing  to  show  what  those  particular 
shippers  may  expect  or  have  a  right  to,  but  every  six  months  there  is 
a  check  passed  from  the  London  office  through  a  bank  (it  does  not 
disclose,  naturally,  the  identity  of  the  person  who  makes  the  deposit 
with  the  bank)  to  those  shippers. 

Mr  Hardy.  That  is  the  old  process  that  used  to  be  used  with  the 
cattlemen  shipping  car  loads  of  cattle  on  the  railroads. 

Mr.  Slechta.  Absolutely. 

Mr.  Hardy.  It  took  a  great  deal  of  trouble  to  break  it  up,  but  we 
finally  did  break  it  up. 

Mr.  Slechta.  But  here  you  have  of  necessity  the  investigations  in 
foreign  countries. 

Mr.  Hardy.  Oh,  I  admit  the  difficulty  is  greater  because  the  field 
is  wider  and  the  evidence  is  a  little  more  difficult  to  get. 


658      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Slechta.  Yes;  absolutely. 

Mr.  Hardy.  But,  if  under  our  laws,  we  find  a  man  in  Brazil  who 
ships  coffee  to  London,  and  that  man  is  tied  down  by  an  agreement 
that  they  will  hold  deferred  rebates  on  his  shipments  to  London  so 
as  to  prevent  him  from  securing  some  desirable  carrier  to  New  York, 
we  have  got  to  get  at  it  in  some  way  or  else  confess  our  inability  at- 
tached to  the  whole  question.     Is  not  that  about  it  ? 

Mr.  Slechta.  I  am  perfectly  willing  to  concede  and  to  emphasize 
the  importance  of  such  legislation,  but  that  does  not  prevent  me  from 
expressing  my  views  as  to  the  difficult}^  of  doing  it. 

The  CHAiR:\rAN.  We  agree  with  you  that  it  is  difficult.  But  aside 
from  how  this  commerce  shall  be  carried,  if  we  are  going  to  promote 
our  foreign  commerce  we  have  to  do  all  we  can  to  protect  the  Amer- 
ican shipper  in  that  regard,  must  we  not? 

Mr.  Slechta.  Yes;  I  think  so. 

The  Chairman.  Is  there  any  objection  to  clothing  this  shipping 
board  with  power  to  do  that  as  far  as  they  may? 

Mr.  Slechta.  I  have  no  views  to  express  on  it  as  far  as  being  op- 
posed to  it. 

Mr.  Edmonds.  One  of  the  reasons  for  this  bill,  as  I  understand  it, 
was  to  bring  down  the  freight  rates. 

Mr.  Slechta.  Yes. 

Mr.  Edmonds,  If  any  attempt  was  made  by  this  board  at  the  pres- 
ent day  to  bring  down  freight  rates  it  would  simplj"  result  in  the 
tonnage  going  from  our  country  and  being  used  in  some  other  serv- 
ice, would  it  not? 

]\Ir.  Slechta.  Absolutely;  that  is  my  opinion. 

Mr.  Edmonds.  Mr.  Baker,  in  his  book,  states  that  we  should  have  a 
maximlim  freight  rate  and  the  board  should  be  alloAved  to  make  a 
minimum  freight  rate  underneath  it,  which  I  presume  is  the  under- 
standing of  the  framers  of  this  bill.  Therefore  the  board  would  set 
the  maximum  freight  rate  and,  in  special  cases,  would  make  a  mini- 
mum rate.  Now,  if  we  are  going  to  bring  down  freight  rates  the 
board  necessarily  would  have  to  make  that  freight  rate  very  much 
below  the  exorbitant  freight  rate  that  is  being  made  to-day,  and  nat- 
urally the  tonnage  would  then  go  in  other  lines  and  would  not  come 
to  our  ports  at  all. 

The  Chairman.  I  assume  this  committee  in  any  legislation  it  pro- 
poses along  that  line  would  undertake  to  carry  out,  as  nearly  as  they 
may,  the  recommendations  in  our  report  in  the  Sixty-third  Congress. 
I  assume  that  would  be  our  wish,  because  I  believe  those  recommen- 
dation are  sound. 

To  go  to  work  and  undertake  to  limit  the  power  of  the  board 
specifically,  in  every  possible  direction,  would  be  unwise  in  my  judg- 
ment. 

Mr.  Slechta.  Speaking  of  the  control  of  freight  rates  in  any  way, 
in  so  far  as  reducing  them  is  concerned,  let  me  cite  an  illustration 
that  may  possibly  illustrate  to  you  the  result  that  such  control  might 
have  in  some  cases.  One  of  our  competitors  in  the  Brazilian  service 
at  the  present  time  is  the  United  States  Steel  Corporation,  because 
they  run  a  subsidiary  line  which  they  call  the  United  States  &  Brazil  ■ 
Steamship  Co.  Recently  they  have  been  diverting  such  steamers  as 
they  could  charter,  and  two  of  their  steamers  have  been  chartered 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      659 

recently  from  the  American-Hawaiian  Line,  and  the  purpose  is  to 
use  those  steamers  that  have  been  diverted  in  their  own  business. 
In  fact,  we  ourselves  have  chartered  one  or  two  of  them  for  carry- 
ing coal  to  Brazil,  simply  because  we  did  not  want  them  delayed  by 
waiting  for  cargo  in  New  York.  A  few  days  ago  they  chartered  the 
Columbus^  which  is  a  steamer  of  about  10,500  tons,  one  of  the  narrow 
boats  of  the  American-Hawaiian  Line,  and  paid  $122,000  a  month  for 
her.  That  steamer  cost  between  $600,000  and  $700,000.  You  can  see 
that  the  American-Hawaiian  Line  within  six  months,  which  is  the 
term  of  the  charter,  will  be  able  to  build  a  new  vessel  from  what  she 
will  earn  on  that  one.  Within  a  week  another  vessel  of  the  same  type 
was  chartered  by  the  American-Hawaiian  Line  to  the  United  States 
Steel  Corporation  for  the  same  business  for  $146,000  a  month.  The 
rise  in  one  week  from  the  increased  demand  represents  $24,000.  That 
difference  alone  is  fully  twice  what  tliat  steamer  would  bring  in 
normal  times. 

The  Chairman.  They  want  that  steamer  for  what  purpose? 

Mr.  Slechta.  They  want  it  for  cari-ying  manganese  from  Brazil. 

The  Chairman.  To  what  place? 

Mr.  Slechta.  To  the  United  States. 

The  Chairman.  To  use  for  what  purpose? 

]\Ir.  Slechta.  As  a  matter  of  fact  the  stuff  is  sold  in  the  open 
market  in  Philadelphia.  But  the  j^oint  I  wanted  to  make  is  that 
there  you  have  an  American  companv  reaping  a  tremendous  profit 
from  the  operation  of  its  boats  in  that  service.  They  were  with- 
drawn from  the  Panama  Canal  service  because  the  Panama  Canal 
is  closed  and  they  did  not  wish  to  run  around  the  Plorn.  and  so  it  is 
taking  the  money  and  putting  it  in  the  bank.  Yerv  well.  Does  the 
Government  propose  to  do  anything  which  will  prevent  those  com- 
panies, such  as  the  American-HaAvaiian  Line,  from  obtaining  that 
maximum  return  and  taking  advantage  of  conditions  over  which 
they  have  absolutely  no  control?  The  American  Steel  Corporation 
IS  certainly  not  a  philanthropic  institution.  It  goes  to  them  and 
says  "  we  want  your  steamers  and  will  pay  any  price  you  want  for 
them."  That  is  practically  what  it  amounts  to.  And  this  bill  pro- 
poses to  put  boats  in  competition  with  the  American-Hawaiian  Line? 
I  do  not  say  that  in  the  way  of  criticism,  but  simply  to  point  out 
one  possible  result. 

The  Chairman.  We  had  a  gentleman  before  this  committee  the 
other  day  representing  the  American  Cast  Iron  Pipe  Co.,  of  Bir- 
mingham, Ala.  A  contract  is  to  be  let  in  Argentina  about  the  middle 
of  this  month,  I  think  on  the  14th.  for  26.000  or  28.000  tons  of  water 
pipe.  His  company  wants  to  bid  in  competition  with  the  British 
companies.  Do  you  know  where  he  can  get  the  tonnage  at  any 
price? 

Mr.  Slechta.  Surely.  He  can  get  tonnage  just  the  same  as  the 
Steel  Corporation  is  getting  that  tonnage  that  I  refer  to  now. 

The  Chairman.  He  says  that  the  lowest  rate  they  would  quote 
would  he  $30  a  ton.  and  they  would  not  guarantee  him  tonnage  at 
that  price. 

Mr.  Slechta.  He  can  charter  boats  if  he  wants  to.  if  he  wants  to 
pav  the  price. 

The  Chairman.  What  price? 


660     SHIPPING  BOAED;,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Slechta.  As  I  say,  that  is  an  illustration  that  the  present 
price  is  anywhere 

The  Chairman.  You  have  not  any  vessels  on  your  line  that  are 
now  available? 

Mr.  Slechta.  We  do  not  run  to  Argentina. 

The  Chairman.  Do  you  know  of  any  vessels  for  charter  that  could 
be  gotten  for  $12  to  $15  a  ton?  That  is  what  the  British  shipping 
interests  are  quoting  to  their  manufacturers — -a  price  of  about  $12 
to  $14  a  ton ;  and  the  lowest  price  he  can  get  is  $30  a  ton. 

Mr.  Slechta.  How  does  he  know  that  the  British  manufacturers 
are  getting  that  ? 

The  Chairman.  Because  he  has  investigated  it. 

Mr.  Slechta.  I  do  not  believe  it. 

The  Chairman.  I  do. 

Mr.  Slechta.  I  do  not,  because  I  know  too  much  about  freight 
rates  from  England  to  South  America. 

The  Chairman.  He  has  inA  estigated  it,  and  his  company  has  inves- 
tigated it. 

Mr.  Curry.  Do  you  not  think,  possibly,  that  condition  might  have 
been  brought  about  by  the  fact  that  British  manufacturers,  importers 
and  exporters,  have  an  interest  in  their  merchant  marine? 

Mr.  Slechta.  No.  That  is  true  in  a  very  few  cases.  In  the  coal  trade 
there  are  certain  large  shippers  of  coal  in  Wales  who  have  interests 
in  steamship  companies.  But,  so  far  as  the  manufacturing  interests 
of  Great  Britain,  as  a  rule,  are  concerned,  they  have  very  little  inter- 
est except  as  ordinary  investors  in  steamship  companies.  So  far  as 
the  management  of  them  are  concerned,  they  have  no  interest  in  them 
whatever.  The  British  steamship  agent  is  the  freest  man  in  the 
world,  and  he  takes  the  highest  amount  of  money  wherever  he  can 
get  it.     That  has  been  my  experience. 

Mr.  Curry.  It  is  a  fact,  is  it  not,  that  the  importers  and  exporters 
and  manufacturers  do  invest  in  the  minority  stock  of  the  merchant 
marine,  but  they  do  not  have  any  controlling  interest? 

Mr.  Slechta.  That  is  possible.  The  steamship  business  is  one  of 
the  most  prolific  sources  of  investment  and  revenue  in  Great  Britain, 
of  course. 

Mr.  Curry.  The  board  of  trade  looks  out  to  see  that  their  manu- 
facturers get  the  advantage? 

Mr.  Slechta.  Yes;  but  my  explanation  of  the  point  Judge  Alex- 
ander has  raised  is  this:  It  is  true  that  in  a  great  many  instances  rates 
from  Europe  at  the  present  time  are  lower  than  from  the  United 
States.  That  they  are  as  much  lower  as  you  point  out,  I  do  not 
believe. 

Mr.  Curry.  We  have  abundant  proof  that  the  British  manufac- 
turer gets  the  advantage. 

]\Ir.  Slechta.  Personally,  I  am  very  much  interested  in  the  sub- 
ject, and  I  do  not  believe  there  is  any  discrimination;  but  the  expla- 
nation of  it,  as  I  said  in  the  beginning,  the  exports  from  Europe  to 
South  America  have  fallen  off  tremendously  because,  in  the  first 
place,  prices  have  been  increased,  and,  in  the  second  place,  many 
manufacturers  have  devoted  their  productive  capacity  entirely  to  the 
production  of  munitions  of  war.  There  are  certain  things  which 
they  can  not  sell,  and  there  are  certain  other  things  on  which  the 
prices  have  increased  very  greatly,  and  they  can  not  buy  them  in 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      661 

South  America.  But  there  are  several  hirge  steamship  lines  oper- 
ating hirgely  for  the  benefit  of  the  passenger  service  and  for  which 
no  other  business  is  available,  like  the  Royal  Mail  Line,  the  Pacific 
Steam  Navigation  Co.,  the  Italian  lines,  one  of  two  French  lines 
which  still  operate,  and  two  Spanish  lines,  to  the  seacoast  of  South 
America  run  largely  because  of  the  passenger  business.  There  is  an 
enormous  passenger  business;  not  so  much  now,  but  before  the  war 
they  had  a  very  large  passenger  business  of  the  class  of  immigrant 
travel.  Those  boats  they  are  running  now  because  there  is  no  other 
place  for  them  to  run;  they  are  passenger  boats,  and  for  whatever 
cargo  capacity  they  have  they  offer  the  space  at  low  rates  because  the 
supply  of  tonnage  exceeds  the  demand,  comparatively  speaking.  For 
instance,  the  conditions  in  the   transportation   business   from   the 

United  States  to  South  America 

The  Chairman.  Here  is  what  Mr.  Lake  said;  see  if  his  informa- 
tion is  entitled  to  more  weight  than  the  opinion  you  have  just  now 
expressed.     I  am  reading  from  his  statement  before  the  committee: 

As  we  anticipated,  our  president  has  cabled  us  to  find  out  what  can  be  done 
in  the  way  of  froi.ulit,  so  that  he  can  nako  quotations.  Tn  order  to  know 
wliat  we  have  to  do  to  meet  competition,  Secretary  Kedfield,  at  our  request, 
cal)led  to  Mr.  Ilaldwin,  our  commercial  attache,  in  T-ondon,  to  ascertain  what 
the  frei,2;ht  rates  are  on  ca>^t-iron  pipe  from  British  ports  to  Argentina  at  the 
present  time.  Mr.  Baldwin  cabled,  in  reply,  that  the  basic  rates  prevailing 
ai-e  from  $14  to  $15  a  ton.  Since  this  cable  was  received  our  Mr.  McWane  has 
cabled  that  the  British  foundries  were  working  with  British  steamship  lines^ 
and  would  keep  us  out  if  they  could. 

He  said  the  lowest  rate  he  could  get  quoted  from  here  was  $30  a 
ton. 

Is  there  anything  else  you  want  of  this  gentleman;  w'e  have  an- 
other gentleman  here  this  morning  who  w^ants  to  be  heard? 

Mr.  Greene.  Suppose  you  reply  to  the  chairman's  question. 

Mr.  Slechta.  I  think  what  I  have  ah'eady  said  is  about  the  only 
ansAver  I  can  make  to  that;  and  that  is,  while  it  may  be  true  that 
the  steamship  people  are  assisting  the  manufacturers  there  to  get 
that  business,  it  is  simply  because  they  w^ant  to  fill  the  steamer  space. 
They  have  the  room  and  have  got  to  run  those  steamers  down  there 
an3^way;  it  is  not  because  they  want  to  shut  out  the  American  manu- 
facturer, because  those  lines  have  no  service  from  the  United  States. 

INIr.  RowE.  Your  steamship  company  frequently  makes  very  low 
rates? 

^  ]\Ir.  Slechta.  Yes,  sir.  I  can  refer  to  half  a  dozen  large  manu- 
facturers who  will  assure  you  we  have  given  them  rates  frequently 
in  competition  with  European  manufacturers  and  in  order  that  they 
could  get  the  business  we  have  cut  them  below  reasonable  rates. 

Mr.  Hardy.  I  think  you  made  the  remark  as  applied  to  normal 
times  just  now  when  you  said  in  fact  the  freest  agents  in  the  world 
were  the  English  shipping  companies  and  they  went  where  the 
dollar  called  them. 

Mr.  Slechta.  Absolutely. 

Mr.  Hardy.  That  it  was  the  fact  prior  to  this  condition  existing 
now.  And  what  the  European  governments  are  going  to  do  to 
compel  their  ship  lines  to  favor  their  ow^n  commerce  hereafter  is 
another  question. 

Mr.  Slechta.  I  agree  with  you  there  just  now. 


662      SHIPPING  BOAKD^  NAVAL  AUXILIAEV,  AND  MEECHANT  MAKINE. 

Mr.  HAitDY.  I  believe  our  investigation  of  the  shipping  combina- 
tion shows  that  the  shij^ping  line  hunted  the  money,  and  that  was  all. 

Mr.  Slechta.  Yes:  I  quite  agree  with  you. 

Mr.  Hardy.  That  is  a  different  situatitm  now. 

Mr.  Edmonds.  Mr.  Chairman,  I  would  like  to  ask  the  gentleman 
a  question.  If  normal  times  returned  and  if  this  board  places  in 
commission  between  here  and  Brazil  a  regular  running  freight  and 
passenger  line,  would  we  be  able  to  build  up  traffic  with  Brazil  itself 
for  exports  from  this  country  a  sufficient  quantity  of  traffic  to  guar- 
antee the  running  of  that  line '( 

Mr.  Slechta.  That  is  a  pretty  difficult  question  to  answer. 

Mr.  Edmonds.  Then,  I  will  put  it  in  a  little  more  concrete  way. 
Will  30ur  steamship  line  buy  coal  from  this  country  after  the  war 
is  over  or  will  they  buy  coal  from  Wales  as  they  have  heretofore? 

Mr.  Slechta.  That  is  something  that  can  not  be  fully  guaranteed, 
but,  personally— the  point  is,  after  the  war  is  over,  are  they  going 
back  to  England  for  it  I 

Mr.  Edmonds.  It  is  not  a  question  of  price  at  all  :f 

Mr.  Slechta,  Yes;  it  is,  too. 

The  Chairman.  In  other  words,  will  they  pay  $3  to  $4  a  ton  for 
coal  there  rather  than  $2.80  a  ton  here? 

Mr.  Slechta.  In  the  first  place,  there  is  that  condition  which  I 
referred  to  as  the  interest  of  certain  people,  who  have  the  coal  trade 
under  their  command  not  only  in  Wales  but  in  Brazil,  large  coal 
companies  with  deposits  in  Brazil  and  the  same  companies  more  or 
less  control  the  tonnage  and  they  can  make  the  freight  rates  to  suit 
their  own  convenience. 

Mr.  Edmonds.  Within  the  past  20  years  the  coal  men  of  the 
United  States  have  endeavored  to  capture  the  Brazilian  business. 
There  was  no  trouble  in  price,  no  trouble  with  freights,  and  no 
trouble  in  getting  the  boats. 

Mr.  Slechta.  There  was  trouble  in  getting  the  cargo  even  before. 

Mr.  Edmonds.  They  had  no  trouble  in  sending  full  cargo  freights 
there;  but  we  found  when  we  got  down  there  that  our  coal  was 
condemned  bj'  foreign  employees  of  the  different  steamers.  I  have 
talked  to  a  man,  who  has  been  in  San  Paulo  for  a  number  of  years, 
he  lives  in  my  neighborhood,  he  secured  and  had  charge  of  the  build- 
ing of  a  large  electric  plant  down  there,  and  he  has  had  charge  of 
it  since  it  was  ])uilt.  He  tells  me  you  can  not  overcome  the  objection 
that  is  made  to  the  quality  of  American  coal — unfairly,  I  claim. 

Mr.  Slechta.  There  is  no  doubt  about  it. 

Mr.  Edmonds.  Nevertheless,  they  have  foreign  employees  in  those 
places,  who  are  sent  there  l)y  those  companies,  and,  of  course,  capi- 
talists have  paid  out  money  for  construction  in  different  lines. 

Mr.  Slechta.  There  are  companies  in  Brazil  that  use  an  enormous 
tonnage  of  American  coal  and  they  claim  that  they  get  the  same  effi- 
ciency— now  that  their  firemen  have  learned  to  fire  American  coal — 
that  they  get  from  Welch  coal. 

Mr.  Edmonds.  I  say  it  was  unfair  competition,  there  was  no  ques- 
tion about  that.  But  our  coal  men  gave  up  sending  coal  down  there 
for  the  simple  reason  thej'  did  not  want  to  have  to  send  a  man  down 
there  after  every  cargo  to  show  the  men  how  to  burn  it  or  else  have 
it  condemned. 


i 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      663 

Vnother  thing  I  ^Yant  to  ask  you  as  an  American  and  not  as  the 
representative  of  the  Lloyd-Brazileiro,  and  that  is  this:  Do  you 
approve  of  taking  Porto  Rico  out  of  the  coastwise  traffic  or  do  you 
think  that  we  ought  to  retain  it  for  our  own  coastwise  ships? 

Mr.  Slechta.  It  is  pretty  difficult  for  me  to  answer  that  unoffi- 
<;ially,  because  I  am  somewhat  interested  in  it.  as  a  matter  of  fact,  not 
personally,  but  on  behalf  of  our  company.  We  have  just  recently 
changed  our  schedule  for  call  from  Barbados  to  Porto  Rico,  for  the 
reason  that  the  freight  rates  on  coal  carried  in  American  boats,  al- 
though the  American  boats  have  a  monopoly  of  the  coastwise  service, 
is  so  much  lower  than  it  is  in  foreign  boats. 

Mr.  Edmonds.  Your  line,  I  can  naturally  understand,  would  be 
very  glad  indeed  to  carry  freight  to  and  from  Porto  Rico  and  have 
it  opened  up  to  ocean  traffic;  but  as  an  American  would  you  like  to 

see  Hawaii  or  Porto  Rico,  as  a  shipper 

Mr.  Slechta.  Xo:  I  do  not  think  it  would  be  a  good  thing. 
Mr.  Edmonds.  You  would  not  want  to  see  Porto  Rico  and  Hawaii 
taken  out  of  the  coastwise  trade? 

Mr.  Slechta.  I  do  not  think  that  ought  to  be  done.  Hawaii  and 
Porto  Rico  are  a  part  of  the  United  States.  Why  not  cut  Florida  out, 
or  San  Francisco? 

Mr.  Edmonds.  You  think  they  ought  to  be  retained  as  they  are 
to-day? 

Mr.  Slechta.  Absolutely. 
Mr.  Edmonds.  And  Alaska,  of  course? 

Mr.  Slechta.  Yes;  they  ought  to  be  on  the  same  basis.  If  it  is 
desirable  to  give  the  coastwise  business  to  foreign  boats  in  any  part 
of  the  United  States,  give  it  to  all. 

The  Chairman.  American  ships  sailing  from  here  to  South  Amer- 
ica ought  not  to  be  permitted  to  carry  freight  to  or  from  ports  in 
the  United  States  or  Porto  Rico? 

Mr.  Slechta.  I  do  not  think  that;  no. 
The  Chairman.  That  is  what  he  wants  3^ou  to  say. 
Mr.  Slechta.  No. 

Mr.  Edmonds.  I  am  talking  about  foreign  ships,  Judge,  and  you 
know  I  am,  too. 

The  Chairman.  There  is  no  suggestion  here  that  foreign  ships  will 
do  it.  but  just  American  ships  under  the  American  flag.  I  am  op- 
posed to  foreign  ships  doing  that,  just  as  w^ell  as  you  are. 

Mr.  Edmonds.  I  know  you  are,  and  I  want  to  bring  it  out,  because 

I  know  3'ou  are  opposed  to  it;  but  I  call  attention  to  section  4,  on 

which  Secretary  Redfield  said  it  does  give  that  right  to  foreign  ships. 

Mr.  Curry.  Do  you  know  the  net  loss  sustained  by  the  Brazilian 

Government  in  running  a  Government-owned  line? 

Mr.  Slechta.  Do  you  refer  to  the  entire  line — the  entire  service — 
coastwise  as  well  as  New  York? 

Mr.  Curry.  You  can  take  both  together  if  you  wish  to, 
Mr.  Slechta.  As  far  as  the  New  York  service  is  concerned,  during 
the  last  eight  years  we  have  probably  come  out  about  even.  In  the 
coastwise  business,  since  the  war  started — since  the  Government  took 
it  over — they  have  been  able  to  ju.st  about  break  even,  I  believe;  and 
especially  since  the  war  startecl.  They  do  not  differentiate  closely 
enough  between  receipts  from  the  American  line  and  from  the  coast- 
wise business  so  that  I  can  say. 


664      SttirPlXG  BOAED,  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE. 

Mr.  CuRKY.  They  lump  both  together? 

Mr.  Slechta.  They  have  to,  because  our  boats  that  run  from  New 
York  also  carry  cargo  coastwise  in  Brazil. 

Mr.  CuRKT.  You  think  you  come  out  about  even? 

Mr.  Slechta.  I  think  so. 

Mr.  Curry.  Without  charging  anything  off  for  depreciation? 

Mr.  Slechta.  Yes;  exactly. 

Mr.  Bodenbero.  But  you  have  no  figures  on  that  and  do  not 
know  definitely? 

Mr.  Slechta.  I  have  the  figures  published  by  the  Government; 
but  they  are  not  closely  enough  analyzed  so  that  a  steamship  man 
could  really  sa3^ 

Mr.  Hardy.  D(,es  the  Brazilian  Government  for  the  Lloyd-Bra- 
zileiro  permit  those  ships  to  be  bought  anywhere  it  can  buy  them 
cheapest,  or  must  they  buy  ships  built  in  Brazil? 

Mr.  Slechta.  They  do  not  build  any  ships  in  Brazil,  practically. 

Mr.  Hardy.  They  buy  wherever  they  can  get  them  the  cheapest? 

Mr.  Slechta.  Yes;  they  bought  all  of  them. 

Mr.  Hardy.  But  you  would  feel  very  much  opposed  to  limiting 
those  ships  engaged  in  the  American  lines  and  refusing  to  let  them 
touch  at  intermediate  points  and  get  cargo? 

Mr.  Slechta.  I  do  not  see  Avhy  that  handicap  should  be  placed 
upon  American  ships  engaged  in  the  foreign  trade. 

JSIr.  Hardy!  Exactly.  You  think  American  ships,  under  the 
American  flag,  owned  by  American  citizens,  should  be' allowed  to  call 
on  their  whole  course  and  to  load  and  unload  cargo? 

Mr.  Slechta.  I  certainly  do. 

Mr.  Edmonds.  You  mean  an  American-constructed  ship? 

Mr.  Slechta.  I  would  not  say  that.  I  am  thoroughly  in  favor  of 
removing  every  restriction  upon  increasing  the  American  merchant 
marine.  If  they  can  buy  ships  cheaper  somewhere  else,  if  they 
can  build  ships  cheaper  somewhere  else,  or  if  they  can  man  ships 
cheaper  somewhere  else,  that  is  the  way  I  am  Avilling  to  operate. 

Mr.  Ed:monds.  You  want  an  American-owned  ship  to  stop  wherever 
it  wants,  when  it  leaves  New  York,  along  its  routes 

Mr.  Slechta.  Exactly.  The  Chicago.  New  York  &  St.  Paul  are 
more  British,  as  far  as  capital  is  concerned,  than  they  are  American. 

Mr.  Greene.  Would  you  believe  in  keeping  foreign  officers  on  those 
vessels  ? 

Mr.  Slechta.  I  would  not  say  officers;  no.  I  think  they  ought  to 
have  American  officers — at  least  Americans  or  those  who  intend  to 
become  Americans  and  have  declared  their  intention  to  become 
Americans. 

]VIr.  Greene.  That  is,  you  would  not  favor  putting  vessels  we 
happen  to  buy  helter-skelter  under  foreign  officers  who  happen  to 
be  running  them  at  that  time,  would  you? 

Mr.  Slechta.  It  is  a  question  of  expediency,  possibly.  If  we  had 
the  right  kind  of  American  officers,  I  would  give  them  the  first 
chance. 

Mr.  Greene.  There  was  evidence  furnished  that  there  were  an 
ample  number  of  officers  waiting  for  a  berth,  but  they  did  not  get  it. 

Mr.  Slechta.  Of  course,  I  think  it  is  a  pretty  difficult  proposi- 
tion.    I  think  it  would  be  a  little  bit  unreasonable  to  insist  the 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      665 

minute  the  ship  was  transferred  from  the  British  flag  to  the  Ameri- 
can flag  that  those  officers  should  lose  their  positions  to  Americans 
just  simply  because  Americans  were  given  the  positions  as  officers. 
1  think  there  ought  to  be  a  certain*  time  given  for  the  owners  to 
transfer  and  change  their  officers. 

ISIr.  Greene.  You  would  not  think  they  ought  to  be  given  seven 
years'  time,  would  you? 

Mr.  Slechta.  No;  I  do  not.  I  think  six  months  or  a  year  would 
be  ample. 

Mr.  Greene.  I  would  not  give  them  seven  minutes. 

Mr.  Slechta.  That  is  a  matter  of  opinion,  of  course. 

STATEMENT  OF  JAMES  L.  COWLES,  PRESIDENT  OF  THE  WORLD 

POSTAL  LEAGUE. 

I  am  the  president  and  treasurer  of  the  World  Postal  League,  an 
association  located  at  810  Colorado  Building,  AYashington,  D.  C, 
and  having  for  its  purpose  the  establishment  of  a  United  States  of 
the  world — Avith  no  moie  legal  barriers  to  intercourse  between  the 
different  States  than  now  exist  between  the  States  of  our  Union  and 
bound  together  by  a  great  postal  service — international  postal  trans- 
ports, international  postal  cables — a  service  covering  the  entire  ma- 
chinery of  public  transportation  and  transmission,  earth,  air,  and 
sea,  a  ser\  ice  supported  by  low,  uniform  tolls,  door  to  door  every- 
where within  the  system  of  mechanical  transport. 

cooperation  vs.  competition. 

The  most  of  the  evils  of  our  time  have  come  down  to  us,  I  believe, 
from  the  days  when  the  common  trade  of  mankind  was  that  of  the 
hunter,  and  business  consisted  chiefly  in  exchanges  of  blows  with 
club  and  battle-ax.  Fear,  death-dealing  fear,  checked  all  human 
advancement. 

In  those  days  each  man  differed  from  the  other,  chiefly  as  do  the 
beasts  and  birds  of  prey,  in  brute  force  and  in  cunning;  the  lion  and 
the  eagle  were  the  loftiest  of  human  ideals;  "Might  was  right"  and 
the  most  successful  killer  was  king. 

To  the  men  of  that  era,  the  earth  was  a  great  plain,  broken  here 
and  there  by  lofty  mountains,  impassible  rivers,  and  vast  unknown 
oceans;  but  yet  a  plain  producing  eveiywhere  the  same  things — other 
animals  or  other  men  upon  whom  the  superior  lion  or  eagle  might 
prey. 

Creators  of  nothing,  exploiters  neither  of  the  forest,  the  field,  or 
the  mine:  when  for  any  cause  the  needed  supply  of  prey  failed  in 
any  particular  hunting  ground,  the  only  recourse  left  to  the  hunter 
was  to  die  or  to  kill  and  eat  his  neighbor  and  his  neighbor's  prey. 
Meat  was  the  common  diet,  and  whether  brute  or  human,  fish  or 
fowl,  was  a  matter  of  little  moment.     All  men  were  cannibals. 

In  those  good  old  times  the  roads  were  trails,  and  on  this  Conti- 
nent, in  lack  of  other  burden-bearing  animals,  land  transport  even 
as  late  as  a  hundred  years  ago,  rested  chiefly  on  the  back  of  the  In- 
dian women,  the  hunter's  wife.  Here  each  man's  gain  was  indeed 
another  man's  loss,  and  each  tribe  was  perforce  it's  neighbor's  enemy. 


666      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Here,  competition  "The  survival  of  the  superior  beast  or  bird  of 
prey  Avas  the  common  hiw,  brute  and  human." 

In  the  East,  on  the  other  hand,  the  horse,  the  ox,  the  ass,  the  camel, 
and  the  elephant,  long  ago  relieved  the  woman  somewhat  from  her 
degradation  as  a  beast  of  burden,  and  the  wise  men  of  the  East, 
taught  by  their  mothers  other  trades  than  that  of  the  hunter,  early 
conceived  the  truth  that  "Competition"^ — ^the  law  of  the  brute — 
did  not,  of  necessity,  apply  to  man. 

In  the  slow  development  of  the  divine  attributes  that  separated 
them  from  the  brutes,  the  Eastern  sages,  becoming,  in  a  measure, 
creators — sons  of  God,  exploiters  of  field,  forest,  and  mine,  dis- 
covered in  the  benefits  arising  from  the  exchange  of  their  creations 
that  cooperation  might  be,  or  at  least  might  become,  the  law  of 
human  life,  and  that  mankind  might  live  as  brothers. 

The  comparatively  safe  navigation  of  their  mid-earth  seas  favored 
these  civilizing  ideas,  and  when  it  was  found  that  the  earth  was  a 
sphere,  with  infinite  varieties  of  soil  and  climate,  each  part  adapted 
to  the  cultivation  of  products  that  satisfied  the  other's  needs,  then  it 
became  evident  that  the  realization  of  the  Prophet's  dream  only 
awaited  the  inventor's  deed. 

The  deed  is  well-nigh  done.  The  Indian  woman,  dragging  her 
painful  way  along  the  forest  trail,  has  given  place  to  the  electric  car 
on  the  T-rail:  the  dugout  and  the  sailboat  have  given  way  to  the 
steamboat  ancl  the  steamship ;  the  wireless  telegraph  and  telephone 
have  taken  the  place  of  the  signal-fire;  the  carrier  pigeon  has  given 
place  to  the  airship.  The  natural  obstacles  to  human  intercourse  are 
on  the  verge  of  annihilation. 

The  main  lines  of  the  world's  great  circulating  and  nervous  system 
that  is  soon  to  transform  the  old  hunting  grounds  of  the  cannibals  to 
the  abode  of  the  sons  and  daughters  of  God — each  by  virtue  of  his  or 
her  divinity,  the  superior  and  therefore  the  complement  of  the 
other — the  main  lines  of  this  greatest  of  human  creations  are  already 
built. 

The  land,  water,  and  air  lines — railway,  trolley,  auto,  and  airship 
lines — motor-boat,  steamboat,  and  steamship  lines,  telegraph  and  tele- 
phone lines,  wire  and  wireless  of  our  modern  world  are  its  circulat- 
ing and  nervous  S3^stem,  and  the  ocean  transports  of  to-day  are  i 
most  essential  part  of  this  mechanism. 

Upon  the  construction,  maintenance,  and  operation,  and  upon  the 
taxes  levied  for  the  use  of  this  life-determining  mechanism,  more 
than  upon  anything  else,  does  the  general  economic,  as  well  as  the 
social  and  political  development  of  modern  humanity  depend. 

Left  in  the  control  of  private  speculators  determining  the  rates  for 
its  use  upon  the  value  of  the  service  rendered,  it  will  become  a  public 
curse,  as  was  the  case  with  the  Cursus  Publicus,  the  transport  service 
of  Imperial  Rome. 

On  the  other  hand,  managed  by  public  servants,  with  rates  for  its 
use  determined  on  the  cost  of  the  service  rendered,  or,  it  may  be,  run 
absolutely  free  and  supported  by  the  taxation  of  the  districts  which 
it  serves  and  to  which  it  gives  practically  all  their  commercial  value, 
every  step  in  its  improvement  will  be  for  the  common  advancement, 
with  the  result  that  in  the  course  of  time  this  old,  warring  earth  may 
become  a  bit  of  Heaven — a  home  in  which  every  human  being  shall 
find  delieht  in  the  service  of  the  other. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      667 

Competition  between  the  different  parts  of  this  great  mechanism 
is  as  absurd,  as  wasteful,  and  as  harmful  as  competition  would  be 
between  the  arteries,  veins,  and  nerves  of  the  human  body. 

In  recent  years  Congress,  State  legislatures,  cities,  and  towns  have 
expended  hundreds  of  millions  of  dollars  of  the  hard  earnings  of 
our  common  people  in  railway,  trolley,  river,  and  harbor  improve- 
ments, which,  under  the  control  of  our  great  circulating  and  nervous 
system  by  pi-ivate  speculators,  have  often  resulted  in  increased  rates 
of  transportation,  increased  cost  of  living,  and  lessened  opportunities 
for  getting  a  living. 

Notwithstanding  the  scores  of  millions  of  dollars  spent  for  the 
improvement  of  navigation  upon  the  Great  Lakes,  the  rail,  lake-and- 
rail  rate  on  flour  and  mill  stuffs  from  Minneapolis  to  Xew  York  City 
is  3  cents  a  hundred  pounds  higher  than  it  was  15  years  ago — 23  cents 
to-day.  as  against  20  cents  in  iSOO. 

And  the  same  thing  is  true  as  to  ocean  transportation.  The  Mer- 
chant Marine  and  Fisheries  Committee  of  the  Sixty-third  Congress 
infoi'med  us  that  in  the  four  years  previous  to  the  European  war  the 
specuhitors  controlling  trans- Atlantic  trade  had  increased  their  rates, 
in  some  cases  over  100  per  cent;  this  in  spite  of  the  fact  that  during 
the  same  period  the  public  on  both  sides  of  the  Atlantic  had  expended 
immense  suins  for  their  harbor  improvements. 

Great,  however,  as  were  the  enormous  taxes  levied  upon  the  general 
public  by  the  world's  ocean-transport  speculators  before  the  war  now 
waging  in  Europe,  they  w'ere  as  nothing  compared  with  the  taxes 
now  levied  by  them  upon  our  suffering  w^orld,  in  some  instances  seven 
times  as  much  as  they  were  12  months  ago.  Some  of  their  vessels  are 
said  to  have  paid  for  themselves  in  a  single  trip. 

POSTAL   TKANSPOr.TS. 

If  the  world  is  to  receive  any  adequate  i-eturn  for  the  $100,000,000 
of  labor  expended  on  the  Panama  Canal,  its  business  must  be  run  not 
by  private  S])eculators.  for  private  profit,  as  our  land  service  is  run 
to-day,  but  by  the  representatives  of  the  Americans  Avho  have  built 
the  canal  for  the  common  welfare. 

The  private  speculators  now  controlling  the  world's  ocean  traffic 
tax  our  Government  for  the  transport  of  our  mails  across  the  Atlan- 
tic, by  steamers  not  under  contract.  United  States  register,  letters 
(sealed  parcels)  80  cents  a  pound.  $1,600  a  ton;  on  other  mail  matter 
(unsealed  parcels)  8  cents  a  pound.  $160  a  ton;  foreign  register,  let- 
ters, 35  cents  a  pound,  $700  a  ton :  other  matter,  4^  cents  a  pound,  or 
$90  a  ton — the  cost  to  the  steamships  being  the  same  in  either  case. 

Under  its  mail  contract,  New  York  to  Southampton,  $1  a  mile, 
regardless  the  mail  handled,  the  International  Mercantile  Marine  Co. 
levies  a  tax  of  over  15  cents  a  pound,  over  $300  a  ton  on  all  the  mail 
carried.  Similar  taxes  are  levied  upon  our  Government  in  all  our 
ocean  mail  traffic,  and  yet  the  express  companies  doing  business  be- 
tween New  York  and  London  serve  their  large  patrons  at  less  than 
$20  a  ton.  With  Government-owned  ships,  the  business  might  well 
be  done  for  less  than  $10  a  ton. 

A  weekly  naval  mail  line  of  well-equipped  fast  steamers,  ocean 
postal  transports,  the  best  of  their  kind  upon  the  ocean,  run  by  officers 


668      SHIPPING  BOAED,  NAVAL  AUXILIARY^  AND  MERCHANT  MARINE. 

and  men  of  the  American  Navy  between  New  York  and  San  Fran- 
cisco, at  rates  determined  not  on  what  might  be  exacted  from  the 
public  but  on  the  cost  of  the  service  rendered,  would  be  an  object 
lesson  as  to  the  possibilities  of  a  Government-owned  merchant  marine 
that  would  astound  the  world.  The  establishment  of  similar  lines 
jointly  owned  and  operated  by  this  country  and  the  States  of  South 
America  would  be  great  steps  toward  the  advancement  of  the  world's 
peace  and  the  world's  prosperity. 

The  United  States  of  the  world,  with  all  legal  barriers  to  inter- 
course between  the  different  States  abolished,  and  all  physical  bar- 
riers overcome  by  a  world  postal  service  covering  the  entire  business 
of  public  transportation  and  transmission — "  the  parliament  of  man ; 
the  federation  of  the  world,"  the  dream  of  the  poet  Tennyson  in 
1812 — is,  we  hope,  to  quickly  follow  the  close  of  the  European  war. 

Inaugurated  in  1874,  by  Dr.  Stephan's  establishment  of  an  inter- 
national 5-cent  half -ounce  (soon  to  be  2  cents  an  ounce)  letter  post, 
it  remains  to  so  extend  this  great  service  that  within  a  few  brief 
years  the  weakest  hand,  the  most  timid  voice  may  reach  to  the  ends 
of  the  earth  and  command  its  richest  treasures. 

The  advantages  to  follow  the  abolition  of  the  legal  barriers  to 
intercourse  between  the  nations  have  been  conclusively  proved  by 
our  own  history. 

The  benefits  that  would  accrue  from  a  world-wide  system  of 
door-to-door,  low,  uniform  postal  tolls  have  been  clearly  demon- 
strated in  our  50-year-old  flat  letter  post,  our  30-year-old  flat  rate 
magazine  and  newspaper  pest,  in  the  flat-rate  commcdit}'  service  of 
our  continental  railroad  traffic  and  in  the  flat-rate  passenger  service 
of  our  city  trolley  lines. 

When  our  public  transport  machinery  is  run  by  the  public  au- 
thority, with  the  public  convenience,  the  public  security,  the  public 
prosperity,  its  sole  aim,  the  service  will  be  infinitely  safer,  better, 
and  less  expensive  than  to-day.  The  voters,  equal  joint  stockholders 
in  our  great  public  business,  will  not  submit  to  slipshod  management 
or  to  public  plunder.  Ultimately,  the  service  will  be  absolutely 
free  and  will  be  supported  as  our  common  highways  and  bridges  are 
supported  to-day,  by  the  taxation  of  the  districts  which  the  machin- 
ery serves,  and  to  which  it  gives  their  commercial  value.  "While,  how- 
ever, it  is  supported  by  tolls,  it  will  be  insisted  that  these  tolls  shall 
be  altogether  regardless  of  distance,  and  as  to  merchandise  or 
produce  shall  be  determined  simply  by  the  weight  of  the  parcel  car- 
ried and  the  space  it  may  occupy.  As  to  any  special  care  received, 
that  will  be  a  matter  of  insurance. 

If  the  Titanic  had  been  a  postal  transport  owned  and  operated 
either  by  the  United  States  or  Great  Britain,  or  by  the  two  coun- 
tries in  cooperation,  she  would  hardly  have  met  her  fate  running 
at  25  miles  an  hour  among  the  icebergs,  for  a  speed  record  intended 
to  win  the  patronage  of  a  few  wealthy  travelers,  a  large  part  of 
whose  expenses  are  paid  b}-  their  humbler  friends  in  the  steerage. 

Our  National  Government — the  great  joint-stock  corporation  in 
which  every  voter  has  an  equal  share — is  the  only  power  that  can  be 
safely  intrusted  with  the  ownership  and  operation  of  the  circulating 
and  nervous  system  of  our  national  life. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      669 

The  substitution  of  electricity  for  steam  in  land  transportation  is 
cutting  down  the  cost  of  the  business  full  one-half.  Similar  improve- 
ments in  water  transportation  are  producing  similar  results. 

On  the  St.  Paul  Railway  in  Montana  the  electric  engines  will  do 
away  with  hauling  coal,  coal-storage  yards,  and  water  tanks,  and  will 
lengthen  the  present  freight  divisions  of  100  miles  to  at  least  200 
miles.  Their  freiglit  locomotives  now  in  use  haul  1,650  tons  at  a 
speed  of  8  to  10  miles  an  hour.  The  electric  locomotives  are  expected 
to  haul  2,500  tons  at  15  to  20  miles  an  hour.  On  the  down  grades  the 
motors  will  be  reversed,  thus  acting  as  brakes  and  at  the  same  time 
storing  up  powder  for  use  on  the  next  rise.  There  will  of  course  be 
an  important  saving  of  labor.  The  Diesel  oil  engine  is  revolutioniz- 
ing ocean  transportation. 

Note  the  possibilities — with  low-rate  Government  bonds  substituted 
for  the  high-rate  bonds  and  stock  of  private  ow^nership,  with  our  ma- 
chinery of  transportation  and  transmission  run  by  electricity  devel- 
oped by  water  power  or  from  foal  at  the  mines  and  distributed  by 
cable,  with  all  merchandise  in  a  common  class,  the  countless  small 
parcels  of  individual  products  of  the  old  classified  service  giving  place 
to  a  comparatively  few  large  parcels  made  up  of  several  different 
l^roducts.  with  persons  and  produce  transported  from  starting  point 
to  destination  over  the  lines  of  lowest  grades,  least  obstructive  curves, 
and  shortest  distance,  with  the  machinery  adapted  to  each  particular 
service  used  in  every  instance,  and  with  the  lowest  local  rate  of  to-day 
adopted  as  the  uniform  standard  rate  for  all  distances,  the  schedule 
of  our  international  flat-rate  post  office  will  be  something  as  follows: 

r)0()r  to  door  within  the  system  of  mochanical  transport. 

Merchandise  and  produce  rates  determined  by  space  and  weight;  extra  care 
and  special  service  to  be  met  by  insnrance.     All  matter  to  l)e  in  one  class. 

BnJk  freight  rates,  .$1  per  ton — 40  cubic  feet  space. 

Parcels,  bulk  limit  up  to  100  pounds,  2  cubic  feet  space;  over  100  to  200 
pounds,  4  cubic  feet  space. 

Rates. — Sealed  parcels  requiring  preferential  delivery  and  special  care  (valu- 
able lettei's,  marked  "preferential  delivery  ")  up  to  1  pound,  2  cents. 

Ordinary  parcels,  sealed  or  unsealed,  up  to  1  pound,  1  cent ;  over  1  to  5 
pounds,  2  cents ;  over  5  to  11  pounds,  5  cents ;  over  11  to  30  pounds,  10  cents ; 
over  30  to  60  pounds,  15  cents ;  over  60  to  100  pounds,  20  cents ;  over  100  to  200 
pounds,  the  ordinary  barrel,  25  cents,  etc. 

Transmission  services. — 10  cents  telegrams ;  3  cents  telephones. 

Passenger  serviee. — Millions  of  passengers  are  transported  over  the  Alps  by 
the  Swiss  post  every  year. 

Rates. — Local  services,  making  all  stops  (like  city  trolley  services^),  5  cents 
a  trip;  express  services,  stopping  at  distances  10  to  40  miles,  25  cent  a  trip;- 
limited  services,  stopping  at  greater  distances  or  over,  $1  a  trip.  And  the 
receipts  will  be  infinitely  larger  than  they  are  to-day. 

Baggage. — Subject  to  parcel  rates.  Save  where  carried  in  hand,  there  will  be 
no  free  baggage. 

Special  services. — For  parlor  and  sleeping  cars,  as  well  as  for  freight  handled 
in  cars,  heated  in  winter  and  cooled  in  summer,  the  rates  will  be  on  the  same 
cost  of  the  service  basis. 

Insurance  service,  quick  and  safe,  secured  by  insurance  against  loss,  damage, 
or  delay. 

With  such  an  international  postal  service  and  w^ith  the  old  legal 
restrictions  to  international  intercourse  abolished,  a  new  world  will 
come  into  being  within  w^hich  war  will  be  as  unthinkable  as  it  is 
to-day  within  our  American  Union. 
32910—16 43 


670     SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

If,  however,  war  may  come,  the  absolute  control  of  our  machinery 
of  public  transportation  and  transmission — earth,  air,  and  water 
lines,  national  and  international — will  give  us  such  an  advantage  over 
our  foes  that  a  very  small  army  and  navy  will  suffice  for  our  com- 
plete protection. 

Is  this  system  of  rates  absurd  ?  It  is  based  on  years  of  study  and 
on  principles  as  certain  as  the  law  of  gravitation. 

Gentlemen,  the  systems  of  land  and  ocean  transportation  can  not 
be  long  separated.  They  must  be  joined  together  eventually,  and 
they  should  be  joined  together  immediately.  If  circumstances  are 
for  a  time  to  keep  them  apart,  an  ocean  merchant  marine,  a  system 
of  ocean  postal  transports  is  an  immediate  necessity,  and  our  busi- 
ness relations  with  South  America  demand  the  establishment  of  a 
system  of  ocean  postal  transports  jointly  owned  and  operated  by 
ourselves  and  the  different  States  of  South  America,  a  service  guar- 
anteeing at  once  equality  of  transport  rates  and  transport  privileges 
to  all  their  respective  citizens  as  Avell  as  the  joint  protection  of  their 
persons  and  produce  from  attack  by  any  outside  power. 

A  service  of  this  character  proposed  to  our  South  American 
friends  could  hardly  fail  of  their  acceptance,  and  our  American 
world  would  enter  upon  an  era  of  peace  and  of  prosperity  such  as 
<he  world  has  never  known. 

The  movement,  inoieovei-.  would  prove  so  attractive  that  all  the 
other  nations  of  the  world,  those  at  peace  and  those  at  war,  would 
hasten  to  bring  themselves  within  the  new  cooperative  world  and  to 
share  its  benefits. 

Gentlemen,  the  postman  is  to  take  the  place  of  the  warman;  the 
postal  car  of  the  field  cannon;  the  postal  transport  of  the  man-of- 
war.  A  postal  boycott  will  quickly  bring  any  recalcitrant  member 
of  the  great  cooperative  commonwealth  to  terms.  If  any  outside 
nation  should  seek  to  prey  upon  any  member  of  the  cooperative 
commonwealth  its  international  police,  costing  its  members  the 
merest  trifle,  will  be  quite  sufficient  to  meet  the  situation. 

Gentlemen,  you  may  play  a  great  part  in  the  transformation  of 
our  old  warring  earth  into  a  world  cooperative  commonwealth.  I 
congratulate  you  upon  the  opportunity  for  world  service  that  is 
before  you. 


CREATING  A  SHIPPING  BOARD,  A  NAVAL  AUXILIARY,  AND  A 
MERCHANT  MARINE. 


Committee  on  Merchant  Marine  and  Fisheries, 

House  of  Representatives, 

Saturday,  March  Jj.,  1916. 
The  committee  met  at  10  o'clock  a.  m.,  Hon.  Joshua  W.  Alexander 
(chairman)  presiding. 

STATEMENT  OF  MR.  GEORGE  P.  HAMPTON,  EDITOR  OF  THE 
FARMERS'  OPEN  FORUM,  BLISS  BUILDING,  WASHINGTON, 
D.  C. 

Mr.  Hampton.  In  1906  and  1907,  at  the  request  of  the  master  of 
the  National  Grange,  I  took  charge  of  the  farmers'  fight  against 
ship  subsidies  and  more  or  less  continuously  since  then,  both  officially 
and  unofficially,  I  have  kept  close  track  of  the  farmers'  interest  in 
the  development  of  an  American  merchant  marine.  As  a  member 
of  the  grange  I  wish  to  emphasize  and  indorse  the  position  taken 
by  the  representatives  of  the  grange  who  have  already  appeared 
before  this  committee  at  these  hearings — Mr.  Western  Starr,  of  the 
Maryland  Grange,  and  Mr.  John  A.  McSparran,  the  master  of  the 
Pennsylvania  State  Grange  and  secretary  of  the  National  Grange 
legislative  committee. 

The  Chairman.  Right  at  this  point  I  will  ask  you  if  the  farmers 
of  the  L^nited  States  are  interested  in  the  development  of  our  mer- 
chant marine. 

Mr.  Hampton.  They  are;  and,  in  my  judgment,  they  are  unquali- 
fiedly in  favor  of  the  Government  ownership  and  operation  of  ships 
built  at  the  Government's  expense. 

The  Chairman.  The  point  I  wanted  to  emphasize  is,  if  it  is  a  fact 
that  they  are  interested  in  the  development  of  our  merchant  marine, 
and  why. 

Mr.  Hampton.  I  was  going  to  come  to  that,  Mr.  Chairman.  Mr. 
McSparran  testified  that  he  represented  the  granges  of  the  United 
States.  I  think  he  could  very  properly  have  added  that  he  not 
only  represented  the  granges  of  the  United  States,  but  that  he  repre- 
sented the  farmers'  unions  of  the  United  States;  because  I  have  here, 
which  I  would  like  to  have  placed  in  the  record,  an  official  report 
of  the  conference  of  the  officers  of  the  farmers'  union  and  of  the 
National  Grange,  which  met  here  in  Washington  a  short  time  ago  and 
agreed  upon  a  working  program.  I  would  like  to  put  in  the  whole 
report — it  is  short — so  that  you  will  have  it  in  the  record.    You  will 

671 


672      SHIPPINO  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

note  that  it  includes  working  for  Government-owned  merchant  ves- 
sels as  part  of  the  program. 

(The  report  above  referred  to  follows.) 

LEGISLATIVE  COMMITTEE'S  CONFEKENCE  WITH  FARMERS'  UNION. 

At  the  call  of  the  national  master,  the  legislative  committee  of  National 
Grange,  together  with  several  of  the  near-by  State  masters,  assembled  at  Wash- 
ington. 

•••A  *  *  * 

The  members  of  the  grange  were  several  times  in  conference  with  the  repre- 
sentatives of  the  farmers'  union,  and  planned  to  work  together  for  rural-credit 
legislation  along  the  lines  laid  down  by  the  national  meetings  of  both  organiza- 
tions, for  the  establishment  of  a  Government-owned  plant  for  the  taking  of 
nitrogen  from  the  atmosphere,  for  Government-owned  merchant  vessels,  for  a 
highly  progressive  income  tax,  and  for  the  completion  of  the  legislation  to  make 
denatured  alcohol  a  commercial  possibility  at  a  reasonable  price.  It  would 
be  well  for  our  people  to  get  a  clear  understanding  of  the  reason  why  we  have 
not  ere  this  received  the  benefits  that  were  years  ago  heralded  would  follow  the 
passage  of  the  denatured-alcohol  law. 

You  can  do  a  great  work  toward  the  creation  of  public  sentiment  upon  these 
questions  if  you  will  see  that  articles  of  value  that  appear  in  our  grange  papers 
are  given  to  the  local  papers  in  the  several  communities  for  republication. 

John  A.  McSparran. 

Mr.  Hampton.  I  have  also  some  additional  resolutions  here.  Mr. 
McSparran  in  his  testimony  filed  resolutions  in  favor  of  Government 
owned  and  operated  ships  passed  by  the  National  Grange,  and  also 
resolutions  adopted  by  the  Pennsylvania  State  Grange.  I  have  here 
resolutions  adopted  by  the  Washington  State  Grange  and  resolutions 
by  the  Idaho  State  Grange  in  favor  of  Government  owned  and  oper- 
ated ships,  which  I  would  like  to  have  inserted  in  the  record. 
(The  resolutions  above  referred  to  are  as  follows:) 

GOVERNMENT  OWNED  AND  OPERATED  SHIPS. 

Resolutions  adopted  by  the  Washington  State  Grange,  Patrons  of  Husbandry, 
annual  meeting,  Centralia,  Wash.,  June  1-5,  1915 : 

"  Whereas  unregulated  foreign  freight  rates  on  the  staples  of  agriculture  result 
in  the  loss  of  millions  of  dollars  annually  by  the  farmers  of  America,  the 
uncertainty  of  such  rates  offering  opportunity  for  speculators  and  gamblers 
to  manipulate  the  domestic  markets ;  and 
"  Whereas  one  of  the  most  effective  ways  to  stabilize  such  rates  and  to  prevent 
these  great  losses  to  the  farmers  is  to  establish  lines  of  ships  from  all  the 
principal  ports  of  the  United  States  to  all  foreign  countries,  such  ships  to 
be  owned  and  operated  by  the  Federal  Government :  Therefore 
"  Resolved,  That  we  favor  the  building  up  of  a  Government  owned  and  oper- 
ated merchant  marine,  with  free  ports  of  entry  to  all  ships  of  such  merchant 
marine." 

Resolutions  adopted  by  Idaho  State  Grange,  aninial  meeting,  January,  1916: 

"  Whereas  the  farmers  of  Idaho  and  other  Pacific  States  are  vitally  concerned  in 

adequate  steamship  service  to  give  us  a  profitable  outlet  for  our  surplus 

crops ;   and 
"Whereas  facilities  for  ocean  delivery  to  our  eastern  and  foreign  markets  are 

at  present  highly  unsatisfactory,  and  under  the  present  system  of  operation 

no  real  relief  being  in  sight:  Be  it  therefore 
"Resolved,  That  we  favor  the  enactment  by  the  Congress  of  the  United  States 
at  the  present  session  of  a  law,  the  purpose  of  which  shall  be  the  establishment 
of  a  merchant  marine  by  the  Government.  Such  action  would  bring  great  com- 
mercial benefit  to  the  farmers  of  this  State,  and  our  legislative  committee  is 
hereby  instructed  to  take  the  matter  Tip  with  our  Representatives  in  Congress." 


SHIPPING  BOARD^  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      673 

Mr.  Hampton.  In  addition  to  these  resolutions  the  American 
Society  of  Equity,  the  third  largest  farmers'  organization  in  the 
United  States,  has  adopted  similar  resolutions;  as  has  also  the  Tri- 
State  Grange  Growers'  Association  at  their  annual  convention  held 
at  Fargo,  N.  Dak.,  and  the  Farmers'  Cooperative  Association  of 
South  Dakota  in  annual  convention,  Watertown,  S.  Dak.  These 
meetings  have  all  taken  place  lately.  Similar  action  is  being  taken 
by  the  farmers'  organizations  throughout  the  country. 

Mr.  Greene.  May  I  ask  you  a  question  there? 

Mr.  Hampton.  Certainly. 

Mr.  Greene.  Are  these  resolutions  all  in  the  same  form  and  in 
the  same  language? 

Mr.  Hampton.  No;  they  are  not.  Here  are  two  or  three  resolu- 
tions. They  are  essentially  the  same,  but  each  committee  drafted 
its  own  resolutions,  making  modifications  as  they  saw  fit.  The  actual 
wording  of  the  resolutions  can  easily  be  seen  b}^  comparing  them. 
Of  course,  I  can  read  them  to  you. 

Mr.  Greene.  Oh,  no:  it  is  not  necessary  to  read  them,  as  long  as 
they  are  going  into  the  record.  I  merely  asked  you  that  question 
whether  it  is  a  definite  plan  of  the  parent  organization  to  send  out 
the  same  form  of  resolution  to  be  adopted. 

Mr.  Haimptgn.  No.  The  position  of  the  National  Grange  or  any 
of  these  farm  organizations  is  merely  advisory.  It  is  in  no  sense 
mandatory  upon  any  of  the  affiliated  organizations.  State  or  local. 
The  fact  that  the  State  and  local  associations  are  taking  up  and  in- 
dorsing the  resolutions  indicates,  I  think,  pretty  conclusively  that 
the  farmers  generally  have  a  pretty  clear  mind  as  to  where  they 
stand  on  this  question. 

Here  is  a  copy  of  Agricultural  Grange  News,  the  official  organ 
of  the  Washington  State  Grange.  On  the  first  page  of  this  paper, 
issue  of  February  1,  1916,  there  are  three  articles:  " Nation-o^yned 
ships  against  preparedness,"  by  the  State  master,  Mr.  C.  B.  Kegley; 
"  Government-owned  ships  and  farmers'  rights,"  an  appeal  to  the 
farmers  of  the  State  to  support  the  farmers'  position  in  this  matter, 
also  signed  by  the  State  master;  and  another  article  urging  them  to 
take  the  matter  up  and  discuss  it  in  their  organizations  and  to  bring 
their  influence  to  bear  upon  their  Congressmen.  The  appeal  of  the 
State  master  to  the  farmers  of  Washington  I  would  like  to  have 
placed  in  the  record  as  indicating  the  general  character  of  the  appeals 
that  are  being  made  by  the  big  farm  leaders  of  the  Nation  to  farmers 
to  support  legislation  looking  to  Government  owned  and  operated 
ships. 

Mr.  Hadley.  You  are  referring  to  Mr.  C.  B.  Kegley  as  a  big  farm 
leader  ? 

Mr.  Hampton.  That  is  my  own  personal  opinion.  I  consider  Mr. 
Kegley,  w^ho  has  been  for  10  years  master  of  the  Washington  State 
Grange  and  who  has  built  that  organization  up  from  a  small  organi- 
zation of  less  than  2,000  members  to  the  greatest  and  most  influential 
farm  organization  west  of  the  Mississippi  River,  one  of  the  biggest 
men,  without  any  question,  in  the  farmers'  organizations.  He  is  one 
of  the  pacemakers,  one  of  the  leaders  of  thought  in  the  farm  world. 

Mr.  Hadley.  What  I  was  getting  at  is  whether  he  was  a  leader  of 
thought  of  the  leading  farmers  or  a  leading  farmer.* 


674     SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MEECHANT  MARINE. 

Mr.  HLampton.  He  is  both.  Mr.  Kegley  this  last  year,  I  think — I 
am  not  certain ;  but  I  knew  exactly  what  it  was  a  year  ago — raised 
between  3,000  and  4,000  bushels  of  wheat  on  his  farm.  He  is  a  big 
farmer  and  a  constructive  farmer  as  well  as  a  constructive  farm 
organization  leader. 

Mr.  RoDENBERG.  Where  did  you  say  he  lives  ? 

Mr.  Hampton.  Palouse,  Wash.  He  is  master  of  the  Washington 
State  Grange. 

The  Chairman.  Are  you  acquainted  with  him,  Mr.  Hadley  ? 

Mr.  Hadley.  Yes ;  I  know  of  him  casually.  I  have  known  of  him 
for  a  great  many  years. 

The  Chairman.  I  do  not  mean  to  reflect  upon  Mr.  Kegley  in  any 
way;  I  was  just  seeking  to  bring  out  a  little  more  fully  his  status 
'  with  reference  to  that  organization. 

(The  portions  of  the  articles  referred  to  are  as  follows:) 

NATION-OWNED  SHIPS  \'ERSUS  PKEPAKEDNESS. 
[By  State  Master  C.  B.  Kegley.] 

It  would  now  require  400  merchant  vessels,  with  a  total  of  1,175,00C  gross 
tonnage,  as  auxiliary  carriers  for  our  Navy.  Only  recently  there  was  a  great 
agitation  in  Congress  for  a  merchant  marine.  Of  course,  this  was  backed  up  by 
the  subsidy  gang,  who  are  always  present  when  the  question  of  a  merchant 
marine  is  under  discussion.  Senator  Gallinger,  in  speaking  on  this  question, 
said  :  "  If  we  only  had  adequate  steamship  lines  between  the  United  States  and 
South  America  there  would  be  a  big  boom  in  American  trade  which  would 
astonish  not  only  our  own  people  but  the  world." 

Senator  Weeks  said :  "  We  are  in  the  position  of  having  spent  $400,000,000  in 
building  a  canal,  one  of  the  reasons  for  doing  so  being  that  it  would  aid  in  the 
extension  of  our  foreign  trade,  but,  so  far  as  I  know,  there  are  no  American 
steamers  prepared  to  undertake  this  service." 

If  we  needed  ships  so  badly  before  the  European  war  broke  out,  and  Senators 
Weeks,  Gallinger,  and  our  own  Congressman  W.  E.  Humphrey  were  so  eager 
for  an  American  shipping  marine,  why  is  it  that  now,  when  there  is  proposed 
to  be  built  a  Government-owned  shipping  marine,  taking  away  from  private 
capital  the  monopoly  of  the  ocean  transportation,  these  fellows  that  had  such 
an  unbounded  love  for  the  American  farmer  and  shipper  we  find  as  silent  as 
the  tomb  or  making  such  strenuous  opposition  to  Government-owned  shipping 
marine?  The  farmers  of  this  Nation  have  lost  enough  on  the  1915  crop  in 
excessive  freight  rates  charged  by  ocean-going  vessels  to  have  built  an  aux- 
iliary merchant  marine  with  more  than  twice  the  carrying  capacity  required  as 
auxiliary  cruisers. 

*  *  ***** 

One  more  illustration  which  comes  directly  home :  The  last  days  of  the  month 
of  December  there  was  shipped  from  our  warehouses  in  the  Palouse  country, 
consigned  directly  to  Liverpool  via  Portland,  Me.,  several  carloads  of  wheat. 
This  sold  in  Liverpool  for  $2.18  per  bushel,  and  the  Palouse  farmer  received  as 
his  portion  SO  to  83  cents  per  bushel,  when  he  should  have  received  $1.40. 
This  is  our  contribution  to  the  foreign  war  tax,  largely  due  to  the  fact  that  we 
have  no  merchant  marine. 

"  AVhat  is  the  real  fight  in  this  merchant  marine  controversy?  It  is  a  fight 
for  subsidies.  What  are  subsidies?  They  are  gifts  from  the  United  States 
Treasury  to  favor  corporations,  firms,  and  individuals  who  operate  ships.  Why 
should  we  give  away  millions  of  dollars  of  the  people's  money  each  year  to 
favor  ship  owners  over  whose  rates  and  services  we  have  no  control  ?  Wouldn't 
it  be  more  sensible  for  the  Government  to  spend  these  millions  in  building  up 
a  splendid  naval  auxiliary  merchant  marine  which  can  be  controlled  and  op- 
erated in  the  interest  of  all  the  people?  " 

*  *  *  «  *  *  * 

If  you,  my  brothev  farmer,  believe  with  me,  then  take  a  cue  from  the  special- 
interest  fellow.     He  is  always  on  the  job  and  does  not  hesitate  to  writ  to  his 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      675 

Congressmen.  If  you  have  a  Congi*essraan  in  Washington,  D.  C,  write  to  him 
and  tell  him  that  you  expect  him  to  vote  and  worli  for  a  Government-owned 
shipping  merchant  marine. 

Do  it  now.     If  you  do  not  look  out  for  your  own  interest  who  do  you  think 
will  do  so?     It  is  up  to  you. 

C.  B.  Kegley. 


write  yofr  congressman. 

January  3,  1916. 

L'ennsylvania  State  (Grange  takes  a  strong 'stand  for  Government-owned  ships, 
Federal  marketing,  and  denatured  alcohol. 

*  *  ***** 

The  Washington  State  Grange  is  on  record  on  these  important  measures, 
and  we  guarantee  the  patrons  of  Pennsylvania  that  they  will  have  to  be  up 
early  and  late  to  set  a  pace  that  our  imtrons  can  not  follow. 

V^'e  respectfully  call  attention  to  pages  123-125  (official  proceedings  of  the 
grange)  on  Government-owned  ships.  This  is  a  live  issue  with  us  here  in  the 
Northwest,  where  charters  on  ships  have  more  than  doubled  within  the  last 
three  months  and  where  the  freight  rates  on  a  bushel  of  grain  from  our  ports 
are  more  than  the  farniei-  realizes  for  his  grain  delivered  to  the  railroad  station. 
The  farmers  of  this  Nation  will  lose  enough  on  the  1915  crop  to  build  a  good 
merchant  marine. 

Write  your  Congressman  and  Senators  to-day,  urging  "  Government  ships 
and  farmers'  rights." 

G0\'ERNirENT  SHIPS  AND  FARMERS'  RIGHTS. 

Patious: 

The  fight  as  to  whether  we  should  have  a  monopoly-owned  merchant  marine 
or  ships  owned  and  operated  by  the  Government  for  the  benefit  of  all  the  people 
is  on  in  earnest.  At  the  last  session  of  the  State  Grange  resolutions  were 
adopted  demanding  Government-owned  and  operated  ships ;  that  our  Repre- 
sentatives in  Congress  be  notified  of  this  action  and  urged  to  work  for  these 
reforms ;  and  your  worthy  master  and  executive  committee  were  instructed  to 
use  all  honorable  means  to  make  the  purpose  of  these  resolutions  effective. 
(See  pp.  123  and  125  of  journal.) 

Now,  therefore,  ])ursuant  to  these  instructions,  and  in  view  of  the  immediate 
urgency  of  the  situation,  I  m-ge  all  patrons,  through  their  granges  and  indi- 
vidually, to  write  a^l  petition  their  Congressnipn  and  Senators  and  let  tliem 
know  in  no  uncertain  terms  that  the  farmers  of  Washingt()n  want  Government- 
owned  and  opei-ated  ships  and  are  unalterably  opposed  to  ship  subsidies  in  any 
form. 

C.  B.  Kegley,  State  Master. 

]Mr.  Hampton  (proceeding).  I  haA^e  also  some  articles  by  Mr. 
Creasy,  of  Pennsylvania,  known  as  Farmer  Creasy  all  over  the 
United  States  and  at  the  present  time  secretary  of  the  National  Dairy 
Association.  Here  is  an  article  by  him  on  the  leading  page  of  the 
Pennsylvania  Grange  Ncavs.  the  leading  farm  paper  of  the  State  of 
Pennsylvania,  with  -lO.OOO  circulation.  The  article  is  entitled  "  How 
the  price  of  a  bushel  of  wheat  is  fixed." 

The  Chairman.  Do  yon  want  that  to  go  in  the  record? 

Mr.  Hampton.  No  :  I  do  not  ask  that,  but  I  would  like  a  quotation 
from  that  speech  to  go  into  the  record,  showing  that  the  conclusions 
of  Mr.  Creasy  are  identical  with  those  of  Mr.  Kegley. 

The  Chairman.  We  have  some  statesmen  who  say  that  the  cost  of 
transportation  does  not  affect  the  price  of  wheat  to  the  farmer,  and 
for  that  reason  it  might  be  pertinent  to  have  his  view  in  the  record. 

Mr.  Hampton.  I  have  marked  with  blue  pencil  the  parts  which 
might  be  pertinent  to  this  hearing,  and  would  like  to  have  them  in 
the  record. 


676     SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE, 

(The  portions  of  the  articles  referred  to  are  as  follows:) 

HOW   THE   PRICE   OF   A  BUSHEL   OF    WHEAT   IS   FIXED. 

{Address  of  Past  Master  William  T.  Creasy  at  the  Bradford  County  Pomona  Grange,  Feb. 

17,  1916.] 

The  aiswer  to  the  question  of  how  the  price  of  a  bushel  of  wheat  is  fixed  is 
more  complex  than  one  would  think  by  giving  it  simply  an  off-hand  answer. 
Many  of  our  city  cousins  believe  that  the  prices  of  the  farmer's  products  are 
fixed  by  the  farmer  himself,  and  that  since  the  cost  of  living  has  gone  up  the 
whole  thing  is  to  blame  on  a  farmers'  trust ;  in  fact,  I  have  heard  this  repeated 
by  people  who  otherwise  are  pretty  intelligent.  But  saying  so  and  so  does  not 
make  a  thing  so  and  so. 

Supply  and  demand  are  the  two  great  regulators  of  the  price  of  agricultural 
staples.  In  taking  wheat  as  an  example,  I  remember  many  years  ago,  after  our 
wheat  crop  was  harvested  and  ready  to  sell,  we  were  confronted  with  the  news 
that  there  were  large  crops  in  the  Balkan  States,  or  India,  or  somewhere  else, 
and  therefore  the  price  would  go  lower,  and  as  the  farmer  knew  nothing  about 
the  crop  in  any  of  these  countries,  he  was  at  the  mercy  of  the  speculator.  This 
was  changed  when  Mr.  David  Lubin  some  years  ago  founded  the  International 
Institute  of  Agriculture  at  Rome,  Italy.  By  treaty  54  of  the  leading  nations  of 
the  world  have  representatives  at  this  institute.  When  at  harvest  time  a  cry  is 
started  that  the  crops  in  foreign  countries  are  exceptionally  heavy  and  therefore 
the  farmers'  prices  very  low  in  this  country,  our  Government  in  24  hours'  time 
or  less  can  find  out  through  its  representative  at  this  International  Institute  of 
Agriculture  the  real  condition  of  crops  in  the  dilferent  countries  of  the  world, 
and  the  information  is  given  to  the  farmer,  so  that  he  can  act  on  his  own  initia- 
tive whether  to  sell  or  hold. 

If  the  crop  conditions  of  the  world  are  normal,  the  price  Avill  be  normal ;  if 
the  crop  conditions  are  above  normal,  the  price  will  be  below  normal.  Should 
the  crop  conditions  of  the  world  be  below  normal,  the  price  will  be  above  normal. 
Statistics  show  the  amount  of  wheat  consumed  by  the  different  nations,  so 
that  the  demand  can  very  readily  be  determined  and  in  this  way  the  conclusions 

arrived  at  as  indicated. 

******* 

The  greatest  wheat  market  is  Liverpool,  England,  because  the  English  people 
do  not  produce  near  as  much  wheat  as  they  consume.  So  that  the  price  paid  for 
wheat  in  the  Liverpool  market  is  the  price  that  I  get  for  my  wheat,  minus  the 
freight  rates  to  the  port,  and  the  ocean  freight  rates  mu-^t  be  deducted  from 

the  Liverpool  price. 

*  *  ***** 

Anyone  can  find  the  rate  which  will  be  charged  from  his  place  to  the  seaport 
en  whatever  he  has  to  ship,  but  when  he  comes  to  find  out  cost  of  ocean  trans 
portation  he  is  liable  to  be  charged  whatever  price  the  i^hipping  monopoly  fixes, 
because  these  rates  can  be  changed  without  notice  to  anyone  two  or  three  times 

a  day. 

*  *  ***** 

Because  the  ocean  freight  rates  on  wheat  are  not  fixed  it  gives  the  specu- 
lators a  chance  to  buy  wheat  cheap,  because  freight  rates  may  be  up  at  the  time, 
and  then  force  or  manipulate  a  drop  in  ocean  freight  rates  and  pocket  the 
difference. 

There  was  a  time  when  tramp  steamers  would  keep  ocean  freight  rates  on 
bulk  products  at  the  lowest  possible  point ;  but  the  Shipping  Trust  have  ships 
which  they  call  fighting  vessels,  which  will  underbid  the  tramp  ships  and  put 
them  out  of  commission,  so  that  the  tramp  ship  to-day  is  about  the  same  boat 
with  the  manufacturer  of  agricultural  implements  who  would  cut  the  price  on 
the  trust-made  goods — he  is  soon  out  of  business.    This,  of  course,  has  only  been 

made  possible  by  the  Shipping  Trust. 

*  «  ***** 

There  is  at  present  a  bill  in  Congress,  known  as  the  merchant-marine  bill, 
which  authorizes  the  Government  to  buy  some  merchant  vessels,  to  be  used  in 
case  of  war  as  supply  ships  for  the  Navy  and  in  time  of  peace  to  transport 
American  products  to  foreign  ports.  The  advantage  of  this  measure  to  the 
farmer  is  that  it  will  be  managed  by  a  board  who  will  fix  the  rates  on  these 
vessels,  which  will  certainly  stabilize  freight  rates  on  other  vessels  not  owned 


SHTP¥T¥rG  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      677 

by  the  Government.  It  is  also  possible  for  the  farmers  of  a  given  section  to 
bill  their  wheat  direct  from  the  elevators  to  Liverpool.  Since  the  freight 
rates  are  known,  the  farmer  will  know  what  he  is  getting  for  his  wheat.  While 
this  bill  does  not  reach  as  far  as  it  ought  to,  yet  it  will  be  of  great  advantage 
to  the  farmers.  In  the  last  session  of  Congress  it  was  defeated  by  the  votes  of 
the  Senators,  which  left  the  American  people  helpless  victims  to  the  rapacity 
of  foreign  shipping  combines.  This  bill  will  be  of  equal  advantage  to  the  mauu- 
lacturer,  and  every  farmer  that  knows  his  business  will  instruct  his  Congress- 
man and  Senators  to  stand  by  the  measure. 

The  time  has  come  to  regulate  ocean  freight  rates,  just  as  much  so  as  railroad 
freight  rates,  and  the  merchant-marine  bill  now  in  Congress  is  a  step  in  that 
direction.  And  when  the  ocean  freight  rates  are  fixed  it  will  be  more  easy  to 
determine  the  price  of  a  bushel  of  wheat,  and  the  factors  that  enter  into  how 
the  price  of  a  bushel  of  wheat  is  fixed  will  be  known,  and  not  guessed  at  as  it 
now  is,  and  every  guess  that  is  made  on  the  farmer's  product  means  a  loss  to 
the  farmer. 

Should  the  merchant-marine  bill  pass  it  will  put  in  operation  some  of  our 
vessels  now  lying  idle.  Ten  colliers  that  were  used  during  the  Spanish-Amer- 
ican War,  that  have  a  capacity  of  10,000  tons,  could  carry  a  cargo  to  Europe 
and  one  back  every  month,  thus  making  24  trips  in  a  year,  and  paying  for  them- 
selves in  six  months,  are  locked  to  our  wharves  because  of  our  antiquated  ship- 
ping laws.  Is  it  not  about  time  that  we  waken  up?  By  being  certain  how  the 
price  of  a  bushel  of  wheat  is  fixed  we  can  solve  the  shipping  monopoly. 

Mr.  Hampton  (proceeding).  Now,  take  the  State  of  Maine.  I 
have  here  two  articles  on  this  question  by  Mr.  R.  L.  Cummings, 
chairman  of  the  service  committee  of  the  Maine  Grange.  Mr.  Cum- 
mings is  a  big  farmer  of  the  State  of  Maine  and  his  official  position 
in  the  grange  has  made  it  necessary  for  him  to  make  a  study  of  the 
transportation  questions  and  shipping  in  relation  to  the  export  trade. 
His  conclusions  are  unanswerable  and  are  in  line  with  the  other  evi- 
dence I  have  presented.  I  believe  that  these  articles  by  Mr.  Cum- 
mings are  worthy  of  the  thoughtful  study  of  the  members  of  this 
committee  and  the  Members  of  Congress  generally.  Anyone  who 
thinks  that  the  farmers  are  not  earnestly  studying  this  question  from 
the  broad  standpoint  of  public  welfare  and  soimd  economics  does  not 
understand  the  farmers'  position. 

Mr.  Greene.  Do  you  wish  to  put  that  into  the  record? 

Mr.  Hampton.  I  can  furnish  you  copies  of  the  Farmers'  Open 
Forum  containing  the  articles. 

Mr.  Greene.  I  only  wanted  to  know. 

Mr.  Hampton.  I  do  not  ask  to  have  them  put  into  the  record. 

Mr.  Lazaro.  Mr.  Chairman,  I  Avould  like  to  have  them  in  the 
record. 

The  Chairman.  You  can  indicate  what  portions  you  would  like  to 
have  go  into  the  record. 

Mr.  Hampton.  I  thought  probably  that  they  were  too  long  for  the 
record  and  so  I  did  not  ask  to  have  them  put  in,  although  I  consider 
the  statements  in  those  two  articles  of  Mr.  Cummings  most  concise. 

The  Chairman.  There  is  no  objection,  if  you  care  to  have  them  put 
into  the  record. 

(The  articles  above  referred  to  are  as  follows:) 

A  LiAE-WiRE  Farmers'  Problem. 

[By  R.  L.  Cummings,  chairman  service  committee,  Maine  Grange.] 

Editor  Farmers'  Open  Forum  : 

In  touching  upon  the  subject  of  a  Government  owned  and  operated  merchant 
marine  as  one  of  the  foremost  problems  you  have  touched  a  live  wire  with 
every  farmer  that  knows  his  business  East,  West,  North,  or  South. 


678      SHIPPIiSTG  BOARD,  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE. 

I  am  a  farmer,  and  my  special  line  is  growing  apples.  I  have  been  engaged 
in  growing  and  marketing  apples  for  25  years. 

Why  do  we  need  a  Government-owned  merchant  marine?  Here  are  the 
facts : 

In  1910  I  became  aware  that  the  cost  of  marketing  apples  was  rapidly  in- 
creasing, especially  in  the  rates  of  transportation  across  the  water.  The  rates 
for  carrying  apples  were  from  three  to  seven  times  as  high  as  those  for  other 
commodities. 

February  10,  1910,  the  rate  per  ton  on  farm  products  averaged  $2.68.  Sep- 
tember 1,  1912,  it  had  advanced  to  $6.66  per  ton. 

Rate  February  10,  1910,  per  100  pounds :  Apples,  34.3  cents ;  flour,  7  cents ; 
hay,  11  cents ;  wheat,  5  cents ;  cotton,  10  cents. 

Rate  September  1,  1912,  per  100  pounds :  Apples,  42  cents ;  flour,  20  cents ; 
hay,  38  cents ;  wheat,  28  cents ;  cotton,  4.5  cents. 

in  1914  the  rates  had  advanced  to  $14  per  ton.  At  the  present  time  the  rates 
are  about  $25  to  $35  per  ton. 

Cotton  is  carried  for  $1.50  to  $1.75  per  100  pounds;  wheat,  63  cents  per  100 
pounds. 

The  1st  of  Ocotber  apples  were  carried  for  $1.25  per  barrel.  For  a  short 
time  they  sold  high  in  Liverpool,  and  they  put  the  rate  up  to  $2  per  barrel ; 
then  the  market  collapsed  and  the  rate  came  down  to  $1.25. 

THE  REAL  KEASON. 

Presumably  this  is  all  on  account  of  the  war,  but  as  the  shipper  is  I'equired 
to  pay  a  heavy  war  insurance  in  addition  to  the  high  rate  or  assume  the  risk 
himself,  and  if  the  market  is  high  they  put  up  the  rate  and  take  the  benefit 
to  themselves,  we  wonder  if  there  is  not  a  real  reason  for  these  things  and  the 
war  the  excuse. 

What  was  the  profit  on  this  carrying  trade  previous  to  1912?  If  you  turn  to 
page  639  of  the  hearings  before  the  Committee  on  the  Merchant  Marine  and 
Fisheries,  they  paid  from  8  per  cent  and  9  per  cent  to  25  per  cent  in  1912. 
Since  1910  the  rates  have  been  multiplied  by  twelve. 

Europe  places  a  maximum  price  at  which  food  products  may  be  sold.  We 
allow  the  carrier  to  charge  what  he  sees  fit,  and  the  producer  here  takes  what 
Is  left.    We  may  well  pause  a  moment  to  consider  this  situation. 

Across  the  water  are  l)leeding  millions  struggling  to  maintain  the  liberty  of 
the  world.  Upon  this  side  of  the  water  are  the  forces  that  produce  the  neces- 
saries of  life  that  they  must  have ;  between  us  stands  this  colossal  organization 
that  we  have  allowed  to  grow  up  without  restraint,  that  claims  the  right  to 
take  advantage  of  their  necessity  and  our  lack  of  means  of  transportation  to 
■collect  all  the  traflic  will  bear. 

CONTEMPT   FOR  THE   PEOPLE. 

They  show  their  contempt  for  the  people  and  their  belief  in  our  blindness 
and  ignorance  when  under  these  circumstances  they  ask  for  a  subsidy  to  further 
increase  their  profits,  and  caution  us  to  beware  of  a  Government-owned  mer- 
chant marine,  and  denounce  it  as  a  step  to  State  socialism.  They  show  us  the 
great  increase  in  American  shipping  and  the  great  amount  in  process  of 
construction. 

By  referring  to  page  591  of  the  above-quoted  record  you  will  find  that  in 
3912  there  was  1,500,000  to  2,000,000  tons  of  American-owned  ships  under  for- 
eign flags.  The  largest  block  of  this  was  controlled  by  J.  P.  Morgan  &  Co., 
who  organized  the  international  Mercantile  Marine,  a  holding  company  con- 
trolling the  Leylaud  Line,  Dominion  Line,  White  Star  Line,  Red  Star  Line, 
American  and  Atlantic  Transport  Lines.  They  propose  further  to  tax  us  that 
this  infant  industry  may  be  nursed  upon  a  subsidy,  when  the  evidence  indi- 
cates they  now  receive  over  300  per  cent  annually. 

These  gentlemen  want  more  money,  and  think  it  no  disgrace  to  call  upon 
Congress  for  help. 

The  Bureau  of  Statistics  reports  that  the  average  farmer  of  this  country 
has  an  income  of  $537.50  per  year,  aside  from  hired  help,  fertilizer,  and  main- 
tenance of  implements,  and  is  mortgaged  for  $1,750  at  6  per  cent;  but  he  has 
some  conscience  and  self-respect,  and  won't  even  call  on  the  town  until  he 
has  to. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      679 

One  of  the  worthy  objects  of  your  paper  is  to  provide  means  by  wliich  he 
may  finance  that  mortgage  at  a  lower  rate  of  interest.  Let  me  suggest  that  if 
he  can  get  justice  he  will  finance  it  himself. 

You  may  be  sure  that  if  any  of  the  gentlemen  that  want  to  go  to  Congress 
from  ]Maine  oppo.se  the  Government-owned  merchant  marine  they  will  hear 
from  home. 

West  Paris,  Me. 


Where  the  Farmers'  Profits  Go. 

AND    WHERE   THEY    WILL   CONTINUE   TO   GO   UNLESS    THE   FARMERS    MAKE   THEIR 
INFLUENCE   FELT   IN    CONGRESS   TO    STOP   THE    ROBBERY. 

[By  R.  L.  Cummings,  chairman  service  committee,  Maine  Grange.] 

Editor  Farmers'  Open  Forl^m  : 

Supplementing  my  article  on  that  great  but  simple  question,  the  merchant 
marine,  in  the  Feliruary  Farmers'  Open  Forum,  I  here  submit  some  further 
facts  showing  the  increase  in  cose  of  carrying  our  foreign  commerce  since  1910. 
As  a  basis  for  these  calculations  I  am  taking  the  rates  across  the  north  At- 
lantic, as,  that  being  where  the  greatest  volume  and  density  of  traffic  is,  it  will 
best  represent  the  whole.  As  great  as  these  figure  are  they  are  below  the 
actual  fact  for  one  reason.  In  1915  our  commerce,  lioth  outbound  and  inbound, 
far  exceeded  that  of  previous  years,  and  no  unoccupied  space  is  allowed  upon 
the  outgoing  ships,  whereas  in  previous  years  it  has  been  as  high  as  one-fourth 
of  the  capacity  of  the  ship. 


Year. 


1910 
1912 
1914 
1915 


Nolnme  of  commerce. 


52  374-614  ton^ 

.56,436,373  tons 

Income  on  sam^e  volume  i>s  1912.. . 
Income  on  s  me  voliimie  as  1912  ^t 


Average 

rate  per 

ton. 


Total 

freit^ht 

revenue. 


f  2.  72       S140, 877, 711 

6.  72         369, 2.56, 146 

14.00         790,109,222 

31.50  i  1,777,746,749 


What  dividends  did  this  business  pay  nt  the  former  rates  in  1010  :'nd  1012? 

Special  Diplomatic  and  Consular  Report,  page  39,  says,  thnt  in  lOOS  the  White 
Star  Line  paid  10  per  cent,  in  1000  it  paid  20  per  cent.  In  lOld  the  details  of 
the  year's  business  were  as  follows  (this  White  Star  is  one  of  the  Morgan- 
owned  lines  of  the  I.  M.  M.)  : 

"The  best  asset  of  the  trust  has  been  the  White  Star  Line,  which  in  1910 
earned  a  net  profit  of  $2,620,880  on  a  capital  of  $3,630.(100,  after  writing  off 
$1,701,770.92  for  depreciation.  A  dividend  of  30  per  cent  was  paid  in  that  year 
by  this  company  alone  and  a  balance  carried  forward  or  placed  to  various  re- 
serves, among  which  was  an  insurance  fund  for  which  $487,000  was  set  aside 
in  view  of  the  increase  of  the  fleet.'" 

This  line  was  charging  the  same  for  service  as  others  in  the  s^une  ti-ade. 

Turning  to  page  41  of  Senate  Document  No.  601.  Sixty-third  Congress,  second 
session,  you  will  find  the  following:  "The  Holland  Amerika.  Line  earnel  altout 
50  per  cent  net  upon  its  capital  during  the  first  fiscal  year  1013.'"  (This  line 
had  also  become  one  of  the  Morgan  possessions.) 

The  Hamburg- American  Line  earned  about  30  per  cent  net  during  its  fl.scal 
year  of  1913.  F.  E.  Dixon  &  Co.,  of  London,  who  owned  and  oiier,-  ted  a  large 
fleet  of  "tramp"  freighters  showed  earnings  of  about  50  per  cent.  (Tramp 
ships  are  those  that  have  no  regular  routes,  but  are  sent  wherever  ordered.) 

These  are  only  a  few  specific  instances  of  steamship  line  earnings.  They  are 
not  at  all  unusual,  but  are  the  regular  thing  in  the  shipping  business. 

Here,  then,  are  the  facts:  In  1910  and  1912  these  lines  were  paying  30  per 
cent  to  50  per  cent.  The  average  cost  of  carrying  our  commerce  for  those  years 
was  less  than  $6.72  for  in  1910  the  cost  of  carrying  farm  products  (Feb.  10) 
from  I'ortland  and  Boston,  was  $2.69.  These  rates  were  gradually  increased 
until  September  1,  1912,  they  went  to  $6.72.  To  be  again  conservative,  let  us 
make  our  calculations  from  the  point  most  favorable  to  them.  To-day  the  rates 
upon  cotton,  wheat,  apples,  and  meat  averages  $31.50  per  ton  of  2,000  pounds. 


680      SHIPPING  BOARD,  XAVAL  AUXILIAEY,  AND  MERCHANT  MARINE. 

To-day  to  carry  the  56.437,614  tons  they  carried  in  1912  for  $369,256,146, 
thereby  "earning  a  net  dividend  of  30  per  cent  to  50  per  cent,  they  now  receive 
$1,777,746,749.  This  enormous  amount  would  give  them  a  dividend  of  30  per 
cent  to  50  per  cent  and  a  surplus  for  a  single  year  of  the  enormous  amount  of 
$1,408,490,603.    Perhaps  we  can  comprehend  how  much  that  is  by  comparison. 

The  entire  disbursements  of  the  United  States  Government  during 
the  year  1912,  including  the  Army,  Navy,  and  pork  barrel 
^y-is  '_ $656.  623.  597 

The  total  value  of  the  State  of  Maine.  1910.  census 451.  780. 119 

Let  us  build  State  roads  enough  to  go  around  the  world,  24,000 
miles  at  $5,000  per  mile 120,000.000 

We  will  build  100  first-class  ships  at  $1,000,000  each,  to  carry 
our  commerce 100,  000.  000 

Provide  a  working  capital  of 50.  000.  000 

1,378,  403.  716 

We  find  we  would  still  have  a  balance  of  $30,086,887. 

Did  your  Senators  and  Representatives  go  into  hysterics  a  year  ago  at  the 
idea  of  our  Government  raising  $30,000,000  to  go  into  this  business  to  relieve 
us  from  these  conditions  the  same  as  they  organized  the  parcel  post  to  relieve  us 
from  the  express  monopoly? 

Does  it  not  look  as  if  this  country  of  ours  was  fast  being  preempted  as  a  park 
and  grazing  ground  for  those  interests  while  our  Representatives  at  Washing- 
ton act  as  police  to  keep  the  people  off  the  gi-ass? 

This  is  but  one  of  the  many  devices  of  this  system  for  gathering  the  wealth 
produced  by  the  people  of  this  country  into  the  treasury  of  this  group  of  multi- 
millionaires. 

These  same  gentlemen  manipulate  our  railroads  with  a  similar  result  to  them- 
selves at  the  expense  of  the  stockholder  and  the  public;  here,  however,  we  have 
exercised  a  partial  control,  but  on  the  water  they  have  had  a  free-for-all.  go-as- 
you-please — competition  reversed,  each  competing  to  get  the  last  possible  penny 
out  of  the  public. 

Our  ships,  I'ailroads,  trolleys,  Standard  Oil  and  other  oil  companies,  American 
Woolen  Co.,  United  States  Steel,  coal  mines,  grain,  and  tobacco  companies  are 
interwoven  and  controlled  by  men  who  can  operate  them  as  by  one  mind,  either 
with  or  without  visible  legal  connection  of  combination. 

I  wish  to  call  the  special  attention  of  our  friends  who  are  laboring  earnestly 
for  the  worthy  object  of  rural  credits  to  these  facts.  These  interests  now  hold 
the  power,  and  exercise  it,  to  fix  the  price  of  whatever  we  have  to  sell  and  what- 
ever we  have  to  buy.  Our  flr.st  object  .siiouUl  be  to  remedy  this.  We  can  not 
fill  the  bag  by  stopping  the  leak  on  the  side  while  the  bottom  is  all  open.  Here 
is  an  illustration  that  can  be  verified : 

A  farmer  in  the  East  produces  2,000  barrels  of  apples ;  his  cost  of  freight 

has  increased  $1.25  per  barrel,  a  total  freight  increase  of $2.  5(X) 

The  farmer  in  the  AVest,  10,000  bushels  of  wheat ;  his  cost  of  freight  has 

increased  33  cents  per  bushel,  a  total  of 3.  300 

The  planter  in  the  South  raises  50  tons  of  cotton;  his  freight  has  in- 
creased $33  per  ton,  a  total  of 1.  650 

Total  cost  from  increased  freight  rates 7.  450 

Let  us  suppose  that  each  of  these  is  mortgaged  for  $5,000  at  6  per  ceut__        300 
Reduced  by  rural  credits  to  3  per  cent 150 

Total  savings  for  each ^ 150 

Total  for  all  three 450 

IncTease  in  ocean  freight — a  present  loss 7,  450 

Savings  from  rural  credits — yet  to  be  won 450 


7.000 


Suppose  the  annual  interest  rate  on  the  mortgage  is  12  per  cent,  making  the 
annual  interest  charge  $600.  Suppose  this  is  reduced  to  3  per  cent  by  rural 
credits.  The  saving  for  each  would  be  only  $450,  or  a  total  of  $1,350.  whereas 
the  total  loss  from  increased  freights  being  $7,450,  the  net  loss  would  be  $6,100. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  M4RINF..      681 

And,  mind,  the  increase  in  freight  rates  represents  a  present  loss  to  farmers, 
whereas  the  gain  through  rural-credits  legislation  is  yet  to  be  won,  and  at  best 
it  will  be  some  time  before  its  full  effect  can  be  felt. 

TAXATION    BY    THE    INVISIBLE    GOVERNMENT. 

This  is  taxation  for  private  interests  levied  by  the  invisible  government. 
Morgan  and  his  associates  were  obtaining  control  so  much  of  the  English 
merchant  marine  that  the  Government  interfered  and  prevented  him  from 
taking  over  the  Cunard  Line,  the  Government  furnishing  the  Gunard  Co.  the 
funds  to  build  the  Liiisitania  and  Mauritana  at  a  rate  of  2f  per  cent  and  a 
special  subsidy  of  $730,000.  Germany  frowned  upon  our  exercising  our  right 
to  control  our  own  commerce  because  her  great  and  growing  merchant  marine 
was  reaping  huge  profits  out  of  us  until  the  outbreak  of  the  rs^ar. 

Our  American  financiers  could  not  be  content  with  their  little  corporation 
interest  at  home,  like  the  Steel  Trust,  with  its  $1,440,000  capitalization,  the  oil 
companies,  railroads,  etc.,  they  must  attack  us  from  without  as  well  as  from 
within  and  here  is  a  little  sketch  of  how  they  did  it.  (P.  38,  Special  Diplomatic 
and  Counsular  Report.) 

"  On  February  14,  1902,  an  agreement  was  concluded  by  the  American  syndf- 
cate  and  the  White  Star  Line  for  the  purchase  of  its  shares.  Each  holder  of  a 
share  of  1,000  pounds  sterling  ($4,860)  in  the  Oceanic  Steam  Navigation  Co. 
received  4,196  pounds  ($20,390)  in  cash  and  6,000  pounds  ($29,100)  in  preferred 
and  common  of  the  trust.  The  managers  of  the  line,  Messrs.  Ismay,  Inu-ie  i^  Co., 
received  10  times  their  profits  for  the  year  1900,  and  undertook  for  14  years 
not  to  associate  themselves  w'ith  any  other  shipping  enterprise  trading  to  ports 
which  the  White  Star  had  used." 

They  did  these  things  because  they  could  make  the  people  pay.  We  have 
paid  now  for  14  years  and  in  order  to  make  us  keep  it  up  they  see  they  must 
run  our  Government. 

Can  they  do  it? 

Put  the  Farjuers'  Open  Forum  into  the  home  of  every  farmer  and  let  him 
have  the  chance  to  find  out  the  facts;  then  look  out  for  the  scythe  and  the 
reaper. 

Remember  "  The  mills  of  the  Gods  grind  slowly,  but  they  grind  exceeding 
small." 

West  Paris,  Me. 

Mr.  Hampton.  Here  is  a  copy  of  the  current  issue  of  Successful 
Farming,  one  of  the  largest  and  most  representative  papers  in  the 
Central  West,  having  a  paid  circulation  of  more  than  700,000  copies. 

The  Chairman.  Where  is  it  published? 

Mr.  Hampton.  It  is  published  at  Des  Moines,  Iowa,  right  in  the 
middle  of  the  agricultural  belt  of  this  country;  and  I  want  to  call 
your  attention  to  a  leading  editorial  on  ocean  freight  rates  which,  I 
think,  should  go  in  the  record.  I  want  to  call  your  attention  espe- 
cially to  the  concluding  paragraph;  it  is  very  short.     It  reads: 

We  don't  w'ant  a  ship  subsidy ;  never.  We  are  already  giving  the  shipping 
interests  more  than  enough.  We  want  Government  competition  by  Government 
controlled  or  owned  merchant  vessels,  or  speedily  an  international  commerce 
commission  to  regulate  ocean  freight  rates. 

(The  editorial  referred  to  follows:) 

OCEAN  freight  BATES. 

The  producer  pays  the  freight,  whether  he  be  manufacturer  or  farmer.  In 
normal  times  the  exporter  into  any  country  must  lay  down  his  goods  at  a 
price  not  exceeding  the  prevailing  price  for  the  same  class  of  goods  made  at 
home.  He  must  compete  with  the  home  product  that  does  not  have  to  pay  any 
ocean  freight.  Hence  the  foreign-made  goods  must  sell  at  the  price  of  home- 
made goods,  less  the  freight. 

For  this  reason  the  exporter  pays  for  the  products  he  exports  only  enough  to 
allow  him  to  pay  the  ocean  freight  and  insurance  to  the  foreign  country  and 
make  a  profit,    in  other  words,  the  producer  pays  the  freight  and  insurance  to 


682      SHIPPING  BOAED^  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

the  foreign  markets  because  the  buyer,  the  exporter,  will  not.  He  is  like  the 
banker  charging  usury  who  takes  the  interest  out  in  advance. 

Since  the  war  has  made  more  hazardous  ocean  shipping,  insurance  rates  have 
gone  up  and  the  risk  has  increased  until  ocean  freight  rates  have  jumped  to 
unreasonable  demands.  There  is  no  established  rate.  The  freighters  charge 
just  what  they  please  because  they  can.  Some  of  the  belligerent  countries 
have  fixed  the  maximum  price  of  goods,  and  this  allows  the  ocean  freighters 
to  charge  up  to  the  limit.  The  American  producers  are  paying  these  outrageous 
freights.  Before  the  war  it  cost  4  cents  a  bushel  to  get  wheat  to  Liverpool ; 
now  it  is  40  cents.     Everything  in  proportion. 

We  don't  want  a  ship  subsidy ;  never.  We  are  already  giving  the  shipping 
Interests  more  than  enough.  We  want  Government  competition  by  Government 
controlled  or  owned  merchant  vessels,  or  speedily  an  international  conmierce 
commission  to  regulate  ocean  freight  rates. 

Mr.  Hampton  (proceeding).  Just  briefly  in  regard  to  the  position 
of  the  organized  farmers  of  the  United  States  on  ship  subsidies.  For 
more  than  10  years  they  have  taken  the  most  determined  stand 
against  any  ship-subsidy  legislation  by  the  United  States  Congress. 
They  have  carried  their  opposition  to  the  point  of  sending  their  rep- 
resentatives into  every  agricultural  district  of  the  United  States  to 
arouse  the  farmers  to  fight  it.  In  the  Congress  in  the  year  1907 — I 
forget  the  number  of  that  Congress — when  Gen.  Grosvenor,  of  Ohio, 
was  in  charge  of  the  ship-subsidy  bill 

Mr.  Hardy.  The  Fifty-ninth  Congress. 

Mr.  HA^rpTON.  The  Fifty-ninth  Congress — it  was  fought  right  to 
the  very  closing  daj's  of  Congress,  and  the  organized  forces  behind 
the  ship-subsidy  proposition  mot  the  farmers  in  a  convention  that 
was  held  in  the  Xew  WiHard  Hotel  in  this  city  in  January  of  that 
year  and  were  absolutely  annihilated.  I  took  part  in  that  meeting, 
and  Mr.  Aaron  Jones,  past  master  of  the  National  Grange,  was  the 
chief  spokesman  and  led  the  fight,  supported  by  State  Master  F.  A. 
Derthick,  of  Ohio.  The  Grange  representatives  thoroughly  con- 
vinced that  convention  that  the  farmers  Avould  fight  ship  subsidv  in 
any  form  to  the  limit.  And,  Mr.  Chairman,  the  farmers  are  abso- 
lutely opposed  to  and  will  fight  ship-subsidy  legislation  every  time 
it  comes  up.  I  can  give  a  complete  record  of  the  farmers'  fight 
against  ship  subsidies  to  any  member  of  this  committee  or  of  Con- 
gress. We  have  in  condensed  form  the  history  of  that  entire  fight, 
but  it  is  too  long  for  the  record  here. 

Now,  in  regard  to  the  matter  which  the  chairman  mentioned.  At 
the  meeting  the  other  day  when  representatives  of  the  Grange  were 
testifying  some  members  of  this  committee  questioned  their  state- 
ments that  the  world's  price  fixed  the  domestic  price  of  the  staples 
of  agriculture.  It  was  astounding  to  me  that  any  Member  of  Con- 
gress should  challenge  the  correctness  of  these  statements.  In  the 
last  Congress,  the  Sixty-third  Congress,  a  joint  resolution  (H.  J.  311) 
was  introduced  by  Mr.  Alexander,  the  chairman  of  this  committee, 
and  referred  to  the  Committee  on  Foreign  Commerce,  I  think 

The  Chairman.  The  Committee  on  Foreign  Affairs. 

Mr.  Hampton.  The  Committee  on  Foreign  Affairs,  which  took 
that  resolution  under  consideration  and  had  hearings. 

The  Chairman.  If  there  is  no  objection,  I  would  like  to  have  that 
resolution  go  into  the  record  at  this  point. 

Mr.  Hampton.  I  myself,  Mr.  Chairman,  was  going  to  ask  at  the 
conclusion  of  my  statement  that  the  official  report  should  be  included. 


SHIPPING  BOAHD,  NAVAL  AUXILIARY.  AND  MEECHANT  MAEINE.     QS'd^ 

(The  resolution  and  official  report  referred  to  are  as  follows:) 

Steadying  the  World's  Pkice  of  the  Staples. 

[H.  J.  Res.  311,  63d  Cong.,  2d.  Sess.] 

In  the  House  of  Representatives.  July  31,  1914.  Mr.  Alexander  introduced 
the  following  joint  resolution ;  which  was  referred  to  the  Committee  on  Foreign 
Affairs  and  ordered  to  be  printed. 

JOINT  RESOLUTION  Instructing  American  delegate  to  tiie  International  Institute  of  Agri- 
culture to  present  to  the  permanent  committee  for  action  at  the  general  assembly  in  1915 
certain  resolutions. 

Resolved  by  the  Senate  and  House  of  Representatives  of  the  United  States  of 
American  in  Congress  assembled,  That  in  accordance  with  the  authority  of 
letter  (f)  of  article  nine  of  the  treaty  establishing  the  institute,  which  provides 
that  it  shall  "  submit  to  the  approval  of  the  Governments,  if  there  be  need, 
measures  for  the  protection  of  the  conmion  interests  of  farmers,"  the  American 
delegate  to  the  International  Institute  of  Agriculture  is  hereby  instructed  to 
present  (during  the  1914  fall  sessions)  to  the  permanent  committee  the  fol- 
lowing re.<^olutions,  to  the  end  that  they  may  be  submitted  for  action  at  the 
general  assembly  in  1915,  so  as  to  permit  the  proposed  conference  to  be  held  in 
Rome  during  the  fortnight  preceding  the  session  of  the  general  assembly  of 
the^institute  in  1917 : 

"  resolutions. 

"  The  general  assembly  instructs  the  International  Institute  of  Agriculture  to 
invite  the  adhering  Governments  to  participate  in  an  international  conference 
on  the  subject  of  steadying  the  world's  price  of  the  staples. 

"  This  conference  shall  consist  of  members  appointed  by  each  of  the  Gov- 
ernments adhering  to  the  institute,  and  is  to  consider  the  advisability  of 
formulating  a  convention  for  the  establishment  of  a  permanent  International 
Commerce  Commission  on  Merchant  Marine  and  on  Ocean  Freight  Rates  with 
consultative,  deliberative,  and  advisory  powers. 

"  Said  conference  to  be  held  in  Rome  during  the  fortnight  preceding  the  ses- 
sion of  the  general  assembly  of  the  institute  in  1917  " 

Mr.  Goodwin  of  Arkansas,  from  the  Connnittee  on  Foreign  Affairs,  submitted 
the  following  report  (to  accompany  H.  J.  Res.  311)  : 

The  Connnittee  on  Foreign  Affairs,  to  which  was  refei-red  the  resolution 
(H.  J.  Res.  311)  instructing  the  American  delegate  to  the  International  Insti- 
tute of  Agriculture  to  present  to  the  permanent  committee  for  action  at  the 
general  assembly  of  the  institute  in  191.5  certain  resolutions,  reports  the  same 
back  to  the  House  with  the  recommendation  that  it  do  pass. 

The  International  Institute  of  Agriculture,  having  its  seat  at  Rome,  Italy,  is 
a  permanent  Government  institution  created  by  treaties  signed  June  7,  1905, 
between  the  United  States  and  the  following  powers:  Italy,  Montenegro,  Rus- 
sia, Argentine  Republic,  Roumania,  Servla,  Belgium,  Salvador,  Portugal,  Mex- 
ico, Luxemburg,  Switzerland,  Persia,  Japan,  Ecuador,  Bulgaria,  Denmark, 
Spain,  France,  Sweden,  The  Netherlands,  Greece,  Uruguay.  Germany,  Cuba, 
Austria-Hungary,  Norway,  Egypt,  Great  Britain,  Guatemala,  Ethiopia,  Nica- 
)-agua,  Brazil,  Costa  Rica,  Chile,  Peru,  China.  Parguay,  and  Turkey.  Since  the 
creation  of  the  institute  14  other  powers  have  become  adherents,  making  the 
total  number  at  this  time  54  nations  represented  in  the  institution. 

Confining  its  operations  within  an  international  sphere,  the  institute  is  ■ 
authorized  and  directed,  among  other  things,  to  submit  to  the  approval  of  the 
Governments,  if  there  be  need,  measures  for  the  protection  of  the  common  inter- 
ests of  farmers,  and  it  is  under  the  subsection  designated  "  f,"  article  9,  of  the 
treaty  referred  to  that  it  is  proposed  to  instruct  the  American  delegate  to  offer 
a  resolution  inviting  the  adhering  Governments  to  participate  in  an  interna- 
tional conference  on  the  subject  of  steadying  the  world's  price  of  the  staple 
agricultural  products. 

If  the  invitation  thus  extended  is  accepted,  a  conference  consisting  of  dele- 
gates or  members  named  by  each  of  the  adhering  Governments  will  meet  in 
Rome  to  consider  the  advisability  of  formulating  a  convention  for  the  establish- 


684      bHIPPING  BOARD,  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

nient  of  a  permanent  international  commerce  commission  on  merchant  marine 
and  ocean  freight  rates,  with  consultative,  deliberative,  and  advisory  powers. 

The  committee  held  hearings  on  the  resolution,  the  testimony  taken  developing 
the  following  facts : 

That  of  the  entire  ocean  freight  traffic,  seven-ninths  consist  of  bulk  traffic, 
the  greater  proportion  of  which  is  the  staples  of  agriculture. 

That  two-ninths  of  the  total  ocean  freight  traffic  consist  of  package  traffic, 
including  practically  all  manufactured  articles. 

That  while  the  freight  rate  on  package  traffic  can  not  be  changed  by  the 
carriers  without  giving  30  to  60  days'  notice  to  shippers,  the  rate  on  bulk 
traffic  may  be,  and  in  fact  is,  changed  without  notice  and  fluctuates  hourly. 

That  the  domestic  price  of  the  staples  of  agriculture  is  governed  by  the  ex- 
port price,  which  fluctuates  with  the  rise  and  fall  of  ocean  freight  rates  on  bulk 
traffic. 

That  the  world's  price  of  the  staples  of  agriculture  can  not  be  steadied  until 
a  fixed  rate  can  be  established  on  bulk  traffic  the  same  as  package  traffic. 

Independent  of  the  abnormal  conditions  whicL  now  obtain,  the  ocean  freight 
rates  have  increased  within  the  past  two  years  fi'om  100  to  200  per  cent  and 
are  controlled  absolutely  by  a  shipping  trust  which  arl)itrarily  fixes  the  charge 
for  carrying  the  staple  commodities,  and  the  burden  of  increased  rates  has 
Ijeen  borne  largely  by  the  bulk  traflie.  The  broad,  international  scope  of  the 
question  is  patent,  and  it  is  one  of  primary  importance  to  every  agricultural 
nation  in  the  world. 

The  conunittee  heard  ]Mr.  David  Lubin.  American  delegate  to  the  interfta- 
tional  institute,  whose  testimony  indicates  that  favorable  action  will  be  taken 
by  the  adhering  Governments  on  the  resolution  thus  initiated  by  the  United 
States. 

Mr.  Hampton  (continuing).  That  resolution  was  reported  back  to 
the  House  and,  after  debate,  carried  practically  unanimously,  and  in 
a  few  days  carried  through  the  Senate  and  was  signed  by  the 
President.  That  resolution  was  absolutely  a  piece  of  waste  paper 
and  a  joke  on  the  farmer,  unless  the  hearings  and  debate  had  con- 
clusively demonstrated  to  Congress  and  the  President  that.the  world's 
price  does  fix  the  domestic  price.  If  it  is  not  true.  House  joint  reso- 
lution 311  Ijad  no  justification.  But  it  is  true;  and  you  will  find 
b}^  looking  over  the  record  of  the  debate  in  the  House  on  that 
resolution  that  the  keynote  of  all  speeches,  of  Republicans  and 
Democrats  alike,  was  that  the  farmer  had  a  vital  concern  in  orean 
freight  rates,  because  the  domestic  price  of  the  staples  of  agriculture 
was  the  world  price  less  the  cost  of  transportation  and  middlemen's 
charges. 

I  submit,  Mr.  Chairman,  some  excerpts  from  the  speeches  in  that 
debate. 

(Excerpts  from  the  debate  in  Congress  on  H.  J.  Res.  311 :) 

Julius  Kahn  (California).  Now,  the  question  of  ocean  carriage  has  much 
to  do  with  fixing  the  price  of  many  of  these  staples  that  the  whole  world 
consumes.  At  the  present  time  the  ocean-carrying  freight  varies  on  the  staples 
of  agriculture  practically  from  day  to  day.  The  manufactured  commodities 
have  steady  and  fixed  rates ;  the  various  steamship  companies  have  agi'ee- 
ments  under  the  terms  of  which  they  will  not  change  these  latter  rates  except 
upon  30  or  60  days'  notice.  No  such  agreement  holds  with  regard  to  corn 
or  wool  or  cotton  or  the  foodstufCs  which  the  world  requires.  The  consequence 
is  that  the  producer  of  these  commodities  is  constantly  at  the  mercy  of  the 
ocean  carriers,  so  far  as  the  price  he  gets  for  his  commodity  is  concerned, 
because  in  most  instances  the  price  of  his  commodity  is  fixed  not  in  the 
United  States  but  in  some  foreign  country.  And  therefore  the  farmer's 
price  in  the  United  States  is  the  foreign  price  less  the  cost  of  carriage  to 
the  foreign  port  where  the  world  price  is  made. 

Mr.  Cooper  (Wisconsin).  IMr.  Speaker,  I  am  obliged  to  the  gentleman  from 
Illinois  [Mr.  Mann].  As  a  member  of  the  Committee  on  Foreign  Affairs  I 
heard   the   testimony   given   by   Mr.   David   Lubin,    and   by   other   thoroughly 


SKIPPING  BOARD,  NAVAL  AUXILIAEY,  AND  MERCHANT' MARINE.      685 

informed  witnesses,  as  to  the  merits  of  this  resolution,  and  I  am  convinced 
tliat  it  ought  to  pass. 

Tlie  facts  are  very  simple.  Seven-ninths  of  the  entire  ocean  traffic  is  what 
is  called  bulk  traffic,  and  practically  all  of  this  comes  from  the  farms  of 
the  country.  When  farm  products  are  carried  on  land  the  farmers  know 
precisely  what  the  freight  rate  is,  and  the  railroads  can  not  change  that  freight 
rate  without  first  giving  notice  of  30  or  60  days.  Even  then  they  can  not 
change  it  without  the  consent  of  the  interstate  commerce  commission,  which 
before  reaching  a  decision  takes  into  account  the  interests  of  the  railroads 
and  the  interests  of  the  shippers.  But,  in  the  case  of  ocean  freight  rates  on 
grain,  as  was  shown  by  the  testimony,  they  may  vary  in  an  hour  from  1 
cent  to  25  cents  a  bushel. 

This  resolution  simply  provides  as  its  ultimate  purpose  that  the  International 
Institute  of  Agriculture  shall  call  an  international  conference  to  consider 
the  subject  of  steadying  the  world's  price  of  the  staples  of  agriculture  and 
the  advisability  of  establishing  an  international  commerce  commission  on 
merchant  marine  with  advisory  and  consultative  powers  concerning  the  rates  to 
be  paid  on  ocean  traffic.  It  is  a  resolution  of  great  importance,  and  I  hope 
that  it  will  pass  without  a  dissenting  vote.     [Applause.] 

Mr.  Greene.  What  has  been  the  elfect  of  the  resohition  which  you 
sa}'  passed  both  branches?    AVhat  has  become  of  it? 

Mr,  Hampton.  The  resolution  is  now  on  the  calendar,  if  that  is 
the  proper  term,  of  the  International  Institute  of  Agriculture  for 
the  hrst  thing  to  be  acted  upon  by  that  institute  as  soon  as  the  war 
is  over.  The  war  has  interrupted  the  activities  of  the  International 
Institute  of  Agriculture  to  that  degree 

Mr.  Hardy.  Ha\e  you  tlie  expression  of  the  delegates  from  France, 
Great  Britain,  and  Italy  with  reference  to  this  resolution  after  it  was 
suggested  by  Mr.  Lubin? 

^Ir.  Hampton.  In  the  debate  on  the  floor  or  of  the  delegates? 

Mr.  Hardy.  In  Rome  when  he  proposed  it. 

^Ir.  Hampton.  T  have  a  co])y  of  the  official  report  sent  out  by  Mr. 
Lubin  covering  that  right  here  [indicating],  and  therein  is  a  state- 
ment of  the  formal  presentation  of  the  resolution  to  the  institute  by 
Mr.  Lubin  and  the  comments  of  the  different  delegates. 

Mr.  Hardy.  I  would  like  to  have  that  go  in  the  record,  because  it 
is  very  interesting.    It  shows  their  attitude. 

Mr.  RoDENBERG.  I  think  it  ought  to  go  in. 

(The  remarks  above  referred  to  are  as  follows:) 

Steadying  the  World's  Price  of  the  Staples. 

resolutions  by  the  congress  of  the  united  states  presented  to  the 
international  institute  of  agriculture. 

[February  27,  1915.] 

The  President.  I  wish  to  remind  the  Permanent  Committee  that  the  resolu- 
.-ion  passed  by  the  United  States  Congress,  which  Mr.  Lubin,  the  American  dele- 
gate, will  now  present,  was  already  communicated  to  the  committee  last  October. 
As  the  delegate  was  then  in  the  United  States  it  was  decided  to  defer  action 
until  his  I'eturn.     I  now  give  him  the  floor. 

Mr.  LiTBiN  (delegate  of  the  United  States).  In  accordance  with  instructions 
from  the  Government  of  the  United  States,  I  herewith  present  to  the  Permanent 
Committee  the  following  resolutions  of  Congress: 

"  JOINT  RESOLUTION  Instructing  the  American  delegate  to  the  International  Institute 
of  Agriculture  to  present  to  the  Permanent  Committee  for  action  at  the  general  assembly 
in  1915  certain  resolutions. 

"  Resolved  by  the  Senate  and  House  of  Representatives  of  the  United  States  of 
America  in  Congress  assembled,  That  in  accordance  with  the  authority  of  letter 
(/)  of  article  nine  of  the  treaty  establishing  the  institute  which  provides  that  it 

32910—16 44 


686      SHIPPING  BOAED,  NAVAL  AUXTLIAKY,  AND  MERCHANT  MARINE. 

*  shall  submit  to  the  approval  of  the  Governments,  if  there  be  need,  measures  for 
the  proection  of  the  common  interests  of  farmers,'  the  American  delegate  to  the 
International  Institute  of  Agriculture  is  hereby  instructed  to  present  (during 
the  1914  fall  sessions)  to  the  Permanent  Committee  the  following  resolutions  to 
the  end  that  they  may  be  submitted  for  action  at  the  general  assembly  in  1915.  so 
as  to  permit  the  proposed  conference  to  be  held  in  Rome  during  the  fortnight 
preceding  the  session  of  the  general  assembly  of  the  institute  in  1917 : 

"  '  Resolutions.— The  general  assembly  instructs  the  International  Institute  of 
Agriculture  to  invite  the  adhering  Governments  to  participate  in  an  interna- 
tional conference  on  the  subject  of  steadying  the  world's  price  of  the  staples. 

"  '  This  conference  shall  consist  of  members  appointed  by  each  of  the  Govern- 
ments adhering  to  the  institute  and  is  to  consider  the  advisability  of  formulating 
a  convention  for  the  establishment  of  a  permanent  international  commerce  com- 
mission on  merchant  marine  and  on  ocean  freight  rates  with  consultative,  de- 
liberative, and  advisory  powers. 

"  '  Said  conference  to  be  held  in  Rome  during  the  fortnight  preceding  the  ses- 
sion of  the  general  assembly  of  the  institute  in  1917.'  " 

I  now  move  that  the  proposal  contained  in  the  above  resolutions  be  placed  on 
the  program  of  the  next  general  assembly. 

The  President.  Gentlemen,  you  have  heard  the  motion.  What  is  your 
pleasure? 

Mr.  Dop  (delegate  of  France).  In  the  first  place  I  wish  to  express  our  thanks 
to  the  delegate  of  the  United  States,  and  through  him  to  the  Government  of  his 
country.  By  placing  before  the  Institute  so  important  a  question  as  that  of 
ocean  freight  rates,  the  United  States  is  taking  a  direct  and  effective  step 
toward  the  solution  of  a  problem  which  is  of  the  greatest  economic  and  po- 
litical importance  to  the  whole  world.  Ocean  freight  rates  have  become  the 
pivot  on  which  turns  the  whole  problem  of  the  cost  of  cereals.  It  is  therefore 
both  the  duty  and  the  interest  of  the  International  Institute  of  Agriculture  to 
accept  with  the  greatest  favor  the  proposal  laid  before  it.  Consequently,  I  feel 
justified  in  stating  that  my  Government  will  be  quite  willing  to  accept  the  pro- 
posal made  by  the  Government  of  the  United  States. 

Mr.  DE  MiKLOs  (delegate  of  Hungary).  I  wish  here  to  declare  that  my  govern- 
ment has  authorized  nie  to  give  its  adherance  to  the  proposal  made  by  tlie  Gov- 
ernment of  the  United  States  that  the  next  general  assembly  should  deal  with 
the  question  of  ocean  freight  rates. 

Mr.  Zabiello  (delegate  of  Russia).  I  wish  to  congratulate  Mr.  Lubin  on  the 
great  success  he  has  had  and  on  the  valuable  work  he  has  performed  in  his 
country  by  getting  the  Government  of  the  United  States  to  ask  that  the  question 
of  ocean  freight  rates  be  placed  on  the  program  of  the  general  assembly.  The 
proposal  is  one  of  the  greatest  importance,  more  especially  for  my  country, 
which,  in  the  matter  of  ocean  fi-eight  rates,  is  almost  entirely  dependent  on 
other  countries.  I  can  only  express  my  entire  support  of  the  proposal  that  the 
question  be  made  part  of  the  program  of  the  next  general  assembly. 

Dr.  MuLLER  (delegate  of  Germany).  I  wish  to  associate  myself  i.v  the  con- 
gratulations which  have  been  addressed  to  Mr.  Lubin  for  his  initiative.  I  have 
not  been  instructed  to  make  a  special  declaration  on  the  motion  before  us.  but 
I  can  state  that  my  government  takes  a  great  interest  in  this  question.  If  the 
proposal  is  o  be  brought  before  the  general  assembly  or  a  special  conference  it  is 
necessary  that  a  preliminra-y  study  be  made.  Consequently,  I  would  ask  that 
the  secretary  general  be  instructed  to  take  up  this  subject. 

Mr.  DE  Pozzi  (delegate  of  Austria).  In  the  firi5t  place  I  wish  to  declare  myself 
heartily  in  favor  of  the  motion  presented  by  Mr.  Lubin.  I  make  a  motion  that 
a  reporter  be  at  once  named  to  study  the  question  along  with  the  proper  bureau 
of  the  institute. 

Sir  .Tames  Wilson  (delegate  of  Great  Britain).  I  wish  to  give  my  entire 
support  to  the  motion  presented  by  Mr.  Lubin  that  the  resolutions  of  Congress 
be  placed  before  the  next  general  assembly.  I  agree,  however,  with  the  presi- 
dent that  next  October  will  be  the  proper  time  for  deciding  whether  the  bureau 
should  be  ordered  to  draw  up  a  report  on  the  subject  dealt  with  in  the  resolu- 
tions passed  by  the  Congress  of  the  United  States  which  call  for  a  special  con- 
ference to  be  held. 

Mr.  Aldunate  (delegate  of  Chile).  As  the  representative  of  a  country  which 
does  not  possess  a  merchant  marine,  I  deem  it  proper  for  me  to  say  a  few 
words.  The  whole  of  Latin  America  has  at  present  to  submit  to  the  freight 
rates  formed  in  the  great  countries  which  possess  powerful  merchant  marines. 
It  is  therefore  of  the  utmost  importance  for  our  countries,  for  their  economic 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      687 

and  commercial  prosperity,  that  a  neutral  ground  be  found,  such  as  is  afforded 
by  this  institute,  in  which  it  is  possible  for  us  not  only  to  get  in  touch  with 
those  countries  which  determine  freight  rates,  but  where  we  may  find  some 
protection  for  our  interests  which  are  at  stake.  I  deem  it  proper  to  make  this 
statement  so  that  the  merchant-marine  countries  may  take  into  due  considera- 
tion the  situation  of  those  nations  which  are  subject  to  them  for  ocean  carriage. 
These  nations  are  of  great  importance  to  the  mecrliant-marine  countries,  as  it 
is  they  who  supply  tlie  goods  to  be  carried,  and  as  they  also  largely  supply 
Eluroiie  with  her  foodstuffs  and  with  the  raw  material  for  her  factories.  Con- 
sequently, although  I  have  not  received  direct  instructions  on  this  head,  I  am 
interpreting  faithfully  the  economic  policy  to  which  my  Government  constantly 
adheres  when  I  give  my  full  support  to  the  proposal  which  has  been  brought 
before  the  Permanent  Committee  by  the  Congress  of  the  United  States. 

Mr.  Pineiro  Sokondo  (delegate  of  Argentina).  First  of  all,  I  wish  to  con- 
gi'atulate  Mr.  Lubin  on  the  fact  that,  thanks  to  his  efforts,  this  important  ques- 
tion has  been  brought  before  us  by  the  Congress  of  the  United  States.  It  is  a 
question  of  exceptional  importance  for  the  Argentine,  which  has  not  got  a 
merchant  marine,  and  which  now  finds  itself  compelled  to  pay  enormous  freight 
rates  in  order  to  export  its  products,  freight  rates  which  amount  in  certain 
cases  to  fully  half  the  value  of  the  product. 

Mr.  KoviRA  (delegate  of  Uruguay).  I  entirely  agree  with  the  remarks  which 
have  just  been  made  by  the  delegate  of  Argentina,  and  which  hold  good  for  the 
country  which  I  represent.  The  resoultion  passed  by  Congress  has  my  hearty 
support. 

The  Presidext.  I  put  to  the  vote  the  motion  submitted  by  IMr.  Lubin.  that 
the  proposal  relative  to  ocean-freight  rates,  contained  in  the  resolution  passed 
by  the  Congress  of  the  United  States,  be  made  part  of  the  program  of  the  next 
general  assembly  of  the  institute. 

(The  motion  was  carried  unanimously.) 

Mr.  Hampton  (proceeding).  Now,  Mr.  Chairman  and  gentlemen 
of  the  committee,  the  merchants'  associations,  so  far  as  I  have  been 
able  to  review  their  activities,  have  taken  a  stand  for  ship  subsidies. 
It  is  diametrically  opposed  to  that  taken  by  the  organized  farmers. 
The}'  take  a  stand  in  favor  of  a  monopoly  of  the  coastwise  trade. 
The  farmers  take  an  unalterable  stand  in  opposition  to  that.  Conse- 
quently on  the  general  plan  for  legislation  to  build  up  our  merchant 
marine  they  are  as  far  apart  as  the  poles. 

Mr.  Greene.  What  did  you  mean  in  regard  to  the  coastwise  trade? 
The}'  want  it  open  to  all  the  world? 

Mr.  Hampton.  I  want  it  open. 

Mr.  Greene.  You  want  it  open;  but  what  is  the  position  of  the 
farmers? 

Mr.  Hamiton.  The  general  position  of  the  farmers  is  that  they 
want  American  ships,  regardless  of  where  they  are  built,  to  have  all 
the  privileges  of  American  commerce ;  that  there  shall  be  no  restric- 
tions, and  that  the  building  up  of  our  American  merchant  marine 
shall  not  be  handicapped  and  harassed  by  being  made  simply  a  cat's- 
paw  to  pull  the  chestnuts  out  of  the  fire  for  the  building  up  of  an 
industry  that  is  of  necessity  an  auxiliary  industry.  In  other  words, 
they  want  the  horse  before  the  cart  instead  of  the  cart  before  the 
horse. 

Mr.  Kodenbeeg.  That  phase  of  the  question  has  been  discussed  by 
the  grange  and  they  have  taken  an  official  position  on  it? 

Mr.  Ha:mpton.  It  has  been  discussed  by  the  grange  again  and 
again  during  the  last  10  years,  since  they  have  been  discussing  a 
merchant  marine. 

Mr.  Loud.  I  could  not  understand  that  statement.  I  would  like  to 
have  you  answer  that  question. 


688      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Greene.  1  asked  you  whether  the  farmers'  organizations  are 
in  favor  of  opening  the  coastwise  trade  to  all  the  vessels  of  all  the 
world,  of  whatever  nationality  or  whatever  flag. 

Mr.  Hampton.  No;  they  are  not  favorable  to  foreign  ships:  that 
is,  ships  sailing  under  f oreigTi  flags  entering  into  the  coastwise  trade ; 
but  they  are  in  favor  of  any  ship,  no  matter  where  it  is  built,  that 
comes  under  the  American  flag  having  all  the  privileges  of  American 
commerce,  coastwise  and  otherwise.  Is  that  a  clear  answer  to  the 
question. 

Mr.  Greene.  No.  Are  they  in  favor  of  restricting  that  to  Ameri- 
can oiHcered  ships  and  American  manned  ships,  or  are  they  willing 
that  foreigners  should  command  the  ships  or  foreigners  should  sail 
the  ships  in  the  coastwise  trade? 

Mr.  Hampton,  The  farmers  are  absolutely  in  favor  of  the  freedom 
of  the  seas,  so  far  as^the  sailors  are  concerned,  and  stand  unquali- 
fiedly for  the  seamen's  bill  which  passed  Congress  a  short  time  ago. 

Mr.  Greene.  That  is  not  the  question  I  asked— about  the  seaman's 
bill.  I  asked  v  hether  they  are  in  favor  of  employing  foreign  officers 
and  foreign  seamen  on  vessels  admitted  to  the  coastwise  trade  in 
any  form  whatsoever,  or  whether  they  are  in  favor  of  having  for- 
eign officers  on  those  ships  and  foreign  crews. 

Mr.  Hampton.  I  would  not  say  that  they  had  gone  into  a  close 
discussion  of  that  particular  question. 

Mr.  Greene.  That  is  a  very  important  phase  of  the  question,  and 
I  would  like  to  know.  That  is  a  very  important  phase  of  the  ques- 
tion as  to  whether  or  not  they  are  going  to  have  the  coastwise  trade 
thrown  open  to  all  the  world  to  any  vessel  that  happens  to  have  the 
American  flag  at  its  masthead,  no  matter  where  it  came  from.  And 
then  for  the  vessel  to  be  officered  and  manned  by  a  foreign  crew. 
Are  they  in  favor  of  those  vessels,  officered  and  manned  by  foreign 
crews,  being  admitted  to  the  coastAvise  trade  of  the  United  States? 

Mr.  Hampton.  If  the  navigation  laws 

Mr.  Greene.  It  has  nothing  to  do  with  the  navigation  laws.  I 
asked  you  that  plain  question,  if  the  farmers  had  decided  that  in 
any  formal  action? 

Mr.  Hampton.  Yes  and  no.  Now,  can  I  explain  the  "  3'es,"  and  car. 
I  explain  the  "  no  "  ? 

Mr.  Greene.  Yes;  explain  the  "yes." 

The  Chairman.  Mr.  Greene,  let  me  clear  up  the  situation  a  little 
bit.  Under  the  existing  law,  none  of  the  crew  on  vessels  in  the  coast- 
wise trade,  under  the  American  flag,  except  the  watch  officers,  are 
required  to  be  American  citizens.  As  a  matter  of  fact,  of  the  crews  on 
all  vessels  in  the  coastwise  trade,  at  least  75  per  cent  of  them  are  not 
American  citizens,  aside  from  the  watch  officers.  Now.  as  to  the 
farmers'  organizations,  as  Mr.  Greene  suggested,  have  they  consid- 
ered whether  or  not  the  offi.cers  on  American  ships  should  be  for- 
eigners? I  do  not  believe  the  other  question  is  pertinent,  because  we 
have  no  law  requiring  them  to  be  American  citizens.  Have  they  con- 
sidered that  question  ? 

Mr.  Hampton.  They  have  considered  it  in  a  broad,  general  way; 
in  this  way,  that  they  are  not  in  favor  of  making  any  discrimination 
in  the  officers  or  men  on  board  of  one  class  of  American  ships  as 
against  ships  in  another  class.     If  you  allow  foreign  officers  or  for- 


1 


SHIPPING  BOARD,  KAVAL  AUXILIARY,  AXD  MERCHANT  MARINE.      689 

eign  seamen  upon  ocean-going  American  ships,  then  yon  should  allow 
those  same  seamen  to  operate  in  the  coastwise  trade.  We  do  not 
make  a  distinction  between  coastwise  trade  and  foreign  trade  so  far 
as  ships  under  the  American  flag  are  concerned. 

Mr.  Greene.  That  is  3^our  individual  opinion,  as  I  understand  it? 

Mr.  Hampton.  No  ;  it  is  not  my  individual  opinion. 

Mr.  Greene.  I  asked  you  for  the  opinion  of  the  farmers. 

Mr.  Hampton.  It  is  the  opinion  of  the  farmers. 

The  Chairman.  Let  me  clear  up  another  situation  right  at  that 
point.  The  only  instance  where  these  ships  under  the  American  flag 
are  permitted  to  have  the  watch  officers  who  are  foreigners  is  under 
the  ship-registry  act  of  August  18,  1914 ;  that  is,  the  passage  of  that 
bill  gave  the  President  the  power  to  suspend  our  navigation  laws 
with  relation  to  foreign-built  ships  brought  under  American  registry. 
That  legislation  was  supported  by  the  United  States  Steel  Corpora- 
tion, the  Standard  Oil  Co.,  the  United  Fruit  Co.,  and  other  companies 
whose  vessels  were  under  foreign  flags  to  avoid  what  they  thought 
an  insuperable  difficulty  when  they  brought  their  vessels  under  the 
American  flag  if  they  were  required  to  have  them  manned  by  Ameri- 
can officers;  that  that  power  was  vested  in  the  President  to  sus- 
pend our  navigation  laws. 

That  is  a  temporary  measure,  as  I  understand,  and  what  you  might 
regard  as  an  emergency  measure;  and  that  legislation  was  pressed  by 
those  interests. 

Mr.  Hampton.  That  is  as  I  understand  it. 

The  Chairman.  Have  your  farmers  considered  that  question? 

Mr.  Hampton.  In  a  broad,  general  way;  yes.  The  farmers  have  no 
desire  to  put  obstructions  in  the  way  of  adjusting  the  old  method  of 
operating  on  the  seas  with  new  and  better  methods.  They  recognize 
there  must  be  some  give  and  take. 

If  3^ou  will  go  back  a  while,  when  the  question  of  the  seamen's  bill 
was  under  discussion  in  the  House,  with  Mr.  Wilson,  who  is  now  Sec- 
retary of  Labor,  in  charge  of  the  bill  (at  least  the  bill  was  known  as 
the  Wilson  bill),  that  bill  was  taken  up  for  general  discussion  by  the 
farmers  because  Mr.  Wilson  is  a  member  of  the  Grange — he  is  a 
farmer  and  a  member  of  the  Grange  of  Pennsylvania — and  it  was  dis- 
cussed as  a  Grange  measure,  and  on  broad  general  principles  they  are 
quite  willing  to  stand  by  what  Senator  La  Follette,  Secretary  Wilson, 
and  Mr.  Andrew  Furuseth,  and  the  other  men  who  have  made  a  close 
study  of  that  law  approve  and  indorse.  That  is  the  position,  I  think, 
you  will  find  the  organized  farmers  of  the  United  States  generally 
take. 

Mr.  Hardy.  Let  me  interrupt  you  with  a  few  questions  along  the 
line  of  American  seamen.  Are  you  aware  to-day  there  is  in  the  coast- 
wise trade  no  law  requiring  seamen  on  the  coastwise  ships  under  the 
American  flag  to  be  American  citizens  ?    Are  you  aware  of  that  fact  ? 

Mr.  Hampton.  I  understand  that  is  the  case. 

Mr.  Hardy.  Then,  are  you  further  aware  of  the  fact  that  the  sea- 
men's law  did  not  change  that  status,  but  did  require  that  75  per  cent 
of  the  seamen  in  all  departments  should  be  able  to  understand  the 
language  of  the  officers;  and  are  you  aware  that  the  shipowners  who 
most  intensely  hug  the  coastwise  monopoly  to  their  breasts  fought 
that  seamen's  act  not  on  the  ground  of  any  requirement  that  they  be 


690      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

American  citizens  but  that  they  understand  the  language  of  the 
officers  ? 

Mr.  Hampton.  Yes. 

Mr.  Hardy.  Can  you  see  any  consistency  in  fighting  the  seamen's 
bill  on  that  ground  and  then  opposing  foreign-built  ships  coming 
into  our  trade  because  they  are  not  manned  by  and  officered  by  Ameri- 
can officers  and  seamen?  In  other  words,  it  seems  to  me  they  just  re- 
Terse  themselves.  When  you  propose  to  let  foreign-built  ships  into 
the  coastwise  trade  under  the  American  flag  under  the  same  conditions 
that  they  go  in  the  foreign  trade  they  object  to  that  proposition  be- 
cause it  does  not  require  American  seamen  on  them.  Does  not  that 
seem  to  you  entirely  inconsistent  ? 

Mr.  Hampton.  I  don't  know  that  I  would  care  to  testify  upon  that 
particular  point.  Mr.  Hardy.  The  question  as  I  see  it  from  the 
farmers'  standpoint 

The  Chairman.  He  was  called  here  to  express  his  opinion  on  this 
bill. 

Mr.  Hampton.  If  I  undertake  to  testify  in  behalf  of  the  prepared- 
ness portion  of  this  legislation  my  petition  might  be  different  in  that 
case.  It  would  be  a  personal  position.  But  the  farmers'  interest  in 
this  question  is  not  because  of  the  importance  of  preparedness,  it  is 
because  of  its  effect  on  the  price  of  the  staples  of  agriculture.  They 
consider  an  unregulated  ocean  merchant  marine  a  menace  to  the 
prosperity  of  the  farmer.  And  to  continue,  when  this  war  ends,  the 
dependence  of  this  country  upon  a  foreign  merchant  marine  they 
consider  a  continuous  menace,  because  of  the  various  things  that  have 
been  brought  out  in  these  hearings,  and  which  you  all  well  under- 
stand. And  they  expect  the  United  States  Congress  to  take  some 
action  that  will  give  them  relief. 

One  the  one  hand,  as  we  see  it,  there  are  the  shipping  interests 
coming  here  and  asking  year  after  year  for  ship  subsidies  and  private 
operation  without  regulation — with  all  the  monopoly  features  of  the 
present  conditions.  On  the  other  hand,  there  are  the  farmers,  with 
an  unalterable  opposition  to  ship  subsidies  and  a  demand  for  Govern- 
ment owned  and  operated  ships,  at  least  to  the  extent  of  a  reasonable 
percentage  of  the  foreign  commerce  of  the  United  States.  Between 
these  two  extremes  is  this  bill  which  this  committee  is  now  consider- 
ing. We  are  willing  to  accept  it  as  a  reasonable  compromise  between 
these  opposing  forces. 

Mr.  Hardy.  As  a  step  forward? 

Mr.  Hampton.  As  a  step  forward,  conditional  that  you  do  not 
have  any  monopoly  of  the  coastwise  trade  in  this  bill,  and  that  you 
strengthen,  as  much  as  you  possibly  can.  the  Government  ownership 
and  operation  features;  and  these  conditions  are  vital,  so  far  as  the 
farmers'  support  is  concerned.  No  one  understands  the  farmers'  side 
of  this  subject  who  does  not  know  how  the  question  of  the  unregu- 
lated freight  rates  of  the  ocean  lead  up  to  the  exchanges  where  the 
wheat  and  the  other  staples  are  bought  and  sold.  On  this  point, 
Mr.  Chairman,  I  submit  excerpts  from  a  statement  formally  pre- 
sented to  Congress  by  Mr.  Lubin,  during  the  consideration  of  House 
Joint  Resolution  311,  printed  in  the  hearings  and  in  the  Congres- 
sional Eecord,  and  reprinted  in  farm  papers  in  all  parts  of  the  coun- 
try.    The  excerpts  I  submit,  and  to  which  I  especially  desire  to  call 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      691 

3^our  attention,  show  the  power  of  the  shipping  combine  to  raise  and 
lower  at  will  the  prices  of  the  staples  of  agriculture.  I  give  them 
as  they  were  published  in  the  Farmers'  Open  Forum : 

Power  of  the  Ship  Combine. 

to  raise  and  lower  the  price  of  the  staples  of  agricttlture. 

[From  the  Farmers'  Open  Forum.] 

The  following  extracts  from  the  report  of  Hon.  David  Lubin,  the  United 
States  delegate  to  the  International  Institute  of  Agriculture,  should  be  studied 
carefully  bj'  every  wide-awake  farmer  if  he  would  understand  the  deadly  danger 
of  producers — not  only  of  America  but  of  the  entire  world — being  "  milked  "  of 
their  profits  as  long  as  ocean  freight  rates  on  the  staples  of  agriculture  are  at 
the  mercy  of  foreign  and  privately  owned  and  unregulated  shipping  combines. 
We  quote: 

As  we  have  seen,  the  chamber  of  commerce  of  New  York  states  that  wheat  is 
carried  at  one  tiiue  free  of  charge  as  ballast,  and  at  another  time  at  a  charge 
of  lOd.  and  12d.  per  bushel ;  and  the  San  Francisco  Chamber  of  Commerce  writes 
that  "  rates  fluctuate  from  day  to  day,  and  a  rate  reported  to-day  might  be  twice 
as  high  or  twice  as  low  to-morrow."  Therefore  the  shipper  must  guess,  and  so 
must  everyone  else  guess,  so  long  as  rates  are  unfixed.  If  the  shipper  wins  on 
the  guess,  what  he  wins  comes  directly  out  of  the  pocket  of  the  producer ;  if  he 
loses,  he  tries  hard  to  recoup  himself  in  his  next  deal,  and  also  out  of  the 
producer's  pocket. 

But  this  is  only  the  beginning  of  the  mischief.  The  confusion  arising  out  of 
the  system  of  unfixed  rates  for  ocean  carriage  of  the  staples  and  the  consequent 
uncertainty  in  price  determining  lead  to  economic  evils  so  far-reaching  as  to 
affect  the  people  everywhere. 

A  comprehensive  grasp  of  the  significance  of  this  evil  may  be  obtained  by  the 
consideration  of  the  following: 

The  staples  of  agriculture  being  sold  on  the  world's  bourses  and  exchanges  at 
the  world's  price,  it  necessarily  follows  that  a  rise  in  ocean  freight  rates  at  one 
or  more  leading  ports  of  an  exporting  country  by  reducing  the  price  on  the 
quantity  exported  must  necessarily  reduce  the  price  on  the  remaining  quantity  in 
the  home  market  for  the  buyer  on  the  bourses  or  exchanges,  whether  he  buys  for 
export  or  for  home  use,  pays  the  same  price. 

We  can  thus  see  how  sensitive  to  change  is  the  world's  price  and  the  home 
price  of  the  staples  when  influenced  by  unfixed  rates  for  ocean  carriage.  Were 
there  fixed  rates  for  the  carriage  of  the  staples,  subject,  say,  to  30  or  60  days' 
notice  of  change,  as  is  the  case  with  the  "  package  traffic,"  it  would  then  settle 
the  major  evil  in  the  question  before  us,  the  evil  of  constant  and  unnecessary 
price  disturbances. 

But,  apart  from  such  disturbances,  under  the  present  system  of  unfixed  rates 
there  is  yet  another  point  which  calls  for  our  consideration. 

Under  present  conditions  the  chief  directors  of  a  few  of  the  larger  shipping 
rings,  by  federating  their  efforts,  are  in  a  position  to  raise  and  lower,  by  previous 
arrangement,  the  prices  of  the  staples  in  any  and  all  of  the  principal  ports  of 
the  world.  Acting  under  exclusive  and  advanced  knowledge  of  the  rates  they 
will  charge,  they  could  low^er  the  price  of  the  staples  by  raising  the  cost  of  car- 
riage, and  then,  directly  or  indirectly,  buy  them  in  the  bourses.  They  could  then 
raise  the  price  of  the  staples  by  lowering  the  cost  of  carriage,  when  they  would 
sell.  They  could  thus  at  will  and  by  arrangement  lower  the  price  of  the  product 
and  buy,  then  raise  the  price  and  sell  and  pocket  the  difference. 

But  the  economic  loss  occasioned  by  such  raising  and  lowering  of  prices  at  will 
would  be  very  much  greater  than  the  amount  the  directors  of  the  shipping  rings 
might  pocket,  for  raising  or  lowering  the  cost  of  carriage  means  raising  or 
lowering  the  price  of  the  staples  on  the  home  market  directly  and  raising  or 
lowering  the  world's  price  indirectly. 

Here  we  see  that  the  price  of  the  annual  world's  production  of  the  staples, 
the  value  of  which  we  may  roughly  estimate  at  a  hundred  billion  dollars  a  year, 
and  which  represents  the  foodstuffs  and  the  raw  material  for  clothing  and  for 
house  furnishing  of  all  the  people  of  the  world,  is  permitted  to  be  battledored  and 
shuttlecocked  through  the  action  of  the  federated  shipping  rings. 


692      SHIPPING  BOARD,  XAVAL  AUXILIARY,  AND  MliKCHAXT  MARINE. 

We  are  thus  forced  to  the  conclusion  that  it  is  possible  under  this  system  for 
a  few  powerful  directors  of  federated  shipping  rings  to  exert  more  effective 
economic  control  over  the  nations  than  can  be  exerted  by  any  President,  Emperor. 
King,  or  Prince ;  and  so  long  as  these  federated  shipping  rings  have  it  in  their 
power  to  dictate  at  will  the  rise  and  fall  in  price  of  the  world's  food  products, 
of  the- world's  raw  materials  for  clothing  and  for  furnishing,  so  long  do  they 
in  reality  usurp  a  power  which  does  not  belong  to  them,  a  power  which  they 
should  not  have. 

Mr.  Hampton  (proceeding).  As  long  as  that  unregulated  condi- 
tion exists  every  farmer  of  the  United  States  who  has  studied  the 
question  knows  he  can  not  stop  the  robber}^  of  the  cream  of  his 
profits.  The  farmers  are  going  to  stop  this  robbery  of  the  cream  of 
their  profits  before  they  get  through ;  but  they  are  simply  asking  the 
United  States  Congress  now  to  give  immediate  relief,  so  far  as  the}^ 
can,  by  the  passage  of  a  reasonable  shipping  bill. 

Mr.  Lazaro.  What  do  you  think  of  the  bill  under  consideration  ? 

Mr.  Hampton.  I  think  it  is  a  fairly  good  bill  as  a  step  in  the  right 
direction.  If  you  leave  the  monopoly  of  the  coastwise  trade  features 
in  it,  it  is  a  bill  that  will  not  commend  itself  very  strongly  to  the 
farmers,  in  my  judgment.  You  have  got  to  eliminate  that  and 
strengthen  the  Government  ownership  and  operation.  I  do  not  mean 
to  say  there  are  not  other  weaknesses  in  the  bill.  But,  broadh%  I 
consider  it  a  piece  of  constructive  legislation  that  will  go  far  in  the 
bui^lding  up  of  an  American  merchant  marine.  It  is.  as  I  view  it, 
the  second  half  of  the  shears  that  will  cut  the  Gordian  knot  that  has 
been  hornswoggling  us  all  of  these  years,  the  first  half  being  the  sea- 
men's bill,  also  passed  by  this  committee.  I  think  with  those  two 
measures  honestly  administered  we  shall  have  paved  the  way  for  the 
restoration  of  American  ships  manned  by  American  seamen  on  every 
sea. 

Mr.  Hardy.  As  I  understand,  in  your  opinion  the  farmers  would 
like  to  see  this  bill  passed,  but  would  like  to  see  it  amended  so  that 
ships  bought  abroad  could  enter  into  the  coastwise  trade  ? 

Mr.  Hampton.  Yes,  sir;  emphatically. 

Mr.  Greene.  Will  you  answer  a  question  for  me? 

Mr.  Hampton.  Yes. 

Mr.  Greene.  In  what  way  has  the  coastwise  trade  injuriously 
affected  the  farmer  in  the  price  of  his  grain  ? 

Mr.  Hampton.  A  ship  comes  to  New  York  from  Liverpool 

Mr.  Greene.  Oh,  no;  I  am  talking  about  the  coastwise  trade. 
You  have  spoken  about  the  injury  of  the  coastwise  trade,  that  the 
coastwise  trade  has  injured  the  farmer.  In  what  way  has  it  affected 
the  farmer? 

Mr.  Hampton.  I  only  know  how  to  answer  a  question  one  way. 
The  way  you  would  like  me  to  say  is  "  Yes  "  or  "  No." 

Mr.  Greene.  No;  go  ahead  and  explain  yourself. 

Mr.  Hampton.  You  want  to  put  me  in  the  position  of  the  man 
who  was  asked  the  question,  "  Have  you  stopped  beating  your  wife  ?  " 
and  I  do  not  want  to  be  put  in  that  position. 

Mr.  Greene.  No;  I  asked  you  in  what  way  the  coastwise  trade  has 
injured  the  farmer. 

Mr.  Hampton.  A  ship  comes  to  New  York  from  some  foreign  port 
and  has  got  to  get  a  return  cargo  of  corn,  cotton,  or  wheat  in  Gal- 
veston. Under  this  restricted  law  forbidding  them  to  enter  the  coast- 
wise trade  they  have  got  to  go  in  ballast  to  Galveston,  and  the  expense 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      693 

of  that  dead  trip  has  got  to  be  charged  up  against  the  ocean  freight 
rates  either  going  or  coming,  or  both.  You  can  see,  therefore,  that 
you  will  compel  them  to  take  a  long  ocean  voyage  at  a  dead  loss, 
and  to  make  up  that  loss  by  heavier  charges  on  the  return  cargo  of 
wheat,  cotton,  etc.,  whereas  if  they  could  pick  up  a  cargo  in  New 
York  for  Galveston  they  could  cross  the  ocean  at  a  cheaper  rate.  In 
the  development  of  an  American  merchant  marine  the  freedom  of 
the  coastwise  trade  is  vital  to  the  farmer.  It  is  not  only  in  carrying 
farm  produce  in  big  ships  to  Europe  and  to  long-distance  ports  that 
free  access  to  the  coastwise  trade  is  necessary,  but  it  is  fully  as 
necessary  to  the  little  ships  butting  in  to  Canadian,  Central  Ameri- 
can, and  West  India  Island  ports,  and  so  forth  and  so  on,  which 
develops  trade  enormously  if  it  is  free.  It  is  this  small-ship  business 
which  makes  feeders  for  the  business  of  the  bigger  ships  the  final 
business. 

Mr.  Greene.  Do  you  Imow  anything  about  the  coastwise  trade  on 
the  Lakes? 

Mr.  Hampton.  Somewhat. 

Mr.  Greene.  What  has  been  the  effect  of  our  coastwise  trade  on 
the  Lakes?  Has  the  price  of  freight  gone  up  on  the  Lakes?  Is  it 
high  or  is  it  low  ?  Is  it  not  a  fact  that  on  the  Lakes  they  have  the 
lowest  freights  of  an}^  place,  anywhere  in  the  world,  and  that  is  con- 
fined wholly  to  the  coastwise  trade?  There  are  not  any  foreign 
steamers  in  the  Lake  trade,  and  the  price  of  freights  on  the  Lakes 
is  lower  than  anywhere  else  in  the  world.  Is  not  wheat,  grain,  and 
everything  else  carried  on  the  Lakes  at  a  lower  price  than  any- 
where else  ? 

Mr.  Hampton.  Granting  it  is  so,  what  has  that  to  do  with  the 
question  ? 

Mr.  Greene.  I  simply  asked  you  the  question  as  to  whether  the 
coastwise  trade  has  injuriously  affected  the  farmers  on  the  Lakes? 

Mr.  Hampton.  Do  you  think  the  freights  on  the  Lakes,  if  I  may 
ask  a  question 

Mr.  Greene.  I  am  not  on  the  stand.  I  asked  you  the  question,  and 
I  want  you  to  answer  the  questions  I  ask  you.    I  am  not  a  witness. 

Mr.  Hampton.  I  am  not  quite  prepared  to  say  that  a  discussion  of 
the  quetsion  of  shipping  on  the  Lakes  is  pertinent  to  the  question 
now  before  this  committee. 

Mr.  Greene.  That  is  coastwise  trade,  and  a  very  important  part 
of  the  merchant  marine  of  this  country. 

Mr.  Hampton.  If  it  was  left  to  me  to  decide,  I  would  certainly 
make  the  traffic  on  the  Lakes  open  to  all. 

The  Chairman.  If  you  will  read  the  decision  of  the  United  States 
district  court  the  other  day,  in  Michigan,  on  a  question  growing  out 
of  the  Eastland  disaster,  where  the  defendants  were  asking  to  be 
discharged  when  application  was  made  to  transfer  the  case  to  the 
jurisdiction  of  the  United  States  court  of  Illinois,  you  will  find  that 
there  is  a  distinction  between  coastwise  trade  and  the  trade  on  the 
Great  Lakes. 

Mr.  Greene,  I  know,  but  that  is  coastwise  trade,  is  it  not? 

The  Chairman.  It  is  not,  Avithin  the  meaning  of  our  navigation 
laws,  I  believe.  I  have  the  opinion  here  of  the  court.  But,  then,  I 
do  not  care  to  waste  time  on  it. 


694      SHIPPING  BOARD,  NAVAL  AUXILTAEY,  AND  MERCHANT  MARINE. 

Mr.  Hampton.  I  admit  that  so  far  as  traffic  on  the  Lakes  has  been 
free  it  has  been  a  positive  benefit  to  the  western  farmers  in  moving 
their  crops  to  the  seaboard. 

Mr.  Greene.  Yes;  and  that  is  all  coastwise  trade;  no  foreign-built 
vessels  are  admitted  to  that  trade. 

Mr.  Hampton.  But  I  consider  it  a  very  important  question  from 
my  point  of  view,  whether  it  would  not  have  been  still  better  if  the 
farmers  had  had  the  benefits  that  would  come  from  an  intermingling 
of  the  Canadian  and  American  traffic. 

Mr.  Loud.  Suppose  there  was  an  intermingling  of  the  transpor- 
tation, the  marketing  of  grain  between  Canada  and  the  United 
States  would  also  be  commingled,  would  it  not  ? 

Mr.  Hampton.  Yes.     That  would  be  a  good  thing. 

Mr.  Hardy.  If  the  vessels  on  the  Lakes  could  be  bought  cheaper 
than  they  can  now,  that  would  undoubtedly  reduce  the  rates,  what- 
ever they  are  now,  or  it  should ;  is  not  that  true  ? 

Mr.  Hampton.  Certainly. 

Mr.  Hardy.  As  I  understand  it,  the  merchant  vessels  on  the  Lakes 
are  of  a  peculiar  kind  and  are  built  in  the  United  States  lay  stand- 
ardized methods  and  are  supposed  to  be  very  cheaply  built.  I  do 
not  know  about  that.  But  the  fact  is  in  the  coastwise  trade  our  ves- 
sels are  more  costly  than  when  built  abroad  and  that  the  overseas 
trade  vessels  built  here  are  more  costly  than  vessels  built  abroad. 
And  it  is  simply  a  question  of  cheapening  the  freights  by  cheapening 
the  cost  of  the  vessel;  is  not  that  so? 

Mr.  Hampton.  I  think  so. 

Mr.  Greene.  I  would  like  to  ask  a  question  now  as  to  whether 
vessels  can  be  built  more  cheaply  abroad  than  they  can  here  at  the 
present  day. 

Mr.  Hampton.  According  to  the  testimony  laid  before  this  com- 
mittee, which  is  my  authority 

Mr.  Greene.  I  have  not  seen  any  testimony  that  they  can  be  built 
cheaper  abroad  to-day  than  they  can  in  this  country. 

Mr.  Hampton.  The  testimony  I  have  read,  which  is  presented  to 
this  committee,  is  my  authority  for  the  statement  that  we  are  now 
able  to  build  ships  as  cheaply  here  as  they  can  be  built  abroad, 
and  that  the  need  of  a  subsidy,  even  from  the  point  of  view  of  the 
most  rabid  ship  subsidy  hunters  is  greatly  minimized,  if  not  elimi- 
nated. 

Mr.  Greene.  Do  you  know  anything  about  the  action  of  Italy, 
France,  England,  Germany,  and  the  other  foreign  Governments  as  to 
whether  the}^  have  subsidies  or  not  ? 

Mr.  Hampton.  My  information  on  those  points  is  mostly  gained 
from  congressional  documents,  most  of  which  are  documents  from 
this  committee.  But  I  do  not  think  it  is  necessary  to  enter  into  that 
discussion. 

Mr.  Greene.  You 'say  it  is  not  necessary  to  subsidize  vessels  here, 
and  I  ask  you  why  you  think  it  is  necessary  to  subsidize  vessels 
abroad.  Their  vessels  have  been  subsidized  from  all  time,  and  a 
merchant  marine,  as  far  as  I  understand  it,  has  been  built  up  and 
sustained  by  subsidies  in  all  those  foreign  conutries. 

Mr.  Hampton.  I  never  stated  that  I  believed  it  was  necessary  to 
subsidize  foreign  shijos. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      695 

Mr.  Greene.  I  did  not  say  that  you  said  it,  but  you  said  that  is 
the  argument  why  there  should  be  no  subsidy  here ;  and  I  asked  you 
then  if  you  had  to  compete  with  the  foreign  trade  with  the  foreign- 
built  vessels  that  are  subsidized  and  liberally  subsidized,  whether 
they  would  not  be  subject  to  unfair  competition  if  there  was  nothing 
to  give  our  ships  any  advantage  on  this  side  of  the  Avater — if  the 
American  vessel  would  not  be  handicapped  in  endeavoring  to  secure 
ocean  trade. 

Mr.  Hampton.  I  do  not  believe  myself  from  my  investigations  that 
the  ocean-carrying  trade  of  any  nation,  to  any  considerable  extent, 
has  been  built  up  on  subsidies.  Certainly  it  is  not  true  of  the  British 
merchant  marine,  which  is  the  biggest  merchant  marine  in  the 
world. 

Mr.  Greene.  What  has  it  been  built  up  on,  if  it  has  not  been  built 
on  subsidies? 

Mr.  Hampton.  Enterprise;  by  being  able  to  build  the  ships  cheap- 
est and  being  able  to  operate  them  the  cheapest. 

Mr.  Greene.  And  they  have  not  subsidized  them? 

Mr.  Hampton.  As  far  as  developing  foreign  commerce  is  con- 
cerned, they  have  all  the  incidents  of  trade  in  their  favor. 

Mr.  Rodenberg.  And  subsidy  in  addition? 

Mr.  Hampton.  The  subsidy  of  the  British  Government  to  its  mer- 
chant marine  is  infinitesimal. 

Mr.  Rowe.  AVould  you  be  willing  this  Government  should  sub- 
sidize to  the  same  extent  that  the  British  Government  does? 

Mr.  Rodenberg.  Do  you  take  them  as  a  standard? 

Mr.  Hampton.  No;  that  is  a  different  question. 

Mr.  Greene.  I  do  not  know^  why;  I  can  not  understand  why,  if 
other  Governments  subsidize  their  vessels  and  give  them  a  direct 
advantage  to  enable  them  to  build  up  their  trade,  which  you  say 
England  has  built  up,  built  up  their  trade  both  home  and  abroad,  it  is 
not  necessarj?^  here. 

Mr.  Hampton.  I  do  not  believe  the  British  trade  has  been  built 
up  by  subsidies. 

The  Chairman.  I  want  to  sa}^  right  here,  Mr.  Hampton,  and  I 
challenge  contradiction,  that  the  British  trade,  that  is,  the  cargo 
trade,  has  never  been  built  up  by  subsidy  at  all;  that  it  has  not  re- 
ceived any  relief  in  the  way  of  subsidy. 

Mr.  Hampton.  That  has  been  by  understanding. 

The  Chairman.  Very  well ;  let  us  clear  that  up.  They  have  paid 
what  is  termed  "  subsidy  "  in  the  matter  of  mail  pay  to  certain  ships 
just  as  we  have  to  four  ships  under  the  American  flag  in  our  overseas 
trade,  under  the  ocean  mail  pay  act  of  March  3,  1891.  But  I  do  not 
Imow  of  any  nation,  unless  it  is  France  (and  I  will  not  say  as  to  that) 
that  subsidizes  its  cargo-carrying  merchant  marine  ships.  If  there 
is  any  nation  that  does  so  I  am  open  to  information.  But  they  do 
pay  what  we  call  ocean  mail  pay  to  certain  lines  of  ships. 

Mr.  Greene.  Certain  subventions  are  paid  by  nearly  every  foreign 
Government  in  some  form — you  may  not  call  it  "  subsidy." 

Mr.  Rodenberg.  How  have  the  amounts  paid  by  the  English  Gov- 
ernment on  mails  compared  with  the  amounts  we  pay? 

The  Chairman.  Less. 

Mr.  Rodenberg.  They  pay  less? 


696      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

The  Chairman.  Yes. 

Mr.  Hardy.  Let  me  state  right  here  that  Senator  Burton  some  years 
ago,  in  a  most  able  speech,  made  the  statement,  in  which  he  was  not 
contradicted,  that  there  was  no  merchant  marine  built  up  by  sub- 
sidies anywhere  in  the  world. 

Mr.  Burke.  Why  should  they  be,  in  view  of  the  fact,  which  is 
acknowledged,  that  the  operation  of  the  foreign  ships  is  much  cheaper 
than  the  operation  of  our  ships,  and  that  the  cost  of  construction  of 
forei*:n  ships  is  cheaper  than  the  cost  of  construction  of  our  ships? 
Why,  then,  is  it  necessary  for  foreign  ships  to  be  paid  a  subsidy  ? 

Mr.  Greene.  Because  they  do;  that  is  all. 

Mr.  Burke.  Why? 

Mr.  Greene.  Because  they  think  it  is  necessary  and  want  to  build 
it  up.  That  is  a  well-known  fact  in  shipping  circles — that  they  think 
it  is  necessary. 

Mr.  Burke.  Why  should  it  be  necessary? 

Mr.  Greene.  I  am  not  saying  why.  I  am  not  here  to  be  questioned 
as  to  that — as  to  why — because  I  do  not  undertake  to  run  all  the 
countries  of  the  world.    I  am  trying  to  look  out  for  America,  if  I  can. 

Mr.  Hampton.  My  purpose,  Mr.  Chairman,  in  coming  before  this 
committee  was  not  to  discuss  the  merits  or  demerits  of  high-speed 
passenger  vessels  or  the  question  of  mail  subventions.  My  purpose 
here  is  to  bring  to  your  attention  the  tremendous  vital  interests  the 
farmers  have  in  the  cargo-carrying  traffic  on  the  ocean.  They  are 
the  biggest  exporters  in  this  country,  measured  in  bulk.  They  have  a 
right  to  some  consideration.  And  we  are  not  concerned  directly  with 
the  question  of  whether  you  are  going  to  build  under  the  American 
flag  a  Lusitania  and  the  corresponding  ships  that  will  speed  the  mails 
across  the  ocean  so  much  faster,  or  whether  they  can  be  comman- 
cleered  by  the  United  States  Government  for  special  naval  purposes 
in  time  of  war.  We  are  here  on  the  question  of  the  cargo  end  of 
this  proposition,  and  we  believe  if  there  is  going  to  be  any  Govern- 
ment aid  in  building  an  American  merchant  marine  that  affects  the 
cargo  freights  and  commerce  of  the  United  States  that  it  should  be 
done  by  direct  Government  ownership  and  operation.  That  is  our 
position,  and  we  are  willing  to  modify  that  position  to  some  ex- 
tent— or,  at  least,  what  we  consider  a  very  big  extent,  so  as  to  get  a 
solution  of  the  present  distressing  situation — along  the  lines  of  the 
bill  that  is  now  pending  before  this  committee.  We  hope  you  will 
take  action  and  report  a  bill  with  a  broadening  of  it  as  I  have  indi- 
cated to-day.  That  is  my  position  and  that  is  the  position  I  think 
you  will  find  that  the  farmers  of  the  United  States — from  Maine  to 
California,  from  the  Canadian  line  to  the  Mexican  Gulf — are  taking 
as  they  study  the  proposition. 

Mr.  Saunders.  You  rather  mean  that  we  ought  to  get  ready  for 
another  situation  like  the  present  one;  not  that  we  could  do  any- 
thing to  relieve  the  present  situation  ? 

Mr.  Hampton.  I  have  not  touched  upon  one  or  two  points  because 
I  am  not  sufficiently  familiar  with  them  to  add  any  value  to  the 
testimon}^  presented  to  this  committee;  but  I  think  if  this  bill  passed. 
and  it  was  broad  enough  so  that  we  could  immediately  bring  into 
operation  for  mercantile  purposes  the  naval  and  military  reserve 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      697 

ships,  transports,  supply  ships,  etc.,  that  are  now  practically  rotting 
at  the  wharves,  so  that  they  could  come  into  the  commerce  of  the 
country,  it  would  be  a  good  thing. 

Mr.  Loud.  Where  are  those  ships  lying  idle  at  the  wharves?  The 
Navy  Department  said  they  had  not  one.  I  have  a  letter  up  in  my 
office  saying  that  they  have  not  a  single  idle  naval  auxiliary,  a  letter 
I  received  last  week.  On  what  authority  do  you  make  that  state- 
ment ^ 

Mr.  Hampton.  Only  on  general  authority. 

Mr.  Loud.  I  can  bring  you  down  the  letter  that  will  make  that 
statement  clear  to  you.  I  do  not  think  it  is  proper  to  put  misin- 
formation into  the  record. 

Mr.  Hampton.  Your  statement  would  correct  the  misinformation 
there. 

Mr.  Greene.  T  make  the  motion  that  Mr.  Loud  put  the  letter  into 
the  record. 

Mr.  Loud.  I  have  right  here  the  printed  information  from  the 
Navy  Department  in  which  they  say  they  have  no  idle  auxiliaries. 

Mr.  Hampton.  If  there  are  no  idle  auxiliaries,  Mr.  Chairman, 
then  we  could  not  bring  them  into  operation  now.  But  it  is  common 
sense,  in  answer  to  that,  if  you  have  a  Navy,  such  as  is  now  proposed, 
that  you  would  have  to  add  auxiliaries  to  adequately  supply  it, 
which  could  not  be  used  in  peace  times  by  the  Navy,  and  they  will 
rot  at  the  wharves  unless  you  provide  means  for  them  to  be  placed 
in  the  commerce  of  the  United  States. 

Mr.  RoDENBERG.  If  vour  statement  in  the  first  instance  relative  to 
vessels  rotting  at  the  wharves  was  correct,  it  would  not  be  necessary 
even  then. 

Mr.  Loud.  Here  is  the  letter  which  says  "  the  number  of  naval 
colliers  is  now  insufficient  to  replenish  the  stock  of  fuel  at  east  const 
stations."  This  is  a  letter  to  Chairman  Padgett,  of  the  Naval  Com- 
mittee, in  response  to  resolution  No.  79,  introduced  by  myself,  asking 
that  the  relief  material  and  supplies  for  Belgium  and  other  Euro- 
pean countries  might  be  transported  by  the  auxiliaries  of  the  Navy, 
and  they  replied  that  they  have  no  ships  for  any  such  purpose:  that 
they  are  all  busy. 

Mr.  Hampton.  Does  that  cover  military  transports? 

Mr.  Loud.  No. 

The  Chairiman.  I  have  made  inquiry  like  Mr.  Loud  in  that  con- 
nection through  the  Department  of  Commerce  and  was  informed 
there  were  no  naval  auxiliaries  ntw  available  and  only  two  trans- 
ports that  might  be  made  available,  but  it  would  require  an  expend- 
iture of  $50,000  on  each  one  in  the  way  of  repairs.  That  is  in  con- 
nection with  Mr.  Lake's  statement  before  the  committee  that  he  had 
not  had  an  opportunity  to  bid  on  a  contract  for  water  pipe  in  Argen- 
tina and,  if  possible,  I  wanted  by  joint  resolution  of  Congress  to 
make  available  our  naval  auxiliaries  to  meet  those  acute  situations 
in  our  foreign  commerce.    And  that  was  mv  information. 

Mr.  Greene.  Now,  Mr.  Chairman,  I  ask  that  Mr.  Loud's  statement 
which  he  has  there  be  placed  in  the  record. 

The  Chairman.  Either  the  letter  to  him  or  that,  whichever  he 
prefers. 


698      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Loud.  And  I  object  to  such  a  statement  as  this  being  put  in 

the  record : 

Should  the  merchant-marine  bill  pass  it  will  put  in  operation  some  of  our 
vessels  now  lying  idle. 

Where  are  those  ships  lying  idle  at  the  present  time?  Nobody 
knows,  because  there  are  none.    Then  this  goes  on  to  say : 

Ten  colliers  that  were  used  during  the  Spanish-American  War,  that  have  a 
capacity  of  10,000  tons,  could  carry  a  cargo  to  Europe  and  one  back  every 
month,  thus  making  24  trips  in  a  year,  and  paying  for  themselves  in  six  mouths, 
are  locked  to  our  wharves  because  of  our  antiquated  shipping  laws. 

That  sounds  familiar  to  you? 

Mr.  EoDENBERG.  Who  is  the  author  of  that  article? 

Mr.  Hampton.  Mr.  William  T.  Creasy. 

Mr.  Loud.  I  do  not  like  to  see  such  material  as  that  go  into  the 
record  when  there  is  no  foundation  for  it.  I  say  that  has  a  familiar 
sound  to  you  ? 

Mr.  Hardy.  If  3'ou  are  asking  me  that  question,  it  does  sound  so. 
But  if  we  have  a  law  that  forbids  a  naval  vessel  ever  being  used  for 
the  benefit  of  our  commerce,  it  is  an  antiquated  law;  and  we  have 
such  a  law. 

Now,  you  say  there  are  no  idle  ships  and  the  chairman  has  just 
stated  there  are  two  military  transports  now  lying  at  the  wharves 
but  which  will  take  $50,000  to  repair.  There  is  a  part  of  your  idle 
ships.  The  truth  is  I  am  in  favor  of  letting  every  ship  owned  by 
the  Ignited  States  be  used  for  the  benefit  of  our  people. 

Mr.  Loud.  So  am  I.  That  is  a  great  hobby  of  mine,  so  far  as  that 
is  concerned. 

Mr.  Hardy.  Yes;  you  introduced  that  resolution,  but  now  you 
seem  to  be  talking  against  it. 

Mr.  Loud.  When  it  says  here  that  there  are  10  colliers  that  are  tied 
up  to  the  wharves,  we  want  some  evidence  that  that  is  true ;  because 
we  know  it  is  not  a  fact. 

The  Chairman.  We  have  your  statement  and  mine  as  to  existing 
conditions,  so  far  as  we  have  been  able  to  investigate  them. 

Mr.  Rodenberg.  You  want  to  put  the  Secretary's  information  in 
here  because  that  is  official. 

The  Chairman.  I  say  either  the  letter  to  him  or  the  letter  of  the 
Secretary. 

Mr.  Greene.  Ought  this  statement  to  go  into  the  record  that 
speaks  of  there  being  10  colliers  tied  up  to  the  wharves,  if  there  is 
no  truth  in  it? 

Mr.  Eodenberg.  Let  it  go  in  and  then  let  the  official  denial  fol- 
low it. 

Mr.  RowE.  It  is  very  good  as  showing  the  reason  why  the  farmers 
voted  the  way  they  did. 

Mr.  Loud.  The  letter  is  only  about  two  or  three  lines  long  and 
answers  the  direct  statement  that  there  are  no  idle  colliers  at  this 
time. 

(The  letters  above  referred  to  are  as  follows:) 

Admiral  Blue, 

Chief,  Bureatt  of  Navigation,  Citij. 
My  Deak  Admiral:  In  Document  No.  20,  present  session,  page  201,  I  notice 
where  seven  of  the  colliers  were  in  reserve  or  under  repairs  for  part  of  the 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      69i> 

years  1914  and  1915.  I  desire  to  ask  if  any  of  the  auxiliaries  belonging  to  the 
Navy  are  now  in  reserve,  and  if  so,  will  you  kindly  give  me  the  names  of  such 
ships. 

Thanking  you  for  this  information,  I  am. 
Very  truly,  yours, 

Geo.  a.  Loud. 

Navy  Department, 
Bureau  of  Navigation,  * 

Washington,  D.  C,  February  29,  1916. 
My  Dear  Mr.  Loud:  Referring  to  your  letter  of  the  25th  instant,  I  beg  to> 
inform  you  that  at  the  present  none  of  the  naval  colliers  are  in  reserve  or  out 
of  service. 

Very  sincerely,  yours, 

J.  H.  Dayton, 
Acting  Chief  of  Bureau. 
Hon.  George  A.  Loud,  M.  C. 

House  of  Representatives,  Washington,  D.  C. 


transportation  of  relief  supplies  in  naval  colliers. 

Navy  Department, 
Washington,  February  19,  1916. 
My  Dear  Mr.  Padgett  :  I  have  given  careful  consideration  to  your  letter  of 
February  5.  referring  to  me  for  recommendation  and  report  House  resolution 
No.  79.  relative  to  the  transportation  of  relief  supplies  in  naval  colliers.  I  have 
also  obtained  the  opinion  of  the  Secretary  of  State  in  regard  to  the  proposed 
resolution,  as  suggested  by  you,  and  a  copy  of  his  letter  is  inclosed. 

The  objections  to  the  proposed  resolution  are  twofold.  First,  an  interna- 
tional objection,  the  character  of  which  is  set  forth  in  the  letter  from  the  Sec- 
retary of  State,  in  whose  opinion  I  concur. 

Second,  a  departmental  objection.  The  services  of  all  naval  colliers  are 
urgently  required  for  supplying  the  needs  of  the  ships  and  shore  stations  of 
the  Navy,  and  the  use  of  any  naval  colliers  whatsoever  for  the  purposes  indi- 
cated in  the  proposed  resolution  would  seriously  cripple  the  efficiency  of  the 
Navy.  Present  conditions  are  bound  to  hold  during  the  continuance  of  the 
present  war,  and  for  some  time  thereafter.  Even  if  colliers  were  available, 
their  use  for  the  purposes  indicated  would  involve  expenses  for  steaming  coal, 
stevedoring,  etc.,  and  if  these  expenses  are  not  borne  by  the  relief  organizations, 
they  must  be  borne  by  the  Navy  from  already  overburdened  appropriations.  I 
inclose  a  letter  from  the  Bureau  of  Supplies  and  Accounts,  approved  by  the 
Chief  of  Naval  Operations,  giving  the  detailed  reasons  for  this  objection. 

For  the  reasons  above  given  I  earnestly  recommend  that  House  resolution 
No.  79  be  not  enacted  into  law. 
Very  sincerely, 

JosEPHUs  Daniels. 
Hon.  L.  P.  Padgett.  M.  C, 

Chairman  Committee  on  Naval  Affairs, 

House  of  Representatives,  Washington,  D.  C. 

Mr.  Hardy.  When  was  the  article  ^Yritten  to  which  Mr.  Loud  so 
strenuously  objects? 

Mr.  Hampton.  It  was  published  in  the  current  number  of  the 
Penns3'lvania  Grange  News. 

Mr.  Loud.  It  is  March. 

Mr.  Hampton.  It  is  the  official  paper  of  the  Pennsylvania  State 
Grange,  March,  1916. 

Mr.  Hardy.  Now  you  have  that  article  and  those  letters  both  in 
the  record. 


CREATING  A   SHIPPING   BOARD,  A  NAVAL  AUXILIARY,  AND 
A  MERCHANT  MARINE. 


Committee  on  Merchant  Marine  and  Fisheries, 

House  of  Representatives, 

Saturday,  March  4,  1916. 

STATEMENT  OF  CAPT.  W.  S.  A.  SMITH,  EXPERT  IN  FARM 
PRACTICE,  UNITED  STATES  DEPARTMENT  OF  AGRICUL- 
TURE. 

The  Chairman.  How  long  have  you  been  in  the  Agricultural 
DeT)artment  ? 

Capt.  Smith.  Just  a  year.  I  came  down  here  last  year.  But  I  do 
not  represent  the  department  here  in  any  way  at  all. 

The  Chairman.  \^1iat  was  3'our  business  before  ? 

Capt.  Smith.  Prior  to  that  time  I  had  been  one  of  the  large  farmers 
in  Iowa  for  18  years.  Before  that  I  was  21  years  at  sea  and  had 
command  of  a  ship  for  about  10  years. 

The  Chairman.  Proceed. 

Capt.  Smith.  I  do  not  quite  understand  what  I  am  here  for.  I  was 
asked  to  appear  here,  and  I  do  not  understand  just  on  what  lines, 
Mr.  Chairman. 

The  Chairman.  The  only  question  before  the  committee  is  the  con- 
sideration of  House  bill  10500,  and  I  presume  the  committee  would 
like  to  have  an  expression  of  opinion  from  you  with  reference  to  the 
merits  of  this  proposed  legilsation. 

Mr.  Greene.  Wlio  asked  you  to  come  before  the  committee  ? 

The  Chairman.  Mr.  Hampton  requested  me  to  invite  him  to  appear 
before  the  committee,  and  I  requested  the  Secretary  of  Agriculture  to 
grant  him  leave  for  that  purpose. 

Capt.  Smith.  What  I  meant  was  this,  that  I  did  not  know  what 
particular  point  I  was  here  for,  because  I  have  had  rather  a  peculiar 
career,  having  had  an  intimate  knowledge  of  shipping,  and  havmg  been 
brought  up  on  the  seacoast  and  lived  in  a  shipbuilding  yard  practi- 
call}^  all  of  my  life,  saw  the  building  of  four  new  ships,  and  superin- 
tended the  building  of  the  last  one,  which  I  sailed,  and  it  gave  me  a 
rather  peculiar  experience  in  the  shipping  line. 

The  Chairman.  Where  were  you  raised? 

Capt.  Smith.  In  Dundee,  Scotland. 

The  Chairman.  Have  you  read  this  bill? 

Capt.  Smith.  Yes,  sir;  I  have  gone  over  this  bill  very  carefully. 

The  Chairman.  Give  the  committee  any  suggestions  you  have  to 
make  in  regard  to  it. 

Capt.  Smith.  The  question  in  section  4,  as  to  the  coastwise  article 
in  there,  I  do  not  know  whether  I  need  discuss  that  at  aU,  because  you 
32910—16 45  701 


702      SHIPPING  BOARD,  NAVAI,  AUXILIARY,  AND  MERCHANT  MARINE. 

have  it;  but  in  section  11  there  is  in  this  bill  a  section  that  I  was  not 
quite  able  to  understand,  that  is  in  section  1 1  where  you  provide  here 
that  the  officers  and  crews  of  such  vessels  wno  may  volunteer  for  the 
purpose  may  be  enrolled  as  members  of  such  reserve  in  various  ranks 
and  ratings,  corresponding  to  those  of  the  United  States  Navj^  not 
above  the  rank  of  lieutenant  commander,  provided  they  are  citizens 
of  the  United  States,  under  such  regulations  as  may  be  prescribed  by 
the  Secretary  of  the  Navy  with  the  approval  of  the  board.  And  then 
it  goes  on  to  state  the  remuneration  which  those  men  will  get ;  and  I 
can  not,  as  a  seaman,  see  on  what  basis  that  remuneration  is  fixed  and 
why  it  should  be  fixed  on  that  fine  and  what  you  are  giving  that  money 
for. 

The  Chairman.  The  purpose,  as  I  understand  it,  is  to  build  up  the 
naval  reserve.  Instead  of  having  these  men  on  battleships  and  bat- 
tle cruisers  and  naval  auxiliaries  in  time  of  peace  without  anything  to 
do,  to  encourage  men  to  go  into  the  merchant-marine  service.  At  the 
same  time  it  is  intended  to  give  them  additional  pay  with  a  view  to 
obtaining  them  for  service  in  the  Navy  in  the  event  of  war. 

Capt.  Smith.  Yes,  sir;  in  Great  Britain  they  have  a  naval  reserve 
in  which  a  seaman — I  do  not  know  the  exact  amount  he  gets,  but  it 
is  very  small — gets  something  like  $5  or  $6  a  month  extra  if  he  joins 
the  naval  reserve;  and  then,  in  case  of  war,  if  he  is  called  on,  the  very 
minute  he  steps  aboard  of  a  man-of-war,  the  .So  or  so  a  month  which 
he  has  been  receiving  stops,  and  then  he  gets,  aboard  that  man-of-war, 
the  same  rates  and  the  same  privileges  as  anyone  in  the  same  rank 
that  he  is;  but  in  this  peculiar  case  that  you  have  here,  you  take  the 
case  here  of  these  two  army  transports  that  met  off  of  the  Canary 
Islands,  the  British  and  German,  in  which  the  British  was  sunk. 
Suppose  we  were  to  have  a  war  now  and  had  happened  to  have  a 
vessel  in  the  Canary  Islands,  and  you  say  to  a  vessel,  "we  will  send 
you  some  guns  and  make  you  into  an  Army  auxiliary,"  and  suppose 
I  have  joined  that  vessel  under  the  rate  of  $5  a  month  by  joining  the 
reserve  and  in  a  week  that  vessel  is  sunk;  I  woidd  get  about  75  cents, 
or  my  widow  would,  for  joining  it.  If  I  joined  that  vessel  it  seems  to 
me  I  ought  to  join  with  the  same  pay  and  the  same  pension  as  the 
other  members  get.  But  when  you  simply  pay  $5  a  month  you  have 
two  rates  of  pay  aboard  a  vessel  which  will  create  aU  kinds  of  feeling. 
He  is  to  get  $5  a  month  more.  More  than  what?  More  than  the 
present  rate  of  pay;  but  that  might  mean  that  if  he  goes  aboard  a 
man-of-war,  when  he  is  caUed  in  the  reserve,  he  is  paid  as  an  able 
seaman  $30  a  month,  whereas  these  men  might  in  a  pinch  like  now, 
be  getting  $40,  and  this  Avould  make  it  S45. 

Ihe  Chairman.  This  does  not  apply  to  a  man-of-war  or  the  Navy 
at  all;  it  applies  to  merchant  vessels. 

Capt.  Smith.  I  understand  that,  sir;  but  when  that  vessel  is  taken 
in  as  a  naval  reserve  vessel,  she  becomes  a  part  of  the  Navy. 

The  Chairman.  Very  well;  when  they  are  taken  in  as  a  naval 
reserve  vessel,  if  these  men  then  enlist  in  the  Navy,  they  will  get  the 
pay  of  the  man  in  the  Navy,  will  they  not  ? 

Capt.  Smith.  It  does  not  say  so  here. 

The  Chairman.  It  says  under  regulations  to  be  prescribed  by  the 
Secretary  of  the  Navy  with  the  approval  of  the  board. 

Capt.  Smith.  It  seems  to  me — 1  may  be  wTong  in  it — if  the  first 
part  had  been  left  in  and  the  remuneration  had  been  left  out,  and  it 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MEKCHANT  MARINE.     703 

had  all  just  simply  been  left  to  the  Secretary  of  the  Navy  as  to  the 
kind  of  a  naval  reserve  he  wanted,  I  think  it  would  be  stronger. 

The  Chairman.  In  the  British  merchant  marine  there  are  certain 
men  who  belong  to  the  naval  reserve. 

Capt.  Smith.  Yes,  sir. 

The  Chairman.  What  pay  do  they  get? 

Capt.  Smith.  I  do  not  know  what  it  is,  because  I  have  been  away 
from  there  for  17  years,     I  do  not  remember. 

The  Chairman.  They  do  not  get  the  same  pay  as  men  in  the  navy, 
do  they? 

Capt.  Smith.  When  they  are  changed  they  do;  yes,  sir. 

Mr.  Hardy.  This  section  11  only  applies  to  vessels  being  operated 
under  this  act;  when  the  vessel  is  taken  over  by  the  Navy,  it  would^ 
not  be  operated  under  this  act. 

The  Chairman.  No. 

Mr.  Hardy.  It  won't  apply  at  that  time.  I  think  that  will  relieve 
your  misapprehension. 

The  Chairman.  Yes;  being  operated  under  this  act  as  a  mercan- 
tile marine.  When  they  are  transferred  to  the  Navy  then  they  would 
come  under  that  law  and  the  regulations  affecting  the  Navy. 

Mr.  Hardy.  As  a  part  of  the  naval  force. 

The  Chairman.  This  provision  in  the  bill  was  framed  by  men  who 
are  qiiite  familiar  with  the  Navy  and  the  law  affecting  the  Navy, 
and  they  do  not  see  any  such  difiiculty  as  seems  to  arise  in  your  mind. 

Mr.  Hardy.  It  seems  to  me  it  would  certainly  induce  more  Ameri- 
can boys  to  go  aboard  these  merchant  ships  and  become  a  source 
from  which  our  Navy  could  draw  resources  in  time  of  war,  giving 
them  some  advantage  by  reason  of  their  volunteering  to  become  a 
naval  reserve  force. 

Capt.  Smith.  Yes,  sir. 

Mr.  Rodenberg.  You  are  now  an  American  citizen,  are  you  not? 

Capt.  Smith.  Yes,  sir.  There  is  one  other  thing  which  I  heard 
here.  I  heard  Mr.  Hampton  on  the  stand  speaking  of  the  attitude 
of  the  American  farmer.  When  you  get  west  of  Pittsburgh  the  Ameri- 
can farmer  is  extremely  interested  in  the  mercantile  marine  bill  from 
the  preparedness  end,  but  the  other  end  has  never  been  put  in  front 
of  them. 

Mr.  Hardy.  Has  never  been  what  ? 

Capt.  Smith.  The  other  end  has  never  been  put  in  front  of  them 
very  strongly.  In  all  of  the  literature  out  West,  in  all  of  the  articles 
dealing  with  our  proposed  shipping  bill,  they  have  been  putting  it 
in  front  of  the  farmer  from  the  preparedness  point — from  the  trans- 
port end  more  than  the  other  way.  He  does  not  have  any  clear 
undei*standmg  of  it  all  through  the  Middle  West  from  the  cargo- 
canymg  end. 

The  Chairman.  In  which  end  is  he  interested  ? 

Capt.  Smith.  He  would  be  extremely  interested  in  the  other  if  he 
ever  had  it  explained  a  little  bit.  And  the  backbone  of  all  of  the 
mercantile  marme  is  the  tramp  steamer.  That  is  the  backbone  of 
the  mercantile  marine.  But  there  are  so  many  wrong  statements 
made  as  to  the  reason  why  we  do  not  get  a  mercantile  marine  here. 
There  has  not  been,  up  to  the  time  that  the  war  broke  out,  any  great 
profit  in  a  mercantile  marine  for  any  stockholder.     If  you  take  it  for 


704      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

a  term  of  years,  the  British  mercantile  marine  has  been  built  up 
largely  because  the  people  were  forced  to  take  shares  in  that. 

The  Chairman.  Explain  that.     We  heard  Mr.  Curry  develop  that. 

Capt.  Smith.  I  beg  your  pardon. 

The  Chairman.  One  of  the  members  of  the  committee  developed 
that  point  in  part.     Tell  us  what  you  know  about  it. 

Capt.  Smith.  If  the  shipo"\vner  in  Great  Britain  is  the  managing 
owner  of  12  ships  he  naturally  sees  to  it  that  he  has  the  controlling 
interest.  Thirty-three  sixty-fourtlis  give  him  the  controlling  hiterest, 
and  he  naturally  sees  to  it  that  as  long  as  he  or  his  family  or  his  heirs 
keep  that  controlling  interest  they  control  the  12  ships.  Now,  it  is 
necessary  for  that  man  to  see  that  these  ships  do  not  deteriorate,  and 
in  nearly  all  of  these  shipping  companies  in  England  there  is  a  clause 
that  when  the  ship  is  lost  they  do  not  take  the  money  and  divide  it 
among  the  stockholders,  but  that  clause  provides  that  another  ship 
shall  be  built  with  that  money.  And  now  here  a  ship  is  lost.  She 
has  gone  out  of  date.  The  insurance  is  S100,000.  The  demand  for 
50  years  has  gone  from  a  600-ton  ship  to  a  6,000-ton  ship.  So  he 
says  to  the  stockholders:  "We  have  got  to  get  a  new  ship  and  can 
no'^t  build  a  $100,000  ship,  but  we  must  build  a  $200,000  ship  now,  and 
you  have  to  put  up  the  other  $100,000." 

The  other  ^stockholders  say,  ''Why,  I  have  not  been  getting  any 
great  dividends  from  ships;  I  do  not  beheve  I  want  to  take  any  more 
stock."  But  here  is  a  man  supplymg  that  ship  with  paints.  He 
says,  "Why,  you  are  suppl^mig  mj  ships  with  paints  and  oils.  If 
you  want  to  hold  that  business,  you  take  a  share  of  stock  or  some- 
bod}^  else  will  supply  it."  And  after  this  man  has  taken  two  or 
three  shares,  he  goes  to  the  man  who  makes  the  paint  and  he  says, 
"Here,  I  can  not  take  any  more  shares;  they  do  not  pay  any  divi- 
dends. If  you  want  to  seU  me  paint,  you  have  to  take  a  share." 
And  so  the  whole  of  Great  Britam  is  interlocked,  not  in  the  direct 
profit,  but  in  the  indirect  profit.  They  make  the  profit  out  of  the 
business;  but  their  business  is  profitable. 

But  I  am  talking  here  of  a  direct  profit,  and  you  can  not  take 
the  last  two  years  as  a  sample.  You  take  the  average  stockholder 
of  shipping  in  Great  Britain  up  to  the  last  five  or  six  years,  you 
could  not  get  your  money  out  of  these  shipping  companies.  If  you 
had  a  widow  and  she  tried  to  sell  her  shares  in  shipping,  she  would 
not  get  very  much  for  them.  They  are  practically  unsalable  because 
they  are  tied  up  in  these  contracts  or  in  these  old  agreements  of  the 
limited  liabihty  company,  as  they  call  it  in  England.  The  shipper 
now  or  the  o^\^ler  in  Great  Britain,  when  he  has  a  ship  beginning  to 
get  out  of  class,  sells  it  to  a  Norrv^e^ian  or  to  the  Swedes,  who  run  a 
whole  lot  cheaper  and  have  a  difterent  classification  with  Lloyds, 
which  allows  them  to  buy  a  cheaper  ship  and  to  compete — — 

Mr.  HiftiDY.  You  say  that  a  man  who  controls  these  ships  owns 
thirty-three  sixty-fourths  ? 

Capt.  Smith.  Yes,  sir. 

Mr.  Hardy,  He  wants  it  so  that  he  can  control  the  ship.  Now  he 
has  his  aU  invested  in  there,  has  he  not  ?  What  inducement  is  there 
for  a  man  to  own  thirty-three  sixty-fourths  if  there  is  no  profit  in 
British  shipping? 

Mr.  RoDENBERG.  There  is  a  good  salary  attached  to  it. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      705 

Capt.  Smith.  A  great  many  of  those  limited  liability  companies 
when  they  started  out  60  or  80  years  ago,  had  a  very  innocent  look- 
ing little  clause  in.  them  which  stated  that  the  managing  owner  was 
to  receive  2  per  cent  of  the  gross.  And  when  they  started  in  the 
ship  was  makmg  two  voyages  in  12  months,  of  only  500  tons  register, 
and  it  did  not  amount  to  a  great  deal.  The  Cunard  Co.  started  that 
way.  But  you  can  imagine  what  it  means  now  with  a  ship  of  40,000 
tons  registry,  when  he  gets  2  per  cent  out  of  the  gross  every  10  days. 
He  has  a  fat  thing. 

Mr.  Hardy.  So  that  the  owner  of  that  per  cent  is  simply  gobbling 
up  the  profits  of  the  whole  business  ? 

Capt.  Smith.  I  have  known  the  case  of  a  line  which  when  it  first 
started  went  to  Australia,  and  that  ship  was  managed  by  Thomas 
Greenland  &  Co.,  in  London,  and  during  many  years  the  owners  of  the 
ship  presented  them  with  enough  money  to  keep  them  going  out  of 
their  profits,  because  of  their  rake-off — I  can  not  call  it  a  rake-off;  it 
was  the  agreement  and  they  were  entitled  to  it.  But  the  profits 
are  large  and  all  of  the  profits  go  to  the  managing  owner  and  not  to 
the  stockholders. 

Mr.  Hardy.  So  it  amounts  to  this,  that,  in  ^England,  under  the 
compulsion  of  business  conditions,  the  public  are  called  upon  to 
subscribe  to  nondividend  paying  stock-  because  they  are  benefited 
indirectly;  while  the  man  who  owns  the  major  interest  takes  all  of 
the  profits  out  of  the  business  ? 

Capt.  Smith.  Exactly;  without  a  doubt. 

Mr.  Hardy.  Tliat  is  a  business  scheme  which  is  not  lacking  in 
shrewdness. 

Mr.  RoDENBERG.  That  is  high  finance. 

Capt.  Smith.  Shipping  is  a  great  gamble,  and  has  always  been  a 
great  gamble,  the  same  as  oil  in  Texas.  You  have  five  or  six  years 
of  good  times 

Mr.  Greene.  I  did  not  know  they  had  anything  down  in  Texas 
that  there  was  a  gamble  in,  except  cotton. 

Mr.  RowE.  What  do  you  think  about  Govermnent-owned  ships 
in  America  ?  You  are  an  American  citizen ;  are  you  in  favor  of 
Govermnent-owned  and  Government-operated  ships  ? 

Capt.  Smith.  The  point  in  favor  of  this  new  bill  is  here,  that  it 
does  not  stipulate  for  Government-owned  ships.  If  this  bill  was  a 
straight  out  bill  calling  for  Government-owned  ships,  as  an  American 
citizen  I  would  not  be  in  favor  of  it.  But  as  this  bill  is  now,  it  does 
not  call  for  Government-owned  ships ;  it  calls  for  the  Government  to 
start  those  ships  and  to  leave  the  citizen  or  citizens  the  privilege  of 
buying  them.  But  I  can  not  see  why  anyone  should  object  to  it 
on  that  basis. 

Mr.  RowE.  Do  you  think  the  Government,  if  it  did  operate  ships, 
would  make  any  money  out  of  it?  I  mean  covering  a  long  period  of 
years ;  not  just  now. 

Capt.  Smith.  You  are  going  back  to  the  question  of  direct  return, 

Mr,  RowE.  Yes;  to  the  question  of  direct  return  after  you  have 
charged  off  depreciation  from  your  boat. 

Mr.  RoDENBERG.  The  Government  could  not  make  any  indirect 
profits. 

Capt.  Smith,  No;  I  do  not  think  I  would  undertake  to  buy  my 
stock  for  the  direct  profits,     I  would  not  expect  to  get  very  large 


706      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

dividends  if  it  was  a  case  of  a  direct  profit.  But  the  indirect  profit 
from  the  building  up  of  this  trade — it  would  have  a  very  great  bearing, 
there  is  no  question  about  it.  The  greatest  handicap  you  have  to 
this  provision  in  here  is  the  coastwise  provision  on  your  shipping. 
If  you  undertake  to  build  up  a  commerce  with  South  America  to-day, 
you  have  got  to  allow  your  people  to  compete.  You  have  a  firm  in 
New  York  to-day  which  is  going  to  charter  a  ship  to  send  her  to 
Buenos  Aires.  I  have  a  little  factory  40  miles  from  Norfolk  down 
here,  and  I  have  40  tons  which  I  want  to  ship  from  there.  How  do 
I  have  to  ship  that  to  get  it  to  Buenos  Aires  ?  I  have  to  ship  those 
goods  to  New  York  to  be  loaded.  The  freight  from  Norfolk  to  New 
York  is  more  than  the  freight  down  the  other  way.  If  it  was  pos- 
sible for  that  ship  to  come  down  there  and  gather  up  half  a  cargo  at 
Norfolk,  and  to  go  on,  it  would  be  a  very  great  help. 

Mr.  RowE.  That  is  the  main  reason  you  believe  in  tramp  steamers, 
is  it  not,  because  they  can  stop  at  any  place  and  load  cargo  ? 

Capt.  Smith.  Yes,  sir.  We  are  putting  all  of  our  weight  here  on 
those  larger  vessels  and  When  you  spoke  here  to-day  of  Great  Britain 
subsidizing  her  steamships,  there  are  no  tramp  steamers  receiving 
anything  in  the  wa}i5  of  a  subsidy.  The  vessels  subsidized  are  the 
large  boats  carrying  the  mails  which  may  be  used  as  transports. 
They  are  built  under  Government  supervision  and  may  be  called 
upon,  and  they  receive  a  subsidy  for  that.  There  is  no  such  thing 
as  a  tramp  steamer  receiving  a  subsidy'".  And  it  is  the  tramp  steamer 
that  has  built  up  the  commerce  of  Great  Britain,  It  is  the  tramp 
steamer  that  we  want  here,  and  it  is  the  tramp  steamer  which  you 
shut  out  by  leaving  those  old  regulations  in  operation  which  you 
have  here  now. 

Mr,  Greene.  I  understand  there  is  no  law  that  prohibits  a  foreign 
vessel  from  taking  on  cargo  and  carrying  it  to  Buenos  Aires,  to  a 
foreign  port  ? 

Capt,  Smith.  No,  sir;  there  is  no  law  prohibiting  that. 

Mr.  Greene,  But  if  she  goes  from  port  to  port,  and  she  takes 
cargo  at  Norfolk  and  carries  it  to  Charleston,  that  would  be  con- 
trary to  the  law, 

Capt.  Smith.  Yes,  sir. 

When  I  speak  of  the  coastwise  law  I  moan  you  have  extended  those 
coastwise  laws  to  such  an  extent  that  in  a  way  it  seems  sort  of  a  joke. 
If  you  had  a  provision  that  it  was  legitimate  coastwise  trade  here  I 
would  not  care  to  see  it.  But  where  now  a  ship  under  this  bill,  for 
instance,  built  on  the  Clyde,  comes  over  here  and  is  put  under  the 
American  flag  and  American  registry,  and  I,  as  the  master  of  that 
ship,  am  offered  a  cargo  in  New  York  of  6,000  tons  for  Japan  and 
4,000  tons  for  San  Francisco,  to  go  through  the  Panama  Canal,  you 
help  make  the  canal  pay  by  doing  that  if  I  can  discharge  that  4,000 
tons  at  San  Francisco  and  take  another  4,000  tons  aboard  for  Japan; 
but  I  am  prohibited  from  doing  that,  and  yet  an  old  coaster  can  do  it. 
It  is  a  dog  in  the  manger.  Now,  if  you  are  going  to  build  up  5^our 
foreign  trade  why  should  not  that  vessel  be  allowed  to  go  to  San 
Francisco  ?  You  have  got  to  carry  that  stuff  and  your  coastwise 
vessels  can  not  do  this,  and  yet  that  big  vessel  is  prohibited  from 
doing  it.  That  is  what  I  object  to.  I  do  not  object  to  the  little 
fellows,  the  coasters,  having  the  right,  but  they  are  not  able  to  do 
this,  and  yet  you  shut  us  out  by  this  provision. 


riHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      707 

Mr.  Loud.  What  is  the  reason  the  lumber  carriers  brincring  himber 
from  the  Pacific  coast  around  to  New  York  can  not  bring  the  return 
cargo  of  4,000  tons  you  spoke  of? 

Capt.  Smith.  I  did  not  quite  get  that. 

Mr.  Loud.  What  is  the  reason  the  lumber  carriers  carrying  bulk 
freight  and  lumber  from  the  western  coast  around  to  the  east  coast 
can  not  on  the  return  trip  carry  the  4,000  tons  that  you  spoke  of. 
You  say  it  could  not  be  carried.  Why  could  it  not  be  carried  by  the 
coas^vise  ships  ?  You  say  it  could  not  be  carried  by  the  coastwise 
ships. 

Capt.. vSm iTii .  Why  not? 

Mr.  Loud.  Yes,  why  not. 

Capt.  Smith.  A  vessel  is  not  coastwise  if  she  is  going  to  Japan. 

Mr.  Loud.  But  the  lum.ber  carriers  and  the  other  bulk  carriers, 
carrying  cargoes  from  the  western  coast  around  to  the  eastern  coast, 
to  New  York,  are  coastwise. 

Capt.  Smith.  Certainly  they  are. 

Mr.  Loud.  "WTiy  could  they  not  carry  the  4,000  tons  around  to 
San  Francisco  ? 

Capt.  Smith.  Because  they  do  not  hav^^  enough  of  them  to  do  it. 
But  in  order  to  g(>t  some  more — that  is  what  this  is  for,  I  under- 
stand  

Mr.  Loud.  It  is  just  the  other  way.  The  bulk  of  the  stuff  goes 
around  and  there  is  no  return  cargo  for  them.  Your  example  does 
not  work  out  very  well,  it  seems  to  me. 

Capt.  Smith.  1  am  not  quite  sure. 

The  Chairman.  There  is  a  demand  on  the  Pacific  coast,  as  I 
understand,  for  a  larg(^r  tonnage  from  the  Pacific  coast  east — that  is, 
to  carry  the  lumber,  the  fish,  and  the  fruits,  and  other  commodities 
of  the  Pacific  coast  not  only  to  foreign  countries,  but  to  the  eastern 
coast. 

Capt.  Smith.  Mr.  Chairman,  the  point  that  the  gentleman  brings 
out,  it  seems  to  me,  brings  up  the  very  point  that  I  wanted  to  bring 
out  plainly.  He  says,  Why  don't  they  carry  a  cargo  back?  Because 
they  do  not  get  it  to  carry,  do  they  ? 

Mr.  Loud.  They  would  get  it  if  the  Enghsh  ships  did  not  take  it. 
There  is  plenty  of  tonnage  moving  in  this  direction. 

STATEMENT  OF  CAPT.  WILLIAM  A.  WESCOTT,  PRESIDENT  OF 
THE  MASTERS,  MATES,  AND  PILOTS  ASSOCIATION  OF  THE 
PACIFIC  COAST. 

Capt.  Wescott.  ^Iv.  Chau*man,  I  desire  to  state  that  for  many 
years  I  have  heard  the  same  statement  as  made  by  Capt.  Smith  in 
reference  to  the  method  used  in  the  upbuilding  of  the  British  mer- 
chant marine;  that  is,  in  the  matter  of  a  kind  of  a  forced  proposition 
on  the  British  manufacturers  to  take  stock  in  British  vessels.  But 
I  am  of  the  opinion  that  Capt.  Smith  cut  the  matter  a  trifle  short,  or 
probably  it  may  have  slipped  his  memory;  I  therefore  want  to  ask 
Capt.  Smith  if  it  is  not  a  fact  that  once  such  manufacturers  put  their 
money  in  such  vessels,  if  it  is  not  pretty  hard  for  them  to  ever  get  it 
out  agam? 

Mr.  PIardy.  Yes;  he  stated  that. 

Mr.  RowE.  He  said  they  could  not  sell  their  interest. 


708      SHIPPING  BOAED,  NAVAL  AUXILIAEY,  AND  MERCHANT  MAEINE. 

Capt.  Wescott.  I  missed  that. 

Mr.  Saunders.  He  said  if  a  widow  had  some  of  that  stock  and  tried 
to  get  rid  of  it  she  would  have  a  pretty  hard  time. 
•  Capt.  Wescott.  Another  matter  I  have  in  mind,  Mr.  Chairman: 
For  many  years  I  have  always  thought  it  was  a  pretty  hard  proposi- 
tion for  an  American  shipowner  to  compete  with  British  ships  under 
those  conditions  and  make  any  money,  because  the  British  manu- 
facturers do  not  expect  dividends  from  such  stocks. 

If  they  get  2  or  2^7  per  cent  interest  on  their  money,  they  think 
they  are  doing  well.     Am  I  correct,  Capt.  Smith  ? 

Capt.  Smith.  Yes,  sir. 

Capt.  Wescott.  The  managing  owners,  as  Capt.  Smith  states,  con- 
trol 33  shares  of  stock,  which  is  the  controlling  interest,  the  number 
of  shares  of  stock  in  each  vessel  being  65. 

Mr.  Greene.  Sixty-four. 

Capt.  Wescott.  I  thought  it  was  65.  The  managing  owner  is  the 
man  who  makes  the  money.  It  is  the  same  on  the  Pacific  coast  at 
the  present  time  in  the  coastwise  trade.  Companies  are  formed  by 
some  would-be  managing  owner,  they  being  very  careful  in  the  mat- 
ter of  having  control  of  the  majority  of  the  stock.  They  receive 
from  3  to  5  per  cent  of  the  vessel's  gross  earnings  tor  their  services, 
and  they  become  very  wealthy,  while  the  stockholders  receive  but  a 
very  small  dividend,  if  any. 

The  Chairman.  It  appears  that  our  American  shipowners  have 
caught  on  to  the  British  plan  and  are  working  it  here  ? 

Capt.  Wescott.  Certainly.  Mr.  Chairman,  I  consider  this  bill  a 
very  good  one;  but  I  do  not  see  any  way  other  than  that  the  Gov- 
ernment will  lose  money  in  undertaking  to  compete  with  the  mer- 
chant marine  of  Great  Britain.  There  was  a  gentleman  before  this 
committee  last  Thursday  who  represented  some  Brazihan  hne.  He 
stated  to  the  committee  that  they  coidd  not  in  normal  times  get  a 
reasonable  amount  of  cargo  for  their  ships,  and  he  also  stated  that 
the  shippers  preferred  for  some  reason  to  sliip  their  freight  by  British 
vessels.  Why  ?  Because  the  British  manufacturers  own  an  interest 
in  the  ships,  and  for  that  reason  whenever  they  buy  any  foreign 
goods  they  order  such  goods  shipped  on  vessels  in  which  they  own 
an  interest.     Is  that  correct,  Capt.  Smith. 

Capt.  Smith.  That  is  correct. 

Mr.  Rowe.  They  are  stockholders? 

Capt.  Wescott.  Certainly  they  are  stockholders.  That  is  the 
reason,  Mr.  Chairman,  that  our  American  shipping  is  handicapped  in 
the  foreign  trade  under  those  conditions. 

The  Japanese  vessels  receive  a  subsidv  from  their  Government. 
Take  the  Toyo  Kishen  Kaisha  Co.,  who  receive  from  $1,200,000  to 
$1,300,000  as  a  subsidy.  But  there  is  a  clause  inserted  in  the  agree- 
ment between  the  Government  and  all  subsidized  Unes  that  the  corn- 
panies  receiving  a  subsidy  from  the  Government  can  not  raise  their 
freight  rates  on  Japanese  goods.  Therefore  the  manufacturers  of 
Japan  can  send  their  product  to  foreign  markets  at  the  same  freight 
rates  that  they  did  prior  to  the  war.  At  the  same  time  they  charge 
exorbitant  rates  on  freight  from  the  Chinese  ports  or  from  the  ports 
on  the  Pacific  to  the  Orient.  What  I  have  stated  is  common  knowl 
edge  along  the  water  front  of  San  Francisco. 


SHIPPING  BOARD,  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE.      709 

Mr.  Chairman,  my  friend  Mr.  Hampton,  when  the  question  was 
asked  him  if  the  farmers  were  in  favor  of  manning  vessels  with  foreign 
officers  and  foreign  seamen,  did  not  really  commit  himself  one  way 
or  the  other. 

The  Chairman.  He  said  that  they  approved  of  the  seamen's  bill. 

Capt.  Wescott.  The  seaman's  bill  had  nothing  to  do  with  the 
nativity  or  citizenship  of  the  officers.  The  other  question,  as  Judge 
Hardy  has  stated 

Mr.  Hardy.  I  will  call  your  attention  to  another  statement  he 
made.  Captain:  He  said  he  wanted  the  over-seas  navigation  to  be 
conducted  under  the  same  rule,  as  to  officers  and  men,  that  the 
coastwise  was;  that  he  wanted  no  distinction  between  them. 

Capt.  Wescott.  I  am  well  aware  of  that.  But,  Judge,  I  believe 
you  have  reversed  it.  He  stated  that  he  wanted  to  see  the  coastwise 
trade  conducted  the  same  as  the  over-sea  trade. 

Mr.  Hardy.  Tliat  is  exactly  what  I  have  just  stated.  He  wanted 
no  distinction  between  the  two. 

Capt.  Wescott.  I  know,  but  I  understood  you  to  say  that  he 
stated  he  wanted  the  over-sea  trade  conducted  the  same  as  the  coast- 
wise trade. 

Mr.  Hardy.  Would  not  that  be  the  coastwise  the  same  as  the  over- 
sea? 

Capt.  Wescott.  No.  In  the  over-sea  trade  they  are  permitting 
noncitizcns  at  the  present  time  to  man  such  vessels.  I  want  to  say 
that  between  900  and  a  thousand  of  them  are  acting  as  officers  of  ves- 
sels at  the  present  time. 

Mr.  Hardy.  You  and  I  are  misunderstanding  each  other  entirely. 
Mr.  Hampton  wanted  the  two  placed  under  the  same  regulations. 

Capt.  Wescott.  Certainly,  the  same  regulations. 

Mr.  Saunders.  Which  is  to  be  brought  to  the  other  ? 

Mr.  Hardy.  He  did  not  sa}^  that;  he  said  he  wanted  no  difference 
between  them. 

Ml-.  Saunders.  No,  Capt.  Westcott,  I  think,  stated  what  I  under- 
stood Mr.  Hampton  to  say. 

Ml".  Hardy.  We  wont  argue  about  it. 

Capt.  Wescott.  IMr.  Chairman,  to-day  we  have  dozens  of  ships 
sailing  the  high  seas  with  not  an  American  citizen  on  board  of  them — 
naturalized  or  native-born. 

Mr.  Greene.  And  under  the  American  flag? 

Capt.  Wescott.  I  am  an  American  by  birth;  my  ancestors  before 
me  were  one  of  the  86  of  the  first  famihes  to  settle  in  the  State  of  Rhode 
Island,  and  I  for  one  do  not  believe  it  is  right  or  just  to  permit 
the  honor  of  the  American  flag  to  be  entrusted  to  noncitizens  of  the 
country. 

Ml*.  Burke.  Is  that  true  of  any  ship  except  ships  which  have  been 
recently  placed  under  American  registry  ? 

Capt.  Wescott.  No,  but  there  are  150  of  them. 

Mr.  Burke.  Is  not  the  law  limited  to  a  period  of  two  years  ? 

Capt.  Wescott.  Seven  years. 

Mr.  Greene:  The  law  did  not  limit  it;  that  is  the  time  to  which 
the  President  limited  it. 

Capt.  Wescott.  I  have  heard  remarks  at  different  times  about 
the  British  service,  that  they  permit  this  and  permit  that  in  regard 


710      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

to  the  ofRcers.  I  believe  the  chairman  is  well  acquainted  with  the 
president  of  the  British  Board  of  Trade,  Mr.  Buxton. 

The  Chairman.  He  was  president  of  the  board;  he  is  now  Governor 
General  of  the  Union  of  South  Africa. 

Capt.  Wescott.  Mr.  Buxton  was  president  of  the  board  of  trade 
at  the  time  I  have  in  mind,  and  while  the  members  of  the  British 
Parliament  were  debating  the  question  of  not  permitting  an3"one 
other  than  British  subjects  to  serve  in  the  capacity  as  master  or 
mates  on  British  vessels,  Mr.  Buxton  stated  during  the  debate  that 
by  taking  the  whole  of  the  British  register  throughout  the  world 
they  had  only  87  alien  masters  out  of  7,995  certificates  issued.  And 
I  want  to  say,  Mr.  Chairman,  that  out  of  the  87  masters  at  the  least 
50  of  them  are  now  citizens  of  the  United  States;  I  personally  know 
30  of  them  myself.  There  are  310  other  officers  who  are  not  British 
subjects,  making  a  total  of  397  alien  officers  serving  on  British  ves- 
sels in  the  capacity  of  masters  or  mates.  We  have  only  a  few  ships, 
but  there  are  900  serving  in  the  capacity  of  masters,  mates,  or  engi- 
neers who  are  not  citizens  of  the  United  States. 

The  Chairman.  How  many  of  those  have  declared  their  intention 
to  become  citizens  of  the  United  States  since  the  passage  of  the  bill? 

Capt.  Wescott.  That  would  be  impossible  for  me  to  state,  because 
I  do  not  know.  I  would  liave  to  interview  each  and  every  one  of 
them  separately. 

The  Chairman.  Your  information  is  to  the  effect  that  many  of 
them  have  ? 

Capt.  Wescott.  I  have  no  information  in  regard  to  that  subject. 

Tlie  Chairman.  I  have  heard  statements  made  to  that  effect. 

Capt.  Wescott.  I  won't  say,  Mr.  Chairman.  I  believe  any  white 
man  who  comes  to  this  country  and  declares  his  intentions  of  becom- 
ing a  citizen  in  good  faith,  because  he  likes  our  form  of  government 
and  our  American  institutions,  and  not  for  convenience  sake  as  a 
great  many  do,  are  the  kind  of  citizens  we  want.  And  I  for  one  am 
willing  to  shake  the  hand  of  any  such  man  warmly  and  say  to  him, 
"You  are  just  as  good  an  American  as  I  am,"  but  not  otherwise. 

Mr.  Greene.  I  would  like  to  ask  a  question,  whether  an}"  American 
citizens  competent  to  command  v(»ssels  are  now  in  this  country  who 
are  not  employed  ?  • 

Capt.  Wescott.  We  have  over  350  of  them  on  the  Pacific  coast  to 
my  knowledge. 

Mr.  Greene.  You  would  think  there  would  be  as  many  on  the 
Atlantic  coast  ? 

Ca])t.  Wescott.  I  would  naturally  think  so. 

Mr.  Greene.  More,  would  there  not — it  is  a  longer  coast  ? 

Capt.  Wescott.  I  would  naturally  think  so. 

Mr.  RowE.  They  are  out  of  employment? 

Capt.  Wescott.  They  are  out  of  employment.  I  want  to  say 
when  the  President  issued  the  order  suspending  the  law  for  seven 
years,  there  were  2,136  idle  masters,  mates,  and  engineers  in  the 
United  States  who  would  be  only  too  willing  to  get  a  chance  to  make 
an  honest  living  for  themselves  and  their  families.  I  wrote  a  letter 
to  the  President  to  that  effect,  and  I  also  called  on  Secretary  Sweet, 
and  I  was  almost  given  to  miderstand  it  would  make  no  difference  if 
there  were  10,000  idle. 


SHIPPING  BOARD,  NAVAL  AUXIIJAKV,  AND  MERCHANT  MARINE.      711 

Mr.  Chairman,  my  principal  reason  for  requesting  to  be  heard  was 
that  I  desired  to  substantiate  what  Capt.  Smith  has  stated  to  the 
committee,  which  I  consider  essential;  it  clears  up  many  matters, 
more  so  in  fact  than  anything  else  in  reference  to  the  shipping  bill 
which  has  come  up  before  this  committee. 

The  Chairman.  It  just  emphasizes  another  difficulty  here;  that  is 
all  I  can  see  in  it. 

Capt.  Wescott.  Most  decidedly,  Mr.  Chairman,  it  shows  very 
plainly  that  it  is  almost  impossible  for  any  person  to  make  any  money 
out  of  a  vessel  through  tlie  ownership  of  stock  only;  tliey  must  make 
it  indirectly  throuorh  their  manufactures,  the  same  as  in  England. 

Mr.  Hardy.  I  think  the  most  important  part  of  your  testimony, 
Captain,  is  the  fact  that  on  the  Pacific  coast  our  people  are  following 
the  example  of  England  there  and  subscribing  to  the  stock  with  a 
view  to  the  indirect  benefit. 

Capt.  Wescott.  No;  the  managing  owners  make  them  believe 
that  they  will  receive  large  dividends  if  they  will  only  invest  their 
money  with  them.  Of  course,  in  tlie  coastwise  trade  in  many  cases 
they  receive  a  small  dividend. 

Mr.  Hardy.  You  think  they  fooled  them? 

Capt.  Wescott.  The  managing  owners  are  making  immense 
profits. 

Mr.  Wescott.  Mr.  Chairman,  the  members  of  the  British  Parlia- 
ment, realizing  the  danger  in  the  mattsr  if  permitting  alien  officers  to 
be  employed  on  British  vessels,  expressed  themselves  in  very  emphatic 
terms  during  the  debate  on  an  appropriation  bill,  which  I  respectfully 
request  be  made  a  part  of  the  record  in  order  to  corroborate  the  state- 
ment which  I  have  made  in  reference  to  the  number  of  alien  oflficers 
in  possession  of  British  certificates.  The  debate  on  that  particular 
subject  was  published  verbatim  in  the  Guild  Gazette  February  2,  1914, 
and  reads  as  follows: 

Mr.  Peto.  The  question  of  alien  officers  on  British  ships  is  one  which  undoubtedly 
requires  regulation  at  once.  The  number  of  alien  officers  may  not  seem  very  great. 
We  have  63  alien  masters  and  mates  on  sailing  ships,  and  62  alien  masters  and  272 
alien  officers  on  steamships,  but  1  say  that  under  present  conditions  there  ought  to  be 
none.  Whatever  may  be  necessary  with  regard  to  the  crew,  it  would  be  perfectly 
simple  to  make  it  an  absolute  condition  of  flying  the  British  flag  that  the  ship  should 
be  adequately  officered,  and  officered  by  British  subjects.  The  Admiralty  have 
recently,  and  I  think  very  properly,  taken  steps  to  use  our  merchant  fleet  as  the  eyes 
of  the  navy.  They  have  issued  a  form  to  steamship  owners  asking  them  to  com- 
municate with  their  captains  and  to  arrange  that  in  time  of  \^  ar  information  should  be 
given  as  to  the  character  of  every  vessel  which  is  sighted.  That  may  be  of  enormous 
importance,  but,  considering  that  when  the  pilotage  bill  was  before  the  house,  it  was 
felt  necessary  to  give  special  powers  to  the  Admiralty  to  preclude  alien  officers  who 
hold  the  pilot  cerdficates  from  certain  pilotage  districts,  surely  it  is  equally  necessary 
that  the  board  of  trade  should  collaborate  with  the  Admiralty  in  this  matter  of  alien 
masters.  Pilotage  into  port  is  not  the  only  thing  of  importance  in  the  time  of  a  naval 
war.  It  is  clearly  of  importance  that  the  navy  should  have  immediate  information 
of  foreign  vessels  sighted  in  certain  waters.  Such  information  at  once  communicated 
by  the  right  people  might  be  the  means  of  saving  us  from  naval  disaster,  or  at  any  rate 
of  putting  us  in  a  very  much  better  position  than  if  we  had  not  the  information.  It  is 
not  safe  or  wise  or  in  accordance  with  the  course  taken  by  the  Government  under  the 
pilotage  bill  that  we  should  any  longer  allow  the  flying  of  the  British  flag  by  vessels 
with  alien  masters  and  officers. 

I  have  given  particulars  to  the  right  honorable  gentlemen  especially  of  vessels 
trading  in  the  Mediterranean.  In  one  case  there  was  not  a  single  person  of  English 
nationality  on  board.  The  ownership  was  more  than  suspect,  and  the  officering  and 
manning  of  the  vessel  left  no  possible  doubt  in  anyone's  mind.  It  was  to  all  intents 
and  purposes  a  foreign  vessel,  but  it  was  kept  on  the  British  register  probably  for  the 


712      SHIPPING  BOARD,  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

purpose  of  carrying  on  a  trade  which  a  vessel  belonging  to  a  possible  enemy  power 
would  not  be  able  to  carry  on.  There  is  the  case  of  a  mail  line  of  steamers  carrying 
British  mails  and  enormoiis  numbers  of  passengers.  There  are  19  vessels  of  that  line 
and  there  are  only  10  officers  of  British  nationality  altogether.  It  is  simply  a  que.-'tion 
of  pay  and  nothing  else.  They  will  not  pay  the  standard  rate  for  British  officers,  and 
they  therefore  have  men  whose  names  show  the  nationality  to  which  they  belong. 
I  do  not  know  whether  I  called  the  attention  of  the  president  of  the  board  of  trade  to 
the  case  of  the  steamship  Calvados,  which  went  ashore  in  March  last,  and  in  which 
there  was  great  loss  of  life.  The  life-sa^-ing  apparatus  was  absolutely  inadequate,  and 
the  court  made  the  strongest  statement  to  the  board  of  trade.  I  should  like  to  read 
a  line  or  two  of  the  finding  of  the  court: 

"The  court  desired  specially  to  direct  the  attention  of  the  board  of  trade  to  the  want 
of  certificated  officers  on  board  a  ship  flying  the  British  flag,  and  to  the  fact  that  the 
court  was  unable  to  deal  with  masters  or  mates  of  foreign  nationality,  owing  to  ex- 
territorial jurisdiction  in  this  country.  They  also  desired  to  direct  the  attention 
of  the  board  of  trade  to  the  insufficiency  of  the  means  of  saving  life  existing  on  board." 

That  is  the  case  of  the  steamship  Calvados,  the  inquiry  into  which  was  held  on  10th 
and  11th  March  last.  A  number  of  the  passengers  and  crew  were  frozen  to  death,  and 
a  great  many  others  were  drowned. 

Sir  Gilbert  Parker.  There  is  another  point  which  my  honorable  friend  brought 
up,  and  that  is  the  emplovTnent  of  alien  shipmasters  in  our  merchant  service.  The 
president  of  the  board  of  trade  may  have  some  ground  for  complaint.  He  may  say  that 
when  this  bill  was  on  upstairs  this  question  ought  to  have  been  adequately  dealt  with. 
I  think  all  of  us  who  were  on  that  committee  are  somewhat  to  blame  for  not  pushing  tliis 
question  as  they  pushed  the  question  of  the  aUen  pilots.  I  must  take  my  share  of  that 
responsibility,  but  there  are  difficulties  in  the  case.  It  would  be  a  very  dangerous  and 
difficult  tiling  for  the  Government,  if  it  had  the  power,  to  say  that  no  aUen  shipmaster 
should  be  employed  on  British  ships  or  on  ships  which  fly  the  British  flag.  It  would 
raise  very  serious  international  questions.  For  instance,  we  have  got  steamship  lines 
between  the  United  States  and  this  countr>'  which  fly  the  British  flag  behind  wliich  is 
British  money,  but  behind  which  also  is  American  money,  and  they  are  practically 
American  liners.  In  the  same  way  with  the  cross-channel  traffic.  It  would  be  an 
exceedingly  difficult  thing  for  the  Government  to  insist  that  there  should  be  no  alien 
shipmasters  upon  lines  of  that  sort.  My  honorable  friend  mentioned  a  line  running 
from  Smyrna  and  the  Asia  Minor  ports  to  Alexandria  and  also  Constantinople.  There, 
again,  it  is  a  very  serious  question.  I  have  thought  much  of  it,  and  I  always  find  great 
difficulty.  It  would  be  a  very  hard  thing  for  this  Government  to  prevent  the  Egj^ptian 
Government,  who,  naturally,  want  to  do  as  well  as  they  can  by  their  Egyptian  citizens, 
from  becoming  officers  on  ships  that  fly  the  British  flag.  It  is  a  situation  that  I  do  not 
see  the  way  out  of  at  a  moment's  notice,  nor  do  I  see  a  way  out  of  the  situation  which 
would  be  created  were  we  to  say  that  none  but  British  officers  should  be  employed  on 
those  lines  of  steamers  running'between  the  United  States  and  this  country,  but  my 
honorable  friend  has  shown  the  way  out. 

He  has  said  that  under  the  pilotage  act  the  question  of  alien  pilots  was  raised, 
apd  the  president  of  the  board  of  trade  had  great  difficulty,  which,  however,  he  sur- 
mounted, because  it  was  an  international  question  as  this  is  an  international  question, 
of  great  gravity.  He  was  able  to  secure  that  the  Admiralty  should  be  the  final  arbiter 
in  regard  to  the  employment  of  alien  pilots.  That,  I  think,  was  a  very  wise  arrange- 
ment securing  the  national  interests,  but  also  preventing  international  difficulties. 
This,  undoubtedly,  is  a  grievance.  I  think  there  is  as  much  danger  in  having  alien 
shipmasters  working  our  waters  as  alien  pilots,  and,  if  it  were  possible,  the  president 
of  the  board  of  trade  ought  to  possess  himself  of  the  same  powers  as  he  secured  under 
the  pilotage  act  lately  passed  in  this  house.  I  am  saying  this  with  no  little  sense  of 
the  gravity  of  the  situation,  because  I  understand  how  great  are  the  difficulties  of 
the  department  over  which  the  right  honorable  gentleman  rules,  but  I  am  absolutely 
certain  that  when  there  is  a  question  so  grave  to  our  national  interests  as  this  is  every 
attempt  should  be  made  by  tlie  Government  to  alter  the  conditions  in  some  way — 
if  not  by  legislation  by  Such  agreement  as  the  president  of  the  board  of  trade  might 
be  able  to  make.  I  beg  the  president  of  the  board  of  trade  to  consider  very  carefully 
the  situation  which  hesays  exists,  and  to  deal  with  it  not  Avith  the  idea  of  getting  rid 
of  a  parliamentary  difficulty,  but  of  doing  a  real  national  dutv. 

Mr.  Shirley  Benn.  There  are  one  or  two  points  in  connection  with  alien  captains 
to  which  I  -svish  to  refer.  I  may  be  told  that  the  president  of  the  board  of  trade  has 
strong  views  on  the  subject  and  agrees  with  me,  but  that  he  has  not  got  the  power  to 
deal  with  it.  I  should,  however,  like  to  suggest  one  or  two  methods  by  which  he  could 
ta'ce  action.  There  is  nothing  more  dangerous  to  our  commerce  than  having  foreiga 
captains  on  British  vessels.    There  is  no  telling  in  case  of  war  what  wrongful  com- 


SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      713 

municatione  British  ships  oflBcered  by  foreigners  might  not  make  to  our  naval  authori- 
tie.^. 

Thoy  are  allowed,  where  they  have  pilotage  certificates,  to  bring  their  vessels  into 
British  ports,  althougli  fortunately,  under  the  new  pilotage  act,  they  are  not  allowed  to 
bring  their  shi])s  into  the  Thames,  the  Harwich,  the  Humber,  or  the  Grimsby  pilot  dis- 
tricts. But  if  the  board  of  trade  would  take  counsel  with  the  admiralty  and  arrange 
that  no  foreigner  should  in  any  circumstances,  whether  he  had  a  certificate  as  a  Brit- 
ish master  or  a  pilotage  certificate,  be  allowed  to  navigate  any  ship  into  a  British 
harbor,  I  believe  that  it  would  be  an  extremely  good  thing,  not  only  for  this  country, 
but  for  our  pilotage  and  our  commerce.  More  dangerous"  even  than  tliis  is  the  per- 
mission given  to  employ  captains  with  alien  certificates  on  British  ships  which  do 
not  come  to  our  home  ports.  British  law  is  supposed  to  be  supreme  on  3very  British 
ship,  but  the  man  who  executes  it  is  frequently  not  a  Britisher.  I  had  a  case  a  good 
many  years  ago,  in  Mobile,  Ala.,  Avhere  a  British  steamer  came  in  and  the  captain 
signed  on  a  new  crew.  I  asked  liim  for  his  certificate.  He  said,  "I  have  not  got  to 
show  you  my  certificate;  I  am  not  an  Englishman,  I  am  a  foreigner."  I  said,  "I 
have  got  your  paper  and  yiur  ship  will  not  leave  tliis  port  antil  I  either  see  your'cer- 
tificate  or  get  instructions  from  a  higher  authority  than  I  ami'  He  said,  "This  mat- 
ter was  tried  out  in  New  Orleans  and  the  consul  there  was  told  that  it  is  not  necessary 
for  him  to  see  my  certificate.  He  could  not  indorse  it  and  he  could  not  cancel  it." 
For  a  day  I  held  the  shin,  when  I  got  instructions  to  let  the  captain  go  without  my 
seeing  the  certificate.  The  crew  had  been  signed  on  at  the  British  consulate,  and 
the  captain  was  not  subject  to  British  law. 

1  should  like  to  suggest  to  the  pre.^ident  of  the  board  of  trade  that  he  should  issue 
a  reirulation  that  no  consular  officer  should  ever  give  up  the  pipers  of  a  British  steamer 
until  he  had  .seen  the  certificate  of  the  captain  "and  satisfied  himself  that  the  captain 
was  a  fit  and  prop':'r  person  to  command  a  British  vessel.  I  would  go  further  and  say 
that  we  ought  not  to  allow  any  foi-eigner  ever  to  raise  a  British  flag  on  a  British  vessel, 
and  that  every  captain  of  a  13ritish  vessel  should  have  to  enter  on  the  ship  a  larger 
number  of  British  sailors  than  of  foreigners.  There  is  one  other  point  in  connection 
with  the  steamer  ('(ilrarh.i  to  which  my  honorable  friend,  the  member  for  Devizes, 
referred  a  short  time  ago.  That  vessel,  which  was  lost,  sailed  from  Constantinople 
with  a  Greek  who  had  a  Turkish  certificate,  with  a  chief  officer  who  was  a  purser, 
and  a  boatswain  who  was  a  second  officer.  They  had  a  crew  of  14  hands  and  120 
passengers  on  board,  with  boat  accommodation  for  only  40.  The  board  of  trade  had 
an  inquiry,  which  was  held  on  the  10th  and  lUh  of  March,  and  I  should  like  to  ask  the 
president  if  he  intends  to  take  any  steps  against  the  British  owner  of  that  vessel  for 
ha^^ng  failed  to  provide  the  nece.si^iry  boats.  It  seems  to  me  that  something  should 
be  done  in  the  matter.  I  hop3  that  the  president  of  the  board  of  trade  will  give  very 
great  consideration  to  this  question  of  foreign  captains  commanding  our  British  ves- 
sels and  coming  into  our  British  ports,  and  that  he  will,  if  he  finds  it  possible,  take 
whatever  steps  he  can  to  prevent  these  British  steamers  officered  by  foreigners  from 
using  the  British  consular  offices. 

Mr.  Butcher.  I  wish  to  emphasize  some  of  the  points  in  relation  to  the  mercantile 
marine  which  have  been  raised  by  my  honorable  friend  beside  me.  The  first  is  the 
question  of  alien  masters  and  officers  in  command  of  British  ships.  It  reallj^  does  seem 
an  abuse  in  itself  that  British  ships,  enjoying  the  privileges  of  British  law  and  registra- 
tion at  a  Briti.'^h  port,  should  be  in  the  position  that  the  master  and  every  officer  on 
board  may  be  an  alien;  that  is,  according  to  the  present  state  of  the  law,  possible. 
In  the  case  just  referred  to,  that  of  the  Calvados,  she  was  officered  by  aliens,  and  met 
with  this  disaster.  Apparently  questions  were  asked,  but  there  was  no  help  for  it, 
according  to  the  present  law,  so  I  am  told.  Not  only  is  it  an  abuse  in  itself  that  it 
should  be  so,  but  it  is  a  danger,  espocially  in  war  time.  We  know  that  in  war  time 
confidential  information  has  to  be  given  to  the  masters  of  British  ships,  and  it  hardly 
needs  any  comment  to  show  what  the  position  ^v«ruld  be  if  the  masters  who  get  that 
confidential  information  were  foreigners  who  could  give  it  to  our  enemies.  I  do  hcpe 
that  is  a  matter  which  the  president  of  the  board  of  trade  will  take  into  consideration 
and  deal  with.  Then  there  is  the  question  of  the  manning  of  British  ships  by  for- 
eigners. Cases  have  been  referred  to  in  "this  house,  in  which  British  ships  have  been 
manned  entirely  by  foreigners,  not  a  single  man  of  British  extraction  being  on  board 
any  of  them.  Surely  that  can  not  be  right.  The  president  of  the  board  of  trade  was 
asked  a  question  about  it  in  the  house  not  very  long  ago,  and  he  gave  an  answer  from 
which  I  gather  that  he  is  entirely  in  sympathy  with  the  view  that  some  restriction 
should  be  placed  on  the  manning  of  British  ships  entirely  by  foreigners.  My  hon- 
orable friend,  the  member  for  Devizes  [Mr.  Peto],  referred  to  the  case  of  a  ship  which 


714      SHIPPING  BOARD,  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

went  out  manned  entirely  by  foreigners,  and  he  asked  the  president  of  the  board  of 
trade  the  following  question: 

"  Will  the  honorable  gentleman  take  some  steps  to  put  a  stop  to  this  national  scandal 
of  ships  being  allowed  to  fly  the  British  flag  officered  and  manned  entu-ely  by  aliens?" 

The  president  of  the  board  »f  trade  replied: 

"This  raises  a  very  large  legal  question.  I  am  somewhat  in  sympathy  with  the 
honorable  member's  views,  but  do  not  think  it  can  be  raised  alone  in  reference  to  the 
question." 

I  hope  the  right  honorable  gentleman  will  give  some  practical  proof  of  his  sympathy 
in  this  matter. 

j\Ir.  Shirley  Benn.  Wha,t  other  nations  admit  British  captains'* 

Mr.  Buxton.  I  can  not  say  offhand.  I  will  look  it  up.  At  all  events,  the  figures 
I  want  to  give  are  really  an  answer  to  all  these  complaints.  Taking  the  whole  of  the 
British  register  throughout  the  world  there  are  at  present  7,995  masters,  of  whom 
only  87  are  aliens — a  percentage  of  over  just  1  percent.  I  really  think,  under  these 
circumstances,  it  would  be  rather  a  large  thing  to  ask  that  we  should  undertake  a 
difficult  international  question  for  such  a  small  percentage  as  that. 

(Thereupon,  at  12  o'clock  noon,  the  committee  adjourned  until 
Tuesday  morning,  March  7,  1916,  at  10.30  o'clock  a.  am.) 


Committee  on  Merchaxt  Marine  and  Fisheries, 

House  of  Representatives, 

WasMngton,  D.  C,  Tuesday,  March  7,  1916. 

The  committee  met  at  10.15  o'clock  a.  m.,  Hon.  Joshua  W.  Alex- 
ander (chairman)  presiding. 

The  Chairman.  Capt.  Smith,  who  appeared  before  us  last  Satur- 
day, desires  to  make  a  further  statement  in  connection  with  the  bill. 
He  is  a  large  farmer  and  is  affiliated  with  the  farmers'  organizations. 

STATEMENT  OF  CAPT.  W.  S.  A.  SMITH,  EXPERT  IN  FARM 
PRACTICE,  UNITED  STATES  DEPARTMENT  OF  AGRICUL- 
TURE. 

Capt.  Smith.  Mi".  Chairman,  the  last  time  I  was  up  here,  in  speak- 
ing of  the  methods  which  are  used  in  England  to  encourage  shipping, 
I  f(>lt  I  had  left  it  unfinished,  and  that  it  might  appear  that  those 
methods  which  they  used  woidd  be  against  this  country  in  any  way 
going  into  shipping.  On  the  contrary,  I  am  very  much  in  favor  of 
the  shipping  bill,  and  I  just  wanted  to  add  a  few  more  items  that  I 
thought  might  have  a  little  interest. 

Shipping  is  very  spasmodic  in  its  profits.  There  are  periods  of 
years  which  elapse  when  the  stockholders  receive  little  or  no  profits 
and  the  shipbuilding  yards  have  hard  work  to  keep  their  plants 
running.  Tlien  follows  a  period  of  years  in  which  shipbuilding  pays 
well,  and  it  is  during  this  period  that  new  companies  are  formed  and 
new  stockholders  are  taken  in. 

In  periods  of  depression  many  of  the  large  shipbuilding  firms  in 
England,  in  order  to  keep  their  plants  running,  will  often  start  from 
four  to  six  ships  and  build  the  hulls,  waiting  for  a  customer  to  buy 
before  finishing,  so  that  the  vessel  when  finished  may  meet  the 
requirements  of  the  customer  and  can  be  finished  in  a  hurry.  In  the 
case  of  tramp  steamers,  there  is  little  variance  in  the  hull. 

When  ship  subsidy  was  started  in  France  it  came  at  a  time  when 
freights  were  fairly  low,  and  the  French  nation  did  not  respond  very 
readily.     The  orders  for  ships  from    the  British  sliipbuLlders  being 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      715 

also  slack,  the  conscquonco  was  that  he  went  to  France  to  a  shipowner 
and  said:  "We  have  from  four  to  six  ships  on  the  stocks  partly 
finished  which  we  will  sell  you  at  cost,  and  we  will  take  25  per  cent 
of  the  stock  in  payment,  because  the  ship  subsidy  which  your  country 
pays  will  enable  you  to  make  a  profit  over  any  British  tramp,  and  it 
will  also  allow  us  to  clear  our  shipbuilding  yards  and  keep  our  plants 

f3ing  until  timrs  improve."  On  this  basis  a  large  percentage  of 
rench  tramp  steamers  and  sailing  vessels  were  built  on  the  Clyde 
for  French  owners.  And  so  you  find  vessels  owned  to-da}^  by  British 
shipbuilders  and  French  investors. 

Xliis  pv'cuUar  interlocking  that  England  has  applies  not  only  in 
EnglaiKl  but  to  the  other  countries  in  wliich  they  do  business.  As, 
for  instance,  a  shipowner  when  his  steamer  is  chartered  will  see  to  it 
that  wIku  they  have  a  ship  coming  back  it  will  be  consigned  to  a 
firm  in  England,  so  that  they  receive  a  fee  for  collecting  the  freight 
and  everything  else  and  it  brings  in  business.  And  I  was  afraid  the 
last  day  I  was  up  here  I  mij^ht  have  left  the  impression  that  so  strong 
was  that  hold  in  England  it  would  be  impossible  for  this  country  to 
get  in.  But  this  thing  works  both  ways,  because  if  we  start  shipping 
in  this  country,  any  shipowner  w'dl  naturally  see  that  his  shipping 
and  his  business  is  done  with  people  in  fon^ign  countries  who  will  give 
him  business  in  retui'ii.  So  that  this  is  not  a  thing  to  be  afraid  of  in 
any  way.  This  interlocking  that  they  have  in  England  is  something 
that  would  com<'  to  us  when  we  once  started  shipping  here. 

In  all  the  talk  about  the  cost  of  labor  and  operating  iVmerican- 
owncd  sliips,  it  is  well  to  bear  in  mind  what  has  happened  in  the  last 
40  yeai*s.  My  firet  voyage  in  command  I  had  command  of  a  ship 
of  1,150  tons,  which  carried  1,500  tons  dead-weight  with  a  crew  of 
32  men.  To-day,  with  a  crew  of  32  men,  it  is  possible  to  carry  5,000 
tons  instead  of  1,500  tons.  And  with  the  change  that  is  now  going 
on,  changing  from  steam  to  oil,  and  with  the  knowledge  that  the  great- 
est expc  use  of  a  steamer  is  in  the  engine  room,  the  labor  question  will 
decrease  every  year,  as  the  carrying  capacity  of  these  vessels  in- 
creases and  as  the  cost  of  the  engine  room  decreases.  So  that  I  do 
not  feel  that  we  should  look  at  labor  as  it  is  now,  but  as  to  what  it 
will  be  when  we  utilize  these  newer  ships. 

Speaking  of  the  impression  that  is  among  the  farmers  in  the  West 
in  regard  to  the  shipping  bill,  there  is  one  point  I  am  afraid  on  which 
there  has  been  a  good  deal  of  misapprehension,  and  that  is  this: 
The\'  have  the  impression  out  there  that  j^ou  are  now  trying  to  put 
in  a  bill  that  will  provide  for  ships  enough  to  carry  all  of  the  American 
products.  As  a  matter  of  fact,  this  bill  only  calls  for  $50,000,000, 
which,  at  most,  will  only  build  150  to  200  ships,  which  will  smiply 
relieve  the  congestion.  Because  with  the  number  of  vessels  that 
have  been  lost  in  this  war,  and  the  number  of  vessels  that  will  be  lost 
in  this  war,  200  ships  is  merely  relief.  But  the  impression  has  gained 
ground  all  over  the  West  that  3^ou  are  going  to  attempt  to  carry  all 
American  products  in  American  bottoms.  The  200  ships  that  this 
bill  would  build  at  the  very  most,  as  I  say,  would  be  a  very  small 
thing.  I  cpiito  realize  that  when  this  war  is  over  there  will  be  a  great 
attempt  to  build  up  the  foreign  shipping  again.  But  there  is  a  great 
question  whether  there  will  be  much  loose  capital  floating  around  to 
invest  in  shipping  over  there  after  the  war  as  there  was  before  the  war. 


716      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

One  more  point,  gentlemen,  as  to  how  the  farmer  feels  on  this 
shipping  bill.  Ten  or  12  years  ago,  when  corn  be^an  to  go  up  in  the 
Middle  West  and  live  stock  went  up  in  the  MidcUe  West,  and  lands 
naturally  followed,  we  had  good  prices.  But  just  when  it  got  to  its 
height  the  consumer  came  in  and  said,  "The  cost  of  living  is  too  hi^h." 
The  consequence  was  that  the  tariff  was  taken  off  of  beef  and  beef 
began  coming  in  from  South  America,  and  the  tariff  was  taken  off 
of  grain  and  grain  came  in  from  South  America  and  Canada.  It  was 
figured  on  this  basis  that  Congress  in  its  wisdom  said  that  we  could 
not  afford  to  protect  the  corn-belt  States  at  the  cost  of  the  Nation. 
The  consequence  was  that  if  tl^  war  had  not  broken  out  there  would 
have  been  a  very  large  business  in  foreign  boef  and  a  very  large  busi- 
ness in  foreign  grain,  which  would  have  seriously  affected  the  farmer. 
Now  the  fanner  had  to  take  his  medicine. 

I  quite  realize  m  this  shippuig  bill  that  the  shipping  men  all  up  and 
down  the  coast  naturally  are  opposed  to  any  change  in  the  shipping 
law  which  will  interfere  with  their  business.  I  do  not  blame  them 
for  that  one  bit;  but  the  farmers  in  the  West  feel  if  it  is  to  be  looked 
at  from  the  national  pomt  of  view,  so  far  as  their  protection  goes, 
the  shipphig  mdustry  should  also  be  looked  at  from  the  national 
pouit  01  view. 

The  other  day  when  I  was  up  here,  I  was  asked  the  question  if  I  was 
opposed  to  Government  ownership,  aid  I  qualified  my  answer  by 
stathig,  if  I  recollect  right,  that  this  bill  did  not  call  for  Government 
ownership;  but  I  also  stated  at  that  time  that  I  would  not  care  to 
own  the  stock  m  a  ship.  I  would  like  to  explain  one  word  more. 
I  had  been  talking  all  through  my  statement  simply  from  a  stock 
proposition.  I  am  not  opposed  to  Government  ships;  I  am  not  op- 
posed to  anything  that  will  give  us  a  start  in  the  merchant  marine. 
I  was  simply  speaking  there,  looking  at  it  from  a  stock  proposition 
alone.  It  is  quite  possible  and  very  probable  after  these  high  rates 
of  freight  are  over,  that  these  vessels  may  not  pay  any  large  dividends; 
but  we  can  well  afford  to  have  these  vessels,  even  if  they  are  run  at  a 
small  loss  for  the  benefit  that  they  would  do  as  a  whole. 

Mr.  Greene.  I  would  like  to  ask  you  a  question  ? 

Capt.  Smith.  Yes,  sir. 

]VIr.  Greene.  How  do  you  figure  200  ships  could  be  built  with 
$50,000,000? 

Capt.  Smith.  I  do  not  pretend  to  make  that  as  an  absolute  state- 
ment.    I  meant  that  was  the  very  most  that  could  be  built. 

Mr.  Greene.  I  know,  but  how  could  you  build  at  the  very  most 
200  ships  with  $50,000,000  ? 

Capt.  Smith.  Would  not  that  be  $250,000  a  ship  ? 

Mr.  Curry.  Yes. 

Capt.  Smith.  Is  that  unreasonable  ? 

Mr.  Greene.  I  asked  you.  You  are  a  marine  man;  I  am  not  a 
marine  man.  I  want  to  get  that  information.  You  claim  to  be 
acquainted  with  marine  matters  and  have  sailed  on  the  sea,  and  I 
want  to  know  how  you  figure  out  200  vessels  suitable  to  go  across  the 
ocean  could  be  built  for  $50,000,000. 

Mr,  Loud.  The  naval  colliers  cost  something  over  $1,000,000 
apiece. 

Capt.  Smith.  That,  Mr.  Congressman — I  simply  made  the  broad 
statement — strengthens  the  point  I  tried  to  bring  out.     If  you  can 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      7 17 

only  build  50,  it  is  still  further  in  favor  of  the  ])ill,  because  it  will 
relieve  the  congestion  and  will  not  be  a  menace. 

Mr.  Greene.  You  have  stated  this  bill  is  not  a  Governmont- 
ownership  bill.     What  do  you  call  it? 

Capt.  Smith.  I  beg  pardon. 

Mr.  Greene.  You  have  stated  this  bill  is  not  a  Government- 
ownership  bill.     What  kind  of  a  bill  do  you  call  it? 

Capt.  Smith.  It  does  not  provide  absolutely  for  Government  own- 
ership.    It  leaves  it  open  so  that  those  ships  can  be  sold. 

The  Chairman.  And  chartered.  In  fact,  that  is  the  primary 
purpose,  is  it  not,  under  the  bill  ? 

Capt.  Smith.  Yes,  sir;  as  I  understand  it. 

Mr.  Greene.  But  the  Government  furnishes  the  capital,  provided 
the  other  people  do  not. 

Capt.  Smith.  Yes,  sir, 

Mr.  Greene.  According  to  your  statement,  when  you  testified  a 
few  days  ago,  there  was  not  much  possibility  of  private  individuals 
going  into  the  venture  in  this  country.  Consequently,  the  Govern- 
ment would  have  to  furnish  the  capital,  would  it  not  ? 

Capt.  Smith.  Yes,  sir.  •*- 

Mr.  Greene.  And  if  you  are  going  to  build  200  ships  the  $50,000,- 
000  would  not  touch  it  ? 

The  Chairman.  $50,000,000  prior  to  the  war  would  have  built 
200  cargo  ships  of  5,000  tons  ^ross  burden. 

Mr.  Greene.  If  you  arc  talking  about  sailing  vessels,  that  is  all 
right. 

The  Chairman.  No,  not  sailing  vessels;  steamers.  They  could  be 
built  for  an  average  of  $35  a  gross  ton,  and,  in  some  instances,  less. 

Capt.  Smith.  That  is  the  idea. 

Mr.  Greene.  Of  course,  we  have  to  face  the  situation  as  it  is  to-day. 

The  Chairman.  To-day  we  could  not  touch  it.  We  all  agree  to 
that.  I  was  talking  of  the  situation  before  the  war.  It  would  be 
unwise  to  build  ships  at  the  present  time. 

Capt.  Smith.  As  I  understand,  it  does  not  stipulate  in  the  bill  that 
this  $50,000,000  has  all  got  to  be  spent  at  once. 

The  Chairman.  Oh,  no;  it  would  be  very  unwise  to  build  ships  at 
the  present  prices,  I  admit. 

Capt.  Smith.  Exactly.  I  understand  that.  It  was  simply  to  get  a 
start. 

Mr.  Loud.  May  I  make  a  suggestion  here,  that  the  small  coUiers 
which  the  Navy  bought  about  three  years  before  the  war,  carrying 
6,200  tons  of  coal,  cost  a  little  over  $600,000  apiece. 

The  Chairman.  Oh,  yes;  they  paid  good  round  prices  for  them. 

Mr.  Loud.  There  was  a  great  deal  of  competition  in  the  bidding  for 
those  boats. 

The  Chairman.  Apparently  so;  yes. 

Mr.  Curry.  I  think  before  the  war  a  5,000-ton  boat  could  be 
bought  for  $250,000.     At  the  present  time  it  is  worth  $1,000,000. 

The  Chairman.  Oh,  yes;  you  can  not  figure  on  the  conditions  that 
exist  to-day;  they  are  abnormal. 

Mr.  Hardy.  I  understand  the  Government  could  sell  its  Panama 
ships,  or  some  of  the  ships  they  bought  for  the  Spanish  War,  for  more 
than  they  gave  for  them. 

32910—10 46 


718      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

The  Chairman.  I  know  our  colleague,  Mr.  Loud,  has  given  consid- 
erable study  to  this  question,  and  I  agree  with  him  that  this  would 
be  a  good  time  to  clean  up  those  old  ships. 

Mr.  Loud.  Would  not  this  be  a  good  place  to  inject  hito  the  record 
the  statement  I  showed  you  the  other  day? 

The  Chairman.  I  think  so,  as  soon  as  Capt.  Smith  concludes. 

Capt.  Smith.  That  is  practically  all  I  had  to  say,  Mr.  Chairman. 

Mr.  Curry.  I  would  like  to  ask  you  what  you  think  of  the  Harter 
Act,  as  to  the  limitation  of  liability? 

Capt.  Smith.  I  do  not  believe  I  am  capable  of  answering  that. 

Mr.  Curry.  I  understood  you  were  an  expert  on  shipping. 

Capt.  Smith.  No,  sir.     I  do  not  pretend  to  be. 

Mr.  Loud.  Mr.  Chairman,  I  will  insert  at  this  point  this  statement 
I  showed  you  a  few  days  ago,  which  I  think  will  be  of  interest  to  the 
committee. 

Mr.  Greene.  What  is  the  nature  of  it? 

Mr.  Loud.  It  is  a  criticism  of  the  holding  in  the  Navy  organization 
of  the  old  colliers  that  are  antiq^uated,  and  suggesting  that  they 
should  be  sold  now  while  large  prices  can  be  realized  for  them,  and 
that  money  invested  in  new  and  modern  ships  for  the  Navy.  I  show 
here  that  out  of  53  auxiUary  ships,  30  of  them  are  old  and  antiquated 
craft,  averaging  25  years  of  age.  And  as  a  busmess  proposition, 
those  ships  should  be  sold  while  we  can  get  enormous  prices  for  them 
and  replaced  with  modern,  large-capacity  ships  that  are  better  fitted 
for  the  service  of  the  Navy. 

(The  statement  offered  by  Mr.  Loud  is  as  follows :) 

NAVAL   AUXILIARIES. 

By  looking. over  the  list  of  ships  in  actual  service  of  the  Navy,  we  find  that  there 
are  53  auxiliary  ships,  of  which  25  are  piven  as  colliers  and  28  as  tenders,  supply  ships, 
special  types,  and  hosjntal  ships.  While  14  of  the  colliers  and  9  of  the  other  ships  are 
of  modern  construction,  we  find  that  there  are  30  of  these  auxiliaries  18  years  and  over, 
most  of  them  ])urchased  during  the  Spanish-American  "War,  and  which  are  of  small 
tonnage,  expensive  to  o])erate,  and  ill  fitted  for  the  service  for  which  they  are  used 

It  would  seem  to  any  business  man  or  any  person  of  reasonable  judgment  that  now, 
while  vessels  are  selling  for  three  or  four  times  their  normal  value,  would  be  a  golden 
opportunity  to  sell  these  old  ships  which  are  nearly  ready  for  the  scrap  pile  and  replace 
them  with  new,  up-to-date  construction.  As  a  concrete  example  of  what  this  means 
we  find  that  the  collier  Justin,  which  was  piu-chased  during  the  Spanish-American 
War,  was  built  in  1891  and  is  now  25  years  old.  This  ship  was  recently  sold;  the  price 
paid  18  years  ago  for  this  ship  was  $145,000  and  when  discarded  it  was  valued  at 
$75,000.  It  was  recently  sold  under  sealed  bid  and  the  Government  received  for  this 
old  craft  $301,070. 

One  would  presume  that  every  naval  officer  who  has  had  anything  to  do  with  these 
auxiliary  ships  is  well  aware  that  these  obsolete  ships  should  be  gotten  rid  of,  but 
naval  officers  are  not  business  men,  and  no  one  thinks  it  is  his  particular  business  to 
suggest  or  urge  the  matter,  whereas  it  would  be  greatly  to  the  interest  of  the  Xavy  to 
replace  these  old  colliers  with  the  accepted  type  of  modern  naval  collier  which  have 
19,3G0  tons  displacement,  and  carries  12,500  tons  of  coal,  with  14-knot  speed. 

Of  the  15  Army  tran.sports,  only  one  of  which  is  of  modern  construction,  the  other 
14  ranging  from  22  to  42  years,  the  average  age  over  29  years.  The  life  of  the  ordinary 
steel  ship  is  generally  considered  as  20  years,  so  it  A^-ill  be  readily  understood  that  14 
out  of  15  transports  are  ready  for  the  scrap  pile  and  should  be  sold  at  once  while  there 
is  a  golden  opportunity  to  do  so,  and  thus  realize  three  or  four  times  their  normal 
value,  owing  to  the  scarcity  of  commercial  tonnage. 

(These  are  18  to  41  years  old.     Average  age  of  these  30  old  ships  is  25.7  years.) 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      719 

Mr.  Curry.  I  would  also  like  to  insert  this  clipping,  which  I  have 
taken  from  the  newspaper. 

(The  cUpping  referred  to  is  as  follows:) 

[Special  to  the  Christian  Science  Monitor.] 
TRADE    PROPOSALS    OP   GLASGOW   MERCHANTS. 

Glasgow,  Scotland,  February  28,  1916. 

The  Glasgow  <  'hamber  of  Commerce  at  its  last  meeting  unanimously  passed  the 
folio wang  resolutions: 

"(1)  That  the  Government  be  urged  to  take  immediate  steps  for  the  establishment 
of  a  department  of  commerce  and  industry  and  the  appointment  of  a  minieter  of 
commerce  with  cabinet  rank,  in  order  that  the  manufacturing  and  commercial  inter- 
ests of  the  British  Empire  may  be  in  future  effectively  promoted  and  safeguarded. 

"(2)  That  the  Government  take  immediate  steps  to  consult  the  governments  of 
the  dominions  overseas  and  ascertain  (a)  their  views  in  regard  to  the  various  trade 
problems  arising  as  the  result  of  the  war  and  (b)  the  regulation  of  trade  relations  with 
enemy  countries,  and  the  control  of  businesses  in  the  colonies  managed  or  owned 
by  subjects  of  enemy  countries,  it  being  important  that  then:  views  be  first  obtained 
before  any  definite  steps  are  taken  by  this  country. 

"(3)  That  the  Government  be  urged  to  inquire  into  the  desirability  of  subsidizing 
or  otherwise  protecting  for  a  period  those  industries  in  this  country  which  since  the 
beginning  of  the  war  have  been  producing  commodities  formerly  obtained  from  enemy 
countries. 

"(4)  That  the  question  of  preferential  reciprocal  trading  relations  between  all  parts 
of  the  British  Empire,  reciprocal  trading  relations  between  the  British  Empire  and 
allied  countries,  the  favorable  treatment  of  neutral  countries,  and  the  regulation,  by 
tariffs  or  otherwise,  of  trade  relations  with  er?my  countries,  be  considered  by  the 
Government,  and  steps  taken  to  render  impossible  return  to  pre-war  conditions." 

The  other  points  taken  up  deal  with  harbor  facilities  and  shipping  dues;  pilotage 
certificates;  commercial  establishments  used  as  political  agencies;  stricter  naturali- 
zation laws;  reorganization  of  the  consular  service;  and  revision  and  improvement 
of  the  present  banking  system. 

(Thereupon,  at  10.45  o'clock  a.  m.,  the  hearing  was  adjourned  until 
to-morrow,  Wednesday,  March  8,  1916,  at  10.30  o'clock  a.  m.) 


CREATING  A  SHIPPING  BOARD,  A  NAVAL  AUXILIARY,  AND  A 
MERCHANT  MARINE. 


Committee  on  Merchant  Marine  and  Fisheries, 

House  of  Representatives, 

Wednesday,  March  8,  1916. 
The  committee  met  at  10.30  o'clock  a.  m.,  Hon.  Joshua  W.  Alex- 
ander (chairman)  presiding. 

The  Chairman.  Mr.  W.  E.  Humphrey,  of  Washington,  is  present 
this  morning  and  desires  to  be  heard  on  this  bill.  Of  course  the  older 
members  of  the  committee  will  remember  that  Mr.  Humphrey  was  a 
member  of  this  committee  for  a  number  of  years,  until  the  Sixty- 
third  Congress,  as  I  recoUect. 

STATEMENT  OF  HON.  WILLIAM  E.  HUMPHREY,  A  REPRESENT- 
ATIVE IN  CONGRESS  FROM  THE  STATE  OF  WASHINGTON. 

Mr.  Humphrey.  Mr.  Chairman  and  members  of  the  committee,  I 
first  want  to  thank  you  for  the  opportunity  of  coming  here  and  talk- 
ing in  this  room  where  I  have  spent  so  many  days  in  times  gone  by. 
I  am  appearing  here  this  mornmg  rather  as  a  matter  of  duty  than 
with  a  hope  that  I  may  accomplish  anything  so  far  as  the  defeat  of 
this  biU  is  concerned.  In  saying  that,  I  say  it  with  aU  kindness,  f  or 
I  have  sat  face  to  face  with  a  good  many  of  the  gentlemen  around 
this  board,  and  we  have  differed  a  great  many  times,  too,  but  I  have 
never  lost  any  respect  for  any  man  on  this  committee  and  I  trust 
that  he  has  not  for  me,  because  I  did  not  agree  with  him. 

I  come  here  because  of  the  importance  this  bill  means  to  my  por- 
tion of  the  country,  and  I  think  it  might  not  be  out  of  place  briefly 
to  recount  some  of  the  things  that  have  taken  place  so  far  as  mer- 
chant marine  legislation  is  concerned  since  I  became  a  member  of 
this  committee,  almost  14  years  ago. 

When  I  first  came  to  Congress  the  Payne-Hanna  bill  was  then 
being  considered.  That  was  practically  an  extension  of  the  old 
act  of  March  3,  1891.  That  bill  substantially  passed  the  House 
once  and  was  filibustered  to  death  in  the  Senate.  At  one  time  it 
passed  the  Senate  by  unanimous  consent,  without  a  vote  being  cast 
against  it  or  roll  call  demanded.  But  it  never  went  upon  the  statute 
books.  And  during  all  the  years  I  have  been  a  Member  of  Congress 
both  parties  are  to  blame  with  regard  to  merchant-marine  legislation. 
The  Kepubhcan  Party  never  passed  anything  that  was  of  any  benefit 
to  our  American  merchant  marine,  and  since  the  Democratic  Party 
has  been  in  power  they  have  not  only  not  passed  anythmg  for  the 
benefit  of  the  merchant  marine,  but  they  have  passed  two  or  three 
acts  which  are  very  hostile  to  it.     They  have  succeeded  in  driving 

721 


722      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

most  of  the  ships  that  still  remained  in  the  deep  sea  trade' from  under 
the  flag. 

The  next  thing  after  the  act  of  1891,  as  I  recall,  was  the  free-ship 
proposition.  For  many  years  as  I  sat  at  this  table,  every  time  that  a 
proposition  was  suggested  or  mentioned  to  assist  the  American  mer- 
chant marine  we  were  met  with  the  question  of  free  ships.  And  I 
remember  that  I  caused  a  great  deal  oi  astonishment  among  some  of 
my  friends  on  this  committee — my  friend  Mr.  Greene  for  one — when 
one  day  I  announced  I  was  going  to  vote  for  a  bill  that  had  a  free- 
ship  clause  in  it.  He  was  apparently  much  disturbed  and  he  wanted 
to  know  why.  He  thought  I  had  changed  my  position.  I  said, 
"I  am  in  favor  of  a  free-ship  clause  being  put  in,  because  it  will  do  no 
good,  and  I  want  a  free-ship  bill  to  be  enacted  and  to  let  it  go  upon  the 
statute  books  to  demonstrate  it  has  no  value  and  perhaps  we  can 
get  rid  of  it."  It  went  upon  the  statute  books  and  has  been  there 
ever  since,  and  so  far  as  I  know  not  a  single  ship  has  ever  taken 
advantage  of  it. 

Then  next  came  the  matter  of  discriminating  duties.  I  have 
always  been  in  favor  of  discriminating  duties  upward,  but  I  have 
been  opposed  to  discriminating  duties  downward,  because  it  has  been 
demonstrated,  many  times,  that  with  a  discriminating  duty  down- 
ward would  amount  to  nothing — between  here  and  South  America  it 
would  not  amount  to  enough  to  run  a  line  of  canoes.  But  it  had  to 
be  tried.  We  tried  that,  and  it  went  upon  the  statute  books,  and  the 
only  thing  we  have  accumulated  under  that  is  a  lawsuit  in  which  the 
Government  may  have  to  pay  something  between  ten  and  twenty 
million  dollars. 

Well,  we  had  to  have  something  more,  and  the  next  was  free  regis- 
ter, and  we  placed  upon  the  statute  books  a  law  permitting  any  old 
tub  which  floated  anywhere  on  the  sea  to  come  under  the  American 
flag,  and  we  waived  the  inspection  laws  for  two  years  and  allowed 
them  to  put  foreign  oflficers  upon  ships  for  seven  years.  We  got  some 
ships  under  that.  The  war  was  coming  on;  they  did  not  love  the 
American  flag,  but  they  feared  the  submarme,  and  a  great  many  of 
them  came  under  our  flag.  And  what  a  merchant  marine  it  is.  And 
how  it  thrills  the  heart  of  every  patriotic  American  as  he  looks  upon 
ships  built  abroad,  manned  by  foreign  officers,  foreign  sailors,  the  flag 
upon  it  probably  made  of  foreign  cloth,  and  the  dye  stamped  upon  the 
flag  out  of  German  dyes.  Any  man  who  can  be  proud  of  that  kind  of 
an  American  merchant  marme  is  entitled  to  my  admiration.  Well,  I 
have  no  objection  to  that.  It  has  done  no  harm.  I  do  not  think  it 
has  done  any  good.  So  far  as  I  know,  it  has  not  added  a  single  ton 
available  for  American  commerce.  So  far  as  I  know,  not  a  single  ship 
has  changed  its  run  from  what  it  hkd  been  under  the  foreign  flag.  It 
has  been  of  no  benefit  in  that  respect.  The  great  foreim  corporations 
wanted  to  get  under  the  flag  only  for  its  protection  during  the  war. 
I  am  not  blaming  them  for  that.  And  just  as  soon  as  the  war  is  over, 
they  will  go  back,  just  as  soon  as  they  can,  unless  we  pass  a  law,  as  I 
see  Secretary  Redfield  advocates,  not  permitting  them  to  withdraw. 
I  will  not  discuss  that  proposition. 

Then  the  next  act  we  had  was  the  Panama  Canal  act,  and  that  was 
the  first  act  since  I  have  been  a  Member  of  Congress,  the  first  act  in 
50  years  that  has  been  written  upon  the  statute  books  that  was  of 
any  advantage  to  the  American  merchant  marine.     I  had  in  my  pos- 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE,     723 

session  a  list  of  some  54  vessels  that  were  being  constructed  for  use 
through  the  Panama  Canal,  when  suddenly  it  was  announced  that 
the  President  had  changed  his  attitude  and  that  the  bill  giving  free 
passage  to  American  ships  in  the  coastwise  trade  through  the  Panama 
Canal  was  to  be  repealed.  Had  we  left  the  Panama  Canal  act  upon 
the  statute  books,  we  would  have  had  a  great  merchant  marine 
between  these  two  coasts  that  would  have  been  suitable  for  naval 
auxiliaries  and  would  have  been  a  great  step  toward  giving  us  a  mer- 
chant marine.  The  repeal  of  that  law  not  only  destroyed  an  oppor- 
tunity to  build  up  a  merchant  marine  but,  so  far  as  our  coast  was 
concerned,  it  was  one  of  the  greatest  strokes  toward  paralyzing  busi- 
ness that  was  ever  written  upon  the  statute  books  of  this  country. 
That  placed  a  tax  of  $1.50  a  thousand  upon  every  1,000  feet  of  lumber 
brought  from  the  Pacific  coast  to  the  Atlantic.  And  not  only  on  that 
which  goes  through,  or  that  would  go  through  the  canal  itself,  but 
upon  all  the  lumber  that  goes  across  the  continent  by  rail  it  placed 
an  additional  freight  rate  of  $60  a  car  upon  every  car  of  freight  that 
passes  across  this  continent. 

We  followed  that  by  th?  seamen's  bill.  We  had  a  little  left  yet. 
There  were  a  few  vessels  still  flying  the  American  flag  that  ran  across 
the  Pacific  Ocean.  I  remember  distinctly  that  I  stood  upon  the  floor 
of  tlie  House  when  that  bill  was  under  consideration  and  I  made  the 
statrment  that  if  that  law  went  upon  the  statute  books  every  ship 
fl3ing  the  American  flag  in  the  foreign  trade  on  the  Pacific  would 
disappear  within  60  days  after  it  went  into  force.  They  disap- 
peared before  it  went  into  force.  You  can  argue  what  you  please 
as  to  what  caused  those  vessels  to  disappear,  but  they  are  gone.  The 
men  who  owned  and  run  them  say  the  seamen's  bill  was  responsible 
for  tliL'ir  going.  But  it  is  one  thing  absolutely  sure — they  are  gone; 
that  you  enacted  >our  seamen's  bill  and  those  vess^els  disappeared. 
I  have  heard  Mr.  Schweiin  before  this  committee  say  substantially 
several  times  that  if  that  bill  was  enacted  the  Pacific  Mail  steamers 
would  cease  to  run  across  the  Pacific.  Last  summer,  in  order  to  be 
sure,  and  also  before  I  made  that  statement  on  the  floor  of  the  House, 
I  wrote  to  Ml-.  Schwerin  and  I  told  him  I  did  not  want  to  be  placed 
in  a  false  position;  that  Secretary  Wilson  and  many  others  had  made 
the  statement  that  it  was  merely  a  bluff  about  his  going  to  withdraw; 
and  Secretary  Wilson,  soon  after  they  were  withdrawn,  said  they 
intended  to  withdi'aw  them  anyway.  Mr.  Schwerin  wrote  me  and 
said  that  if  the  seamen's  law  was  passed,  those  vessels  would  stop 
running. 

Some  have  said  it  was  because  of  the  Panama  Canal  act  that  they 
withdrew,  but  that  act  had  been  upon  the  statute  books  for  some 
time.  I  am  not  going  to  argue  further  as  to  why  they  withdrew. 
Certainly  so  far  as  the  Minnesota  was  concerned,  no  one  can  contend 
it  was  on  account  of  the  Panama  Canal  act,  because  the  Minnesota  was 
so  large  she  could  not  get  through  the  canal,  and  certainly  the  canal 
was  m  no  way  the  cause  of  the  Minnesota  disappearing. 

The  Chairman.  Right  at  that  point.  The  Minnesota  belonged  to 
the  Northern  Pacific  Railway  Co.,  did  it  not? 

Mr.  Humphrey.  Yes,  it  did. 

The  Chairman.  A  gentleman  told  me,  who  was  as  close  to  Mr.  Hill 
as  any  man  living,  so  far  as  I  know,  that  they  did  not  care  anything 


724      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

about  the  seamen's  bill,  and  they  had  no  objection  to  its  being  enacted 
into  la^v. 

Mr.  Humphrey.  That  man  who  told  you  that  evidently  did  not 
coiTcctly  state  it,  or  else  Mr.  Hill's  manager  was  in  a  funny  perform- 
ance when  doAMi  here  before  a  committee  he  made  the  state- 
ment  

The  Chairman.  No  representative  of  Mr.  Hill's  was  ever  before 
this  committee  and  opposed  the  passage  of  that  law. 

Mr.  Humphrey.  That  may  be  true  enough,  but  before  its  passage 
he  was  before  the  Senate  committee  and  I  have  the  hearmg  right  here 
in  my  hand.  Mr.  Lacey  appeared  before  that  committee,  page  288, 
part  5,  of  the  hearing,  and  Mr.  Lacey  made  the  following  statement: 

Therefore  I  wish  to  say  that  if  this  bill  should  become  a  law  the  steamship  Min- 
nesota would  have  to  withdraw. 

I  do  not  know  how  much  more  emphatic  or  how  much  more  direct 
you  can  get  it,  when  the  manager  of  the  company  and  the  manager 
of  the  ship  itself  appears  before  a  committee  and  makes  the  state- 
ment in  so  many  words — the  manager  of  the  steamship  Minnesota, 
the  man  who  was  running  it  and  was  responsible  for  it. 

Mr.  Hardy.  You  are  aware  of  the  fact  that  a  great  many  advo- 
cates of  subsidy  also  advocate  none  but  American  seamen  on  our 
steamships,  are  you  not  ? 

Mr.  Humphrey.  Oh,  yes;  I  am  aware  of  that. 

Mr.  Hardy.  Then  what  consistency  is  there  in  the  position  of  a 
man  who  advocates  subsidy  and  at  the  same  time  wants  American 
seamen  on  our  boats  and  then  complains  of  the  seamen's  bill  because 
it  requires  75  per  cent  of  the  crew  to  be  able  to  understand  the 
language  of  the  officers  ? 

Mr.  Humphrey.  Oh,  the  seamen's  bill  was  a  proposition  to  take 
care  of  the  imaginary  American  sailor. 

Mr.  Hardy.  What  I  am  getting  at  is  tliis:  How  can  a  man  advo- 
cate none  but  American  sailors  on  American  vessels  and  at  the  same 
time  object  to  a  bill  which  requires  only  75  per  cent  had  to  be  able 
to  understand  the  language  of  the  officers  ? 

Mr.  Humphrey.  I  can  not  see  how  the  gentleman  can  misunder- 
stand the  attitude,  as  long  as  he  has  sat  at  this  table,  of  those  who 
have  advocated  a  mail  subvention  of  subsidy — I  have  never  called 
it  anything  but  a  subsidy — and  have  advocated  that  in  considera- 
tion of  the  fact  that  they  were  going  to  receive  that  subsidy  thi.t 
they  should  have  a  certain  per  cent  of  American  sailors. 

Mr.  Hardy.  That  was  with  the  idea  that  all  American  ships  should 
have  American  sailors;  and  yet  when  we  required  only  75  per  cent 
to  be  able  to  understand  the  language  of  the  officers,  they  criticize 
that  bill. 

Mr.  Humphrey.  But  the  75  per  cent  you  want  to  put  on  is  on  a 
ship  which  you  are  not  assisting.  I  want  a  ship  running  across  the 
ocean  to  use  the  same  class  of  crews  which  are  used  by  the  ships  with 
which  they  are  in  competition,  competing  vessels  that  receive  $100,000 
in  gold  for  each  round  trip.  And  yet  with  that  handicap,  with  the 
handicap  of  cheap  construction,  then  you  want  to  place  the  addi- 
tional burden  of  this  seamen's  bill  upon  those  ships.  Now,  I  do 
not  care  anything  about  what  you  may  argue  back  and  forth;  the 
truth  is  that  the  American  vessels  are  gone;  and  you  voted  for  the 
bill  that  drove  them  off.     You  can  explam  it  as  long  as  you  please, 


I 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     725 

but  you  can  not  explain  it  to  me  if  you  sat  there  and  argued  from 
now  until  sundown,  1  would  be  of  the  same  opinion  and  you  would  be 
of  the  same  ojiinion  that  you  arc  now,  so  we  will  just  call  it  off. 

Mr.  Hardy.  I  am  just  trying  to  get  you  to  reconcile  your  position. 

Mr.  Humphrey.  I  am  not  going  to  reconcile  my  position,  it  does 
not  need  it. 

Mr.  Hardy.  You  criticize  that  bill  because  it  requires  75  per  cent 
to  understand  the  English  language,  and  yet  you  turn  around  and 
want  nothing  but  American  seamen  on  American  ships. 

Mr.  Humphrey.  You  can  not  put  that  in  my  mouth.  I  did  not 
say  because  it  required  75  per  cent  to  understand  the  language. 

The  Chairman.  The  bill  passed  the  House,  under  the  rules, 
unanimously. 

Mr.  Humphrey'.  No;  it  did  not  pass  unanimously. 

The  Chairman.  Nobody  voted  against  it. 

Mr.  Humphrey.  I  did  not  vote  against  it,  no;  because  I  knew  I 
could  not  get  a  roll  call.  I  have  been  in  the  House  long  enough  not  to 
go  through  the  silly  performance  of  standing  up  on  the  floor  and 
asking  for  a  roll  call  when  I  know  I  can  not  get  it. 

Mr.  Burke.  What  is  there  in  the  seamen's  law,  outside  of  the  lan- 
guage test,  which  you  could  claim  would  operate  detrimentally  upon 
your  Pacific-American  lines  ? 

Mr.  Humphrey.  Outside  of  the  language  test? 

Mr.  Burke.  Outside  of  the  language  test. 

Mr.  Humphrey.  If  you  will  just  read  section  13,  you  will  see.  Let 
me  give  you  something  on  that.  I  wonder  if  the  gentleman  remem- 
bers that  it  requires  that  a  seaman  shall  be  so  old;  it  requires  that 
he  shall  have  so  much  experience;  it  requires  that  he  shall  have  a 
certain  amount  of  his  w:iges  advanced  to  him;  it  requires  that  w^hen 
that  vessel  comes  into  port  if  any  American  citizen  files  an  affidavit 
that  some  man  on  there  has  not  had  the  requisite  experience,  that  he 
does  not  understand  the  language  of  his  officers,  that  he  is  not  of  a 
certain  age,  by  the  filing  of  that  affidavit  the  ship  can  be  held  up 
and  a  muster  taken  to  determine  the  fact.  And  as  soon  as  that  is  fin- 
ished, then  another  aflidavit  can  be  filed  and  another  muster 
demanded,  and  that  ship  can  not  depart  from  port  until  they  have 
complied  with  all  the  requirements  of  the  law.  And  then  if  the 
crew  deserts  the  ship  can  not  depart  until  it  has  a  crew  of  the  kind 
which  it  came  in  with.  To  illustrate,  suppose  a  Japanese  vessel 
comes  into  the  port  of  Seattle  when  they  have  a  labor  dispute  and 
some  man  files  an  affidavit  that  some  seaman  upon  that  vessel  is 
not  of  the  required  age — is  not  19  years  old — and  has  not  had  three 
years'  experience,  he  can  tie  up  that  ship  until  they  have  a  muster 
of  the  crew.  Then,  when  he  gets  through  with  that,  some  other  man 
files  another  affidavit,  and  he  says  there  are  some  members  of  that 
crew  that  do  not  understand  the  language  of  the  officers,  and  it  is 
tied  up  again  and  another  muster  of  the  crew. 

Mr.  Haedy^  May  I  suggest  to  you 

Mr,  Humiheey.  I  reiuse  to  be  interrupted  until  I  have  finished. 
And  now  you  go  through  that  performance,  and  there  is  no  end  to  it. 
Do  you  suppose  a  ship  wants  to  submit  to  that?  Is  that  any 
burden  ?     It  is  not  the  language  test. 

Mr.  Hardy.  I  want  to  raise  a  point  of  order,  that  we  are  not  pro- 
ceeding to  discusfe  the  seamen's  bill. 


726      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Humphrey.  I  was  just  about  through. 

Mr.  Hardy.  I  was  kindly  seeking  to  direct  your  attention  to  that 
fact. 

Mr.  Humphrey.  The  language  test  is  only  one  of  the  immaterial 
parts  of  the  seamen's  law. 

Mr.  Burke.  I  am  glad  to  hear  you  say  so.  That  was  about  the 
sole  objection  of  your  Pacific  steamship  owners  to  it. 

Mr.  Humphrey.  Now,  let  me  give  the  gentlemen  one  other  thing 
while  I  am  on  that.     I  did  not  intend  to  speak  on  this. 

The  Chairman.  You  argue  here  that  such  a  thing  is  so  and  so;  we 
do  not  agr-ee  with  your  construction  of  that  law  at  all. 

'Mr.  Humphrey.  I  am  well  aware  of  that.  You  did  not  agree  with 
my  statement  that  those  ships 

The  Chairman.  We  think  your  statement  is  wholly  untenable  and 
unjustifiable  by  anything  contained  in  the  law  itself.  I  am  willing, 
however,  you  should  go  ahead  and  make  those  much-exaggerated 
statements,  because  they  will  be  just  that  much  more  easily  refuted. 

Mr.  Humphrey.  I  never  did  agree  with  the  gentlemen  and  I  never 
will  agree,  but,  unfortunately  for  my  portion  of  the  country,  those 
prophecies  came  true,  just  as  my  prophecies  before  came  true.  Out 
on  the  Pacific  coast  we  are  caring  more  about  having  ships  on  the 
sea  than  we  are  about  carrying  out  some  pet  theory. 

I  was  m  Seattle  when  the  Minnesota  made  its  last  visit.  I  saw 
that  ship  as  it  got  ready  to  depart,  and  I  saw  it  go  out  of  that  port. 
I  remembered  the  day  when  it  had  come  mto  the  port  flying  the 
American  flag.  And  as  that  ship  went  out  on  the  Pacific,  as  it  passed 
San  Francisco,  it  sent  this  dispatch,  which  I  want  to  put  in  the  record: 

To  the  good  people  of  San  Francisco: 

The  Great  Northern  steamship  Minnesota,  the  finest  ship  that  ever  sailed  the  seas 
and  the  largest  sliip  flying  the  American  flag,  is  now  passing  down  your  beautiful  city, 
b  lund  to  a  foreign  country,  never  again  to  rclui'n  with  Old  Glory  flying  over  her  stern. 
Tlie  reason  for  tliis  is  well  known  to  all  business  interests  of  the  country.  I  bid  you 
farewell . 

Thomas  W.  Gorlick, 
Commander  Steamship  "  Minnesota." 

I  put  that  telegram  against  all  your  arguments  on  the  seamen's 
bill. 

The  Chairman.  What  has  become  of  the  Minnesota? 

Mr.  Humphrey.  I  understood  it  was  sold  the  other  day  for  $3,000,- 
000  to  an  English  firm.     That  is  the  last  I  have  seen  about  it. 

Inasmuch  as  we  have  gone  into  the  seamen's  bill,  I  am  gomg  to 
take  a  minute  or  two  more. 

Mr.  Hardy.  We  are  not  having  a  hearing  on  the  seamen's  bill, 
and  it  seems  to  me  that  with  regard  for  the  record  in  this  case,  you 
ought  to  omit  any  remarks  on  that  bill,  because  it  would  provoke 
an  endless  discussion. 

Mr.  Humphrey.  I  notice  Mr.  McAdoo  the  other  day  referred  to 
the  seamen's  bill  in  two  or  three  places,  and  I  will  be  through  with 
the  seamen's  bill  in  about  four  minutes. 

Mr.  Hardy.  All  right,  then;  I  have  no  objection. 

Mr.  Humphrey.  The  great  argument  made  in  favor  of  the  sea- 
men's bill  was  that  it  was  gomg  to  help  the  American  sailor.  I 
have  no  objection  to  helping  the  American  sailor,  so  far  as  anj^thing 
that  will  help  the  American  sailor,  so  far  as  anything  will  take  care 
of  him;  but  I  want  to  impress  agam  upon  this  committee  and  to 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      727 

put  some  statements  in  the  record  to  show  that  the  American  sailor 
is  an  imaginary  quantity,  and  that  we  have  shed  our  tears  and 
sniffled  over  something  that  did  not  exist,  except  in  the  minds  of  the 
gentlemen  on  the  committee.  I  hold  in  my  hand  here  a  statement 
from  the  Seattle  Post-Intelligencer  of  February  15  last.  It  says 
that  they  have  been  examining  some  of  those  American  sailors 
who  were  to  be  benefited  by  the  seamen's  law,  out  upon  the  Pacific 
coast.  They  found  891  in  Seattle  that  passed  the  test.  Of  this 
number  nine  were  American  citizens.  These  are  the  ones  that  we  were 
legislating  for,  and  driving  the  American  ships  from  thi  sea,  for  the 
benefit  of  9  American  sailors  out  of  891.  I  wiU  ask  to  have  this  in- 
serted in  the  hearing,  because  I  do  not  want  to  take  the  time  to  read  it. 
(The  clipping  above  referred  to  is  as  follows:) 

[The  Post-Intelligencer,  Tuts  lay,  Feb.  15, 1916.] 
AMERICAN   SEAMEN. 

The  foreign  trade  department  of  the  San  Francisco  Chamber  of  Commerce  ha 
recently  compiled  from  the  offices  of  the  various  collectors  of  customs  in  the  ocean 
ports  ot  this  country  the  statistics  relating  to  the  enrollment  of  "American"  seamen 
under  the  seamen's  law,  ostensibly  designed  for  their  protection.  The  showing  is  a 
startling  one. 

In  the  Puget  Sound  district,  for  example,  the  number  of  seamen  who  have  proved 
qualified  uncler  the  act  and  who  therefore  received  certificates  as  by  the  law  required 
was  891.  Of  this  number  9,  or  about  1  per  cent  of  the  whole  number,  were  of  American 
birth,  or  strictly  American  seamen.  Further,  but  18  of  the  whole  number  were  even 
naturalized.  The  unnaturalized  aUens  who  have  received  certificates  under  this  act 
for  the  protection  of  "American"  seamen  constituted  97  per  cent  of  the  whole  number. 

Puget  Sound,  it  may  be  admitted,  makes  the  worst  sho\ving  in  this  respect  of  any 
ocean  port  of  the  country,  but  only  in  degi'ee.  Portland,  with  but  226  enrolled  sea- 
men, has  fully  11  native  Americans  among  her  American  seamen  and  but  76  per  cent 
of  unnaturalized  aliens.  The  average  for  the  whole  country  is  17  per  cent  natives, 
8  per  cent  naturalized,  and  75  per  cent  aliens  who  have  not  sought  American  citizen - 
Bhip. 

For  the  benefit,  ostensibly,  of  the  aliens  who  have  been  working  on  American  ships 
under  the  guise  of  "American  seamen,"  Congi'ess  has  deliberately  turned  the  carrying 
trade  of  the  Pacific  over  to  Japan.  If  there  ever  was  a  bill  passed  under  rottenly  false 
pretenses,  it  is  this  so-called  seamen's  bill,  which  Congress  manifests  no  disposition  to 
repeal  or  even  to  modify. 

Mr.  Hardy.  Will  you  let  me  ask  you  a  question  with  reference  to 
a  past  matter 

Mr.  Humphrey.  Yes. 

Mr.  Hardy  (continuing).  Because  my  memory  is  not  clear  about 
it.  Did  you  ask  me  at  one  time  if  you  were  absent  to  have  you 
recorded  in  favor  of  what  was  then  known  as  the  Wilson  bill — or  the 
seamen's  bill  at  that  time — when  you  were  on  the  committee  ? 

Mr.  Hlimphrey.  Did  I  ask  what  ? 

!Mr.  Hardy.  It  seems  to  me  that  at  one  time  when  we  were  discussing 
the  present  seamen's  bill,  as  it  was  then,  providing  for  the  abolishing 
of  imprisonment  and  abolishing  of  arrest  for  desertion,  you  asked  me 
to  have  you  recorded  in  favor  of  that  bill.  Do  you  recollect  anything 
about  that? 

I^Ir.  HuMPHKEY.  No ;  you  are  mistaken  about  that.  I  was  in  favor 
of  the  particular  section  abolishing  imprisonment. 

Mr.  Hardy.  Wliat  bill  was  it  that  you  asked  me  to  record  you  in 
favor  of,  and  I  think  I  made  a  statement 

Mr.  PIuMPHREY.  It  was  probably  the  bill  that  Capt.  Wescott  was 
in  favor  of. 


728      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Hardy.  And  I  made  a  statement  on  the  floor. 

Mr.  Humphrey.  That  was  the  bill  in  which  Capt.  Wescott  was 
interested. 

Mr.  Hardy.  That  may  have  been. 

Mr.  Humphrey.  Oh,  yes;  I  was  in  favor  of  that  bill.  I  was  in 
favor  of  the  bill  relating  to  officers. 

Mr.  Hardy.  Deahng  with  officers  and  minor  officers,  the  bill  known 
as  the  Hardy  bill,  you  asked  me  to  record  you  in  favor  of  that  bill  ? 

Mr.  Humphrey.  Yes,  Now,  I  want  to  place  in  the  record  a  state- 
ment in  regard  to  the  wages  received  by  seamen  going  out  of  Puget 
Sound  and  running  to  Alaska.  Tliis  is  a  coast  proposition,  and  I  take 
pride  in  submitting  it,  because  I  have  heard  so  many  statements 
around  this  table  about  the  poor  wages  of  the  seamen  that  I  am  glad 
to  put  in  the  record  here  an  official  statement  of  what  the  seamen  do 
receive. 

The  Chairman.  You  do  not  mean  to  say  the  statements  were  by 
members  of  the  committee  ? 

Mr.  Humphrey.  Wliat  is  that  ? 

The  Chairman.  You  spoke  of  statements  around  this  table,  you 
do  not  mean  statements  made  by  members  of  the  committee  ? 

Mr.  Humphrey.  No;  statements  to  the  committee  about  the  wages 
of  the  seamen.  I  want  to  read  part  of  a  letter  which  has  come  from 
an  officer  of  the  Department  of  Commerce  submitted  to  me.  I  am 
not  going  to  put  his  name  in  the  record.  I  am  perfectly  willing  that 
any  member  of  this  committee  should  look  at  the  letter  and  see  that 
it  is  genuine,  but  I  do  not  care  to  make  his  name  public.     He  says: 

Hon.  W.  E.  Humphrey, 

Washington,  D.  C. 

Dear  Sir:  In  fulfillment  of  my  promise,  I  take  pleasure  in  inclosing  to  you  a  memo, 
of  the  amounts  paid  to  the  deck  officers,  boatswain,  carpenter,  watchman,  and  able- 
bodied  seaman  on  a  number  of  the  ships  making  this  port  their  home  port. 

This  memo,  will  show  the  capacity  in  which  employed,  the  rate  of  wages  per  month, 
the  amount  paid  each  man,  the  name  of  the  shij),  lier  run,  the  number  of  da>s  for 
which  the  pay  is  given,  and  the  date  on  which  the  ships  were  paid  off.  The  amounts 
you  may  verify,  if  you  wish.  It  would  be  possible  to  give  you  a  list  where  the 
amounts  paid  would  be  larger.     The  inclosed  list  is  a  good  average. 

According  to  an  agreement  with  the  seamen's  union,  all  work  performed  before 
7  o'clock  in  the  morning  and  after  5  o'clock  in  the  afternoon,  all  holidays,  and  all 
Sundays  in  port  are  considered  overtime  and  must  be  paid  at  the  rate  of  50  cents 
an  hour.  This  is  also  the  agreement  with  the  water  tenders,  oilers,  firemen,  and  coal- 
pa?sers'  union,  and  the  cooks  and  stewards'  union. 

From  75  per  cent  to  90  per  cent  of  these  crews  are  of  foreign  birth,  and  but  a  compar- 
atively small  number  of  them  are  naturalized  citizens.  When  an  American-born 
youth,  of  American  parents,  goes  as  deck  boy,  life  is  made  such  a  burden  for  him 
by  other  members  of  the  crew  that  usually  one  voyage  is  enough. 

One  effect  of  the  new  law  (see  inclosed  marked  copies)  is  the  driving  of  the  old- 
time  deep-water  seaman  from  the  sea.  It  has  been  the  custom,  ever  sijice  the  be- 
ginning of  ships,  for  seamen  to  separate  themselves  from  their  pay  when  they  come 
ashore  in  the  shortest  time  possible  and  to  draw  upon  their  advances  for  their  cloth- 
ing, shoes,  and  tobacco  for  the  new  voyage.  Not  able  to  get  clothing,  they  are  com- 
pelled to  stay  ashore  without  money,  and,  unfitted  to  earn  a  livelihood  on  shore, 
become  vagrants  for  others  to  support.  The  ship  is  then  supplied  with  seamen  by 
the  seamen's  union.  Only  those  acceptable  to  the  agents  of  the  seamen's  union 
are  admitted  to  the  union. 

If  you  desire  any  further  information  that  I  can  give  on  this  subject,  I  will  be 
very  glad  to  have  you  so  advise  me. 
Yours,  respectfully. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      729 

Mr.  Greene.  What  is  the  date  of  that?  • 

Mr.  Hltviphrey.  It  is  dated  December  4,  1915. 

The  Chairman.  Vfho  did  you  say  furnished  that  information  ? 

Mr.  Humphrey.  I  say  I  will  furnish  the  name  to  the  committee. 
It  comes  to  me  confidentially  from  an  officer  in  the  Department  of 
Commerce  and  Labor.  Now,  I  ask  the  privilege  of  printing  the 
list  he  furnishes  me,  and  I  do  hope  the  committee  wiU  have  the  time 
to  look  at  it,  because  you  may  be  surprised  to  know  how  much  the 
able  seaman  on  those  short  runs  to  Alaska  receives.  He  receives 
almost  as  much  pay  as  the  captain,  more  than  the  first,  second,  third, 
and  fourth  mates,  and  more  than  any  other  of  the  officers.  To 
give  you  one  illustration  here,  for  21  days  the  captain  received  $111, 
and  one  able  seaman  received 

Mr.  Hardy.  What  objection  has  that  gentleman  to  his  name 
being  put  in  the  record  ?     He  is  an  officer  of  the  Government 

Mr.  Humphrey.  That  is  the  reason. 

Mr.  Hardy  (continuing).  And  he  is  sending  the  information  to 
another  officer  of  the  Government. 

Mr.  Hltvipheey.  I  will  show  the  gentleman  the  letter  if  he  wants 
to  look  at  it. 

Mr.  PIardy.  I  think  the  world  ought  to  have  the  information. 
It  is  official. 

Mr.  Humphrey.  I  will  say  this  information  is  taken  from  the 
records,  and  if  anyone  wants  to  dispute  it,  he  will  know  where  to 
find  the  information. 

The  Chairman.  This  is  in  the  coastwise  trade  ? 

Mr.  Humphrey.  It  is  in  the  coastwise  trade,  but  I  wanted  to  call 
your  attention  to  this  particularly,  I  will  cite  just  one  or  two  in- 
stances. The  captain  received  for  21  days,  $105.  One  of  the  able 
seamen  received  S101.65;  another,  $101.65;  another  one,  $99.15. 
And  they  run  on  down  like  that.  The  watchman  received  $37.40; 
the  quartermaster,  $61.15.  And  this  shows  all  the  way  through  that 
the  able  seamen  received  almost  as  much  as  the  captain  and  more 
than  the  ordinary  officar. 

Mr.  Hardy.  You  say  that  is  in  the  Alaskan  trade  ? 

Mr.  Hitviphrey.  Yes,  I  am  not  showing  that  as  a  criticism;  I  am 
showing  it  as  a  matter  of  satisfaction  to  show  that  the  stories  we  have 
heard  so  often  that  the  seamen  of  the  country  are  underpaid  is  not 
correct. 

Mr.  Hardy.  You  do  not  question  the  statements  of  witnesses, 
who  have  come  before  us  like  Mr.  Schwerin,  and  who  have  given  the 
wages  of  his  seamen  ? 

Mr.  Humphrey.  Not  a  bit. 

The  Chairman.  He  said  they  were  from  $15  to  $21  a  month. 

(The  statement  offered  by  Mr.  Humphrey  follows.) 


730      SHIPPIKG  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


• 

Rate  of 
wages 

per 
month. 

Valdez, 

Alaska- 
City  of 
Puebla, 
Nov.  4, 
1915,  for 

about  21 
days 

(passenger 
and 

freight). 

Skagway 

,  Alaska. 

Ketchikan,  Alaska. 

Valdez, 

Alaska. 

Capacity  in  which 
employed. 

Spokane, 
Oct.  20, 
1915,  for 
12  days 
(passpnger 

and 
freight). 

City  of 
Seattle, 
Oct.  17, 
1915,  for 
13  days 
(passenger 

and 
freight). 

North- 
land, 
Nov.  8, 
1915,  for 
24  days 
(freight 
only). 

Despatch,  Alameda, 
Nov.  8,       Nov.  8, 
1915,  for      1915.  for 
19  days      23  days 

(passenger  (passeiiger 

and           and 
freight),    freight). 

Admiral 
Farragut, 
Nov.  9, 
1915,  for 
22  days 
(passenger 

and 
freight). 

Master  and  pilot 

Do 

$150.00 

150.00 

/    105.00 

\    100.00 

85.00 

70.00 

60.00 

55.00 

/      55.00 

\      50.00 

50.00 

50.00 

50.00 

50.00 

50.00 

50.00 

50.00 

50.00 

50.00 

50.00 

50.00 

50.00 
50.00 

$111.00 
105.00 

1      74.35 

$62.50 
62.50 

44.50 

$67.10 
67.10 

47.60 

$122.65 

$97.65 

$118.65 
118. 65 

80.30 

68.80 
43.00 

$113.00 
101. 00 

Chief  mate 

66.00 
48.00 

76.35 

78.65 

64.85 

Third  mate 

! 

51.00 

Fourth  mate 

63.35 

26.00 
51.25 

49.25 

36.00 
33.75 
33.75 
36.75 
36.25 
49.25 
49.25 
49.25 

49.25 

52.25 

52.25 

1      56.25 
54.00 

27.00 
49.35 

47.15 

22.90 
44.90 
43.15 
43.80 
29.55 
47.15 
58.15 
47.15 

47.15 
47.15 
56.65 



89.30 
79.15 

41.10 

51.10 

53.35 

52.10 

52.35 

87.60 

87.75 

85.35 

;      73.  .35 

\      92. 10 

f      87.85 

\      87.35 

/      87. 35 

\      87.35 

95.35 

101. 65 

Carpenter 

}      93. 40 

37.40 
61.15 
73. 15 
61.40 
69.65 

101. 65 
95. 65 

101. 60 

93.15 
99.15 

97.15 

/      87.40 

\      89. 15 

83.40 

91.75 

72.80 

Quartermaster ..... 
Do 

67.15 
66.65 
55.35 
55.15 
65.90 
62. 15 
68. 40 

68.40 

Do      

Do         

Able  seaman 

86.75 
84.50 
80.10 

83.00 
86.65 
80.40 

91.05 

Do "■ 

78.30 

Do 

72.00 

Do 

100.80 

Do 

82.75 
96.05 

Do  

68.65 

63.  es 

Do 

Do 



Mr.  Humphrey.  Now,  Mr.  Chairman,  I  want  to  talk  about  this  bill 
for  a  few  moments.  I  am  not  going  to  go  into  the  details  of  the  bill. 
I  might  say  in  a  general  way  that  I  am  somewhat  inclined  to  believe 
it  would  be  a  propitious  time  for  a  shipping  board  of  some  character 
to  be  created  that  would  have  the  power  to  assist  American  shipping. 
If  that  element  is  in  your  bill,  and  I  understand  it  is,  why  that  part  of 
it  I  would  have  no  objection  to,  because  if  there  has  ever  been  a  time 
in  the  history  of  American  shippmg  when  we  need  some  authority  to 
act,  it  is  now. 

Mr.  LoLT).  And  brains. 

Mr.  Humphrey.  Yes.  If  we  had  a  board  of  that  character  now, 
we  would  not  be  troubled  with  this  matter  of  the  seamen's  bill. 

The  Chairman.  Do  you  not  think  there  ought  to  be  some  depart- 
ment of  the  Government  whose  attention  should  be  given  exclusively 
to  the  development  of  our  merchant  marme  ? 

Mr.  HuiiPHREY.  You  mean  some  department  or  bureau  ? 

The  Chairman.  Yes. 

Mr.  Humphrey.  Yes;  I  do.     That  is  what  I  am  trying  to  say. 

The  Chairman.  In  years  past  it  has  been  a  mere  mcident  and  re- 
ceived very  little  attention. 

Mr.  HL'iiPHREY.  1  want  for  just  a  moment  to  go  back  to  the  sea- 
men's bill,  because  in  looking  over  Mr.  McAdoo's  testimony  I  find 
something  which  answers  Mr.  Burke's  cfuestion  as  to  what  objection 
I  had.  I  want  to  direct  your  particular  attention  to  one  phase  of  the 
seamen's  bill,  and  I  do  not  want  to  leave  it  in  that  way.  I  notice  in 
the  hearings  that  Mr,  McAdoo  said  he  could  not  understand  why 
Robert  Dollar  had  taken  his  ships  from  Seattle  over  to  Vancouver. 


SHIPPING  BOARD,  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      731 

I  will  give  you  a  little  incident  that  first  brought  that  to  my  attention, 
I  was  out  in  Ballard  last  summer  and  went  into  the  office  of  the 
Stimpson  Lum})er  &  Shingle  Mill  Co.  and  saw  the  manager  there, 
whom  I  happened  to  know  very  well,  and  he  said,  "Mr.  Humphrey, 
what  did  you  pass  the  seamen's  bill  for?"  I  said,  "I  did  not  have 
anything  to  do  with  it;  do  not  accuse  me  of  passing  the  seamen's 
bill."  lie  then  showed  a  letter  from  Robert  Dollar,  in  which  Mr, 
Dollar  had  notified  him  they  were  going  to  transfer  their  ships  over  to 
Vancouver.  And  he  said,  "For  many  years  we  have  sold  the  Robert 
Dollar  Co.  at  the  rate  of  S100,000  worth  of  lumber  a  month."  Here 
was  a  loss  of  81,200,000  to  a  single  mdl,  and  that  is  gone  and  is  now 
transferred  over  to  British  Cokmibia.  There  is  that  one  aspect  of  the 
seamen's  bill.  And  the  laboring  people  of  the  State  of  Washington 
lost  more  by  that  one  transac  tion  alone  than  all  the  result  of  the  sea- 
men's bill  will  ever  bring  to  them.  And  that  is  not  tru3  only  of  the 
Dollar  Line,  I  have  in  my  office  now  a  set  of  resolutions  from  the 
Merchants'  Association  of  Seattle.  They  are  very  much  alarmed  and 
have  called  my  attention  to  the  fact  that  all  of  the  foreign  lines,  except 
the  Japanese  line,  are  going  to  go  over  to  British  Columbia.  And 
why  should  they  not  do  it?  Why  should  they  go  to  Seattle  when  it 
would  cost  them  from  •?  10,000  to  S30,000  more  than  to  go  to  Van- 
couver? And  just  as  soon  as  we  seek  to  enforce  the  bill — the  Ameri- 
can vessels  are  all  already  gone — we  will  lose  all  the  foreign  lines 
except  the  eTapan?se  line. 

Now,  1  made  the  prophesy  about  the  American  ships  being  driven 
from  the  sea,  and  T  make  the  prophesy  now  that  if  you  keep  the  sea- 
men's bill  upon  the  statute  books  all  the  foreign  lines  into  Puget 
Sound  will  go  to  Vancouv(n*  except  the  Japanese  line.  And  that  is 
the"  situation  we  are  in  out  there,  and  do  you  wonder  that  we  feel 
somewhat  sensitive  when  we  see,  in  addition  to  all  this,  one  more 
proposition,  Government  ownership,  to  make  forever  hopeless  the 
opportunity  of  getting  an  American  merchant  marine  ? 

And  I  notice  Mr.  McAdoo,  in  his  statements,  does  not  take  a  posi- 
tion anywhere.  I  refer  to  his  remarks  because  he  is  tlie  special  pro- 
ponent of  this  bill.  First  he  holds  out  the  impression  that  he  is  going 
to  run  these  vessels  for  the  purpose  of  budding  up  American  ( ommerce, 
and  he  thinks  they  may  carry  that  freight,  and  it  is  going  to  be  a 
great  thing.  Then  when  asked  the  question  by  Mr.  Saunders  or 
some  one  else,  he  said  there  would  not  be  a  sufficient  number  of  vessels 
to  cause  competition  that  would  create  trouble  with  the  vessels 
already  running.  Now,  we  have  had  some  experience  out  on  Puget 
Sound  about  a  Government-ownership  proposition.  When  I  first 
came  down  here  to  Congress  we  were  running  out  of  Puget  Sound  a 
couple  of  transports,  one  of  which  was  the  »Dix,  which  I  think  is  still 
rumiing.  At  that  time  we  had  the  Minnesota  and  the  Dakota;  the 
two  ships  of  the  Boston  Steamship  Co.,  and  the  three  ships,  I  think, 
of  the  Boston  Tow  Boat  Co.  I  think  that  is  the  exact  number.  Am 
I  right  about  that,  Mr.  Hadley? 

Mr.  Hadley.  I  think  that  is  approximately  correct, 

Mr,  Humphrey.  This  one  transport,  the  Dix,  continued  to  run  out 
of  Puget  Sound.  Those  American  vessels  that  were  then  running 
from  Puget  Sound  to  the  Orient  pleaded  with  the  Government  to  let 
them  carry  .Ai-my  supplies  for  the  Philippines.  They  said  if  they  had 
that  that  they  could' continue  to  run.     The  department  refused  to 


732      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

do  it.  They  sent  them  on  the  Army  transports.  And  I  had  an 
investigation  made,  and  it  was  demonstrated  b^^^ond  the  question  of 
doubt  that  every  ton  of  freight  that  was  carried  cost  the  Government 
25  per  cent  more  than  it  would  to  cany  it  on  these  private  ships. 
But  that  did  not  make  any  difference.  They  had  that  steamer  and 
they  continued  to  run  it,  and  the  result  is  that  the  old  Dix  remains 
and  the  American  ships  have  gone. 

Now,  do  not  get  the  idea  because  you  run  a  few  Government  ships 
you  are  not  going  to  discourage  competition.  And  I  want  to  call  your 
attention  to  this  fact.  It  appears  all  through  these  hearings,  \\-ithout 
going  into  great  detail  about  it,  that  they  pretend  there  is  a  great 
emergency  existing.  Is  there  ?  Is  there  a  great  emergency  existing 
to-day  ? 

The  Chairman.  1  say  yes. 

Mr.  Humphrey.  Where? 

The  Chairman.  Right  in  our  trade  on  the  Atlantic  coast. 

Mr.  Humphrey.  No  greater  emergency  exists  to-day  thaa  has  ex- 
isted for  the  last  10  years. 

The  Chairman.  I  deny  that,  and  these  hearings  show  that  that 
statement  is  not  correct  in  any  sense. 

Mr.  Humphrey.  I  have  read  the  hearings — statements  that  I  have 
heard  for  the  la^t  10  years. 

The  Chairman.  If  you  read  aU  these  hearings,  Mr.  Humphrey,  you 
will  change  your  mind. 

Mr.  Humphrey.  No,  I  think  not.  If  there  is  such  an  emer- 
gency- 


The  Chairman.  I  think  we  all  agree  there  is  an  emergency. 

Mr.  Humphrey.  If  there  is  such  an  emergency  about  it,  will  the 
chairman  explain  why  it  is  we  are  carrying  more  commerce  to  Europe 
to-day  than  ever  before?  And  how  does  it  get  over  there?  It 
don't  fly. 

Mr,  Burke.  How  can  you  explain  that  the  freight  rates  on  the 
average  are  about  800  per  cent  higher? 

Mr.  Hltviphrey.  I  can  explain  that 

'  The  Chairman.  The  shippmg  men  say  it  is  based  on  the  law  of 
supply  and  demand,  that  the  demand  for  ships  so  far  exceeds  the 
supply  that  the  freight  rates  have  gone  up  in  some  instances  a  thou- 
sand per  cent,  and  yet  you  say  there  is  no  emergency  ? 

Mr.  Humphrey.  I  do  not  think  there  is  any  that  this  legislation 
would  remedy. 

Mr.  Hardy.  Did  you  read  Mr.  Lake's  testimony  about  his  efforts 
to  get  some  cargo  space? 

Mr.  Humphrey.  Yes;  and  I  have  known  for  the  last  10  years  that 
you  could  not  get  cargo  from  South  America,  and  for  10  years  past 
the  ships  have  been  coming  to  this  country  from  South  xlmerica  in 
ballast. 

^Ir.  Hardy.  Do  you  mean  to  say  you  can  read  Mr.  Lake's  testimony 
and  say  there  is  no  greater  scarcity  of  tonnage  now  than  there  has 
been  for  10  years  past? 

Mr.  Humphrey.  There  is  a  greater  scarcity  of  tonnage  from  here 
to  Europe  and  throughout  the  world.  I  admit  that,  because  a  great 
deal  has  been  destroyed;  but  there  is  no  such  emergency  as  can  be 
met  by  this  bill.  Suppose,  for  the  sake  of  the  argument,  that  you 
pass  this  biU.     Where  are  you  going  to  construct  those  ships  ? 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      733 

The  Chairman.  In  American  shipyards.     ' 

Mr.  Humphrey.  Where  are  the  American  shipyards  ? 

The  Chairman.  We  have  50  of  them. 

Mr.  Hl^iphrey.  Wliere? 

The  Chairman.  On  the  Great  Lakes  and  on  the  Atlantic  and 
Pacific  coasts.  They  are  all  ready  to  extend  their  facilities  to  build 
battleships  and  cruisers,  and  I  assume  they  would  do  the  same  to 
build  merchant  ships. 

Mr".  HuTviPHREY.  That  is  a  different  proposition. 

The  Chairman.  IVIr.  Penton  was  before  this  committee  the  other 
day.  You  know  him  quite  well  because  he  was  your  colaborer  for 
subsidy  many  years  ago.  He  said  they  could  build  a  10,000-ton 
ship  on  the  Great  Lakes  now  and  put  it  under  its  own  steam  in  six 
weeks. 

Mr.  Humphrey.  That  is  true;  but  how  are  you  going  to  get  it 
out  to  the  ocean  ? 

Tlie  Chairman.  If  it  is  not  over  260  feet  long  and  45  feet  wide  we 
cf>n  get  it  out. 

Mr.  Hltmphrey.  I  would  like  to  see  you  get  a  10,000-ton  ship,  or 
any  other  vessel  of  that  size,  out  of  the  Great  Lakes. 

Mr.  Loiro.  You  would  have  to  cut  it  in  two  pieces  ? 

Mr.  Humphrey.  Yes;  you  would  have  to  cut  it  in  two  pieces. 

Mr.  Hardy.  Why  can  they  not  build  them  in  shipyards  on  the 
coa?t  as  weU  as  on  the  Lakes  ? 

Mr.  Humphrey.  You  can  in  time  to  come,  of  course. 

The  Chairman.  I  do  not  know  that  that  particular  ship  can  be 
gotten  through  to  the  ocean.  Fu-st  he  said  it  could  be  finished  in 
10  weeks  and  then  he  wrote  me  the  other  day  and  said  it  was  6  weeks. 

Mr.  Humphrey.  And  that  has  been  done  in  the  development  of 
our  coastwise  trade  which  my  friend  Mr.  Hardy  has  always  looked 
upon  so — I  will  not  say  unfavorably — but  which  he  has  wanted  to 
change. 

Mr.  Hardy.  I  just  want  to  verify  that. 

Mr.  Humphrey.  I  have  here  a  statement  in  my  hand  from  the 
Seattle  Post-InteUigencer  of  March  2,  about  a  miUion-doUar  steamer 
to  be  built  in  Seattle. 

Mr.  Hardy.  Before  you  get  off  to  that,  let  me  ask  you  one  question 
in  connection  with  this  so-called  free  sliip  biU:  Do  you  remember 
that  you  and  I  both  agreed  that  it  would  not  add  a  ship  to  our  mer- 
chant registrj^  ? 

Mr.  Hltmphrey.  Yes.    » 

Mr.  Hardy.  And  I  told  you  and  you  agreed  that  there  was  no  in- 
ducement, under  that  limited  free  ship  bill,  for  any  ship  to  come  under 
our  flag,  and  the  prophecy  thg-t  both  of  us  made  was  that  none 
would.     And  they  did  not  until  this  war  came  on. 

Mr.  Hltimphrey.  Now,  Mr.  Chairman,  according  to  the  statement 
by  Secretary  Kedfield,  he  says  the  vessels  which  are  now  being  con- 
structed in  this  country  are  divided  as  follows:  Sixty-four  tankers,  71 
cargo  boats,  10  passenger  and  cargo  boats,  16  colliers,  19  car  floats, 
and  50  of  other  classes,  a  total  of  230,  amounting  to  901,471  gross 
tons.  If  that  is  correct — and  I  have  no  reason  to  doubt  it — then 
our  shipyards  are  taking  advantage  of  the  situatioji,  and  they  are 
building  just  as  rapidly  as  they  can.  Every  shipyard  in  this  country 
to-day,  so  far  as  I  know,  is  full.     And  if  you  were  to  give  an  order  for 

32910—16 47 


734      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

a  ship  to-morrow,  according  to  Secretary  Redfield — here  is  what  he 
says;  I  will  quote  it.  Ho  says:  "I  doubt  if  it  is  possible  to  obtain  a 
ship  in  this  country  at  least  until  the  latter  part  of  1917." 

Mr.  Burke.  Mr.  Humphrey,  let  me  say  that  about  four  weeks  ago 
some  Norwegian  parties  contracted  with  a  shipbuilding  firm  at 
Manitowoc,  on  the  west  shore  of  Lake  Michigan,  for  two  vessels,  with 
a  tonnage  of  some  seven  or  eight  thousand  tons. 

Mr.  Humphrey.  I  do  not  doubt  that. 

The  Chairman.  What  would  you  advise  us  to  do,  nothing  at  all  ? 
Or  is  that  your  attitude  because  we  can  not  get  the  ships  right  on 
the  spot  ? 

Mr.  Humphrey.  I  would  advise  you  at  this  time  not  to  go  on  record 
before  the  country  as  in  favor  of  Government  ownership  and  Govern- 
ment operation  oi  these  vessels. 

The  Chairman.  Would  you  be  in  favor  of  passing  a  ship  subsidy 
bill  at  this  time  ? 

Mr.  Humphrey.  Wliat  is  that  ? 

The  Chairman.  Would  you  be  in  favor  of  passing  a  ship  subsidy 
bill  at  this  time  ? 

Mr.  Humphrey.  It  would  depend  very  much  upon  what  the  pro- 
visions of  that  subsidy  bill  were.  I  do  not  know  whether  you  can 
get  vessels  or  not. 

The  Chairman.  Take  the  one  you  introduced  in  a  former  Congress. 

Mr.  Humphrey.  Yes,  I  would. 

The  Chairman.  Could  you  get  any  ships  immediately  if  that  be- 
came a  law  ? 

Mr.  HtTMPHREY.  You  could  not  get  ships  immediately,  but  you 
would  not  make  any  payments  until  you  could  get  them. 

The  Chairman.  Is  there  any  necessity  for  a  subsidy  now,  when  we 
are  building  ships  in  American  shipj^ards  as  cheaply  as  they  can  be 
built  abroad  ?  And  is  not  the  cost  of  operating  ships  now  under  the 
American  and  foreign  flags  practicall}"  the  same  ? 

Mr.  Humphrey'.  I  very  much  doubt,  Mr.  Chairman,  if  there  is  any 
necessity  of  doing  anything  at  this  time  further  than  creating  a  ship- 
ping board.  Now  we  all  have  one  purpose;  we  are  all  trying  to  build 
up  an  American  merchant  marine,  and  we  might  just  as  well  look 
at  the  situation  as  it  is.  After  this  war  closes  there  is  going  to  be  a 
tremendous  amount  of  this  tonnage  released,  undoubtedly,  and  the 
price  of  ships  is  going  to  drop.  Suppose  that  you  commence  to  build 
your  ships,  or  to  go  out  and  buy  them,  you  are  going  to  pay  the 
very  highest  prices  that  have  ever  been  known  in  the  history  of  the 
world ;  you  are  going  to  commence  construction  at  a  time  when  it  will 
cost  you  more  than  it  ever  has  before.  I  do  not  think  the  emergency 
now  is  any  greater  than  it  has  been  in  years  gone  by.  There  is  trouble 
everywhere,  but  we  can  not  build  and  get  ready  by  the  time  this  war 
ends,  in  all  probability.  And  would  private  parties,  in  the  situation 
we  are  in,  commence  such  an  undertaking  as  this  now,  without  regard 
to  the  question  of  the  Government  ownei'ship  features  of  it  ? 

If  you  will  permit  me,  I  want  to  refer  to  one  or  two  statements 
that  Mr.  McAdoo  made,  although  I  think  I  have  already  largely 
covered  that,  except  that  he  repeats  on  several  occasions — he  first 
makes  the  statement  that  these  vessels,  if  they  are  constructed,  are 
intended  to  run  "where  private  enterprise  for  some  reason  does  not 
find  the  inducement  to  go.     If  that  is  true,  then  they  are  going  to 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  IMERCHANT  MARINE.      735 

run  at  a  loss.  And  there  is  certain  talk  about  paying  a  subsidy,  and 
I  want  to  call  the  chairman's  attention  to  this  fact,  that  you  are 
going  to  pay  a  subsidy  anyway.  If  you  employ  private  parties,  the 
subsidy  that  you  pay  to  private  lines,  theoretically  at  least,  and  as 
near  as  we  were  able  to  figure  out  when  we  proposed  those  bills,  was 
to  make  up  the  difference  in  cost  of  what  it  cost  to  operate  an  An.eri- 
can  ship  and  a  foreign  ship;  or,  in  other  words,  to  enable  them  to 
run.  And  if  you  run  your  Government-owned  ship,  you  are  going 
to  pay  that  loss  anyway;  you  are  going  to  sustain  that  loss  just  the 
same  whether  you  pay  it  on  a  line  of  vessels  the  Government  runs 
or  a  line  of  vessels  run  by  private  parties. 

Mr.  Loud.  But  you  have  a  sugar-coated  pill  here,  haven't  you? 

Mr.  Humphrey.  That  is  the  situation  in  which  you  find  yourself. 
I  was  especially  struck  by  the  statement  of  Secretary  McAdoo  where 
he  said  that  in  a  subsidy  there  was  nothing  definite.  He  never  v/as 
more  greatly  in  error  on  anything  than  that.  All  of  those  subsidy 
bills  specified  certain  kinds  of  ships,  of  certain  tonnage,  of  a  certain 
speed,  making  a  certain  number  of  trips,  and  being  in  shape  to  be 
turned  over  to  the  Government  upon  a  moment's  notice,  and  to 
carry  a  certain  number  of  boys,  and  not  a  penny  was  to  be  paid 
until  that  was  done.  What  is  there  that  is  definite  in  Mr.  McAdoo's 
proposition  ? 

The  Chairman.  And  that  was  to  be  paid  without  reference  to  the 
element  of  profits.  I  will  say  very  frankly,  if  we  were  going  to  have 
any  form  of  subsidy  legislation,  it  ought  to  be  along  the  lines  of  the 
bill  introduced  by  Mr.  Rowe,  of  New  York,  which  was  framed  by  the 
Chamber  of  Commerce  of  New  York.  That  is  the  most  rational  sub- 
sidy bill  to  my  mind,  because  that  cuts  out  the  element  of  profit  and 
simply  proposes  to  equalize  the  cost  in  construction  and  operation. 

Mr.  Humphrey.  I  want  to  call  attention  to  one  feature  of  Secretary 
McAdoo's  statement  right  here:  In  criticizing  subsidy,  he  said  it  was 
indefinite.  He  is  cleany  in  error,  as  every  man  knows  who  has  con- 
sidered one  of  those  bills.  And  I  want  to  call  your  attention  to  this 
proposition.  Did  you  ever  have  anything  brought  before  Congress 
that  was  more  indefinite  and  uncertain  than  this  proposition  ?  What 
kind  of  a  vessel  are  you  going  to  have  ?  What  character  is  it  going  to 
be  ?  Is  it  going  to  be  a  fruit  carrier,  so  that  we  can  get  fruit  from  the 
Pacific  coast  around  to  the  Atlantic,  or  over  to  Europe  ?  Is  it  going 
to  be  a  lumber  carrier,  so  that  we  can  carry  cargoes  to  South  America 
and  to  the  Orient  ?  Or  is  it  going  to  be  a  fast  vessel  that  runs  across 
the  Atlantic  ?  What  is  going  to  be  the  character  of  it  ?  He  speaks 
about  getting  in  the  neighborhood  of  from  50  to  75  vessels  for  naval 
auxiliaries  for  $50,000,000.  I  have  just  read  here  where  a  contract 
is  to  be  let  for  a  million-doUar  freight  steamer  in  Seattle.  If  you  are 
going  to  have  naval  auxiliaries,  and  that  is  what  it  comes  back  to 
finally  (he  takes  the  position  that  this  is  for  the  purpose  of  getting 
naval  auxiliaries),  do  you  think  w^e  are  going  to  get  naval  auxiliaries 
for  less  than  a  million  dollars  apiece  ? 

The  Chairman.  Wliat  kind  of  vessels  do  you  think  we  need  as 
naval  auxiliaries? 

Mr.  Humphrey.  Various  kinds.  There  are  some  of  the  colliers — • 
I  am  not  an  expert  and  I  do  not  pretend  to  be  an  expert,  but  my 
friend  Loud  here  does. 


736      SHIPPING  BOARD,  XAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

The  Chairman.  We  had  an  expert  before  the  committee,  Admiral 
Benson,  who  stated  we  needed  merchant  vessels. 

Mr.  Humphrey.  Of  what  character  ? 

The  Chairman.  We  need  vessels  ordinarily  that  may  be  used  as 
cargo  ships — for  colliers;  then  we  need  vessels  of  the  mail,  package 
freight,  and  passenger  type.  In  fact,  the  best  types  of  merchant  vessels 
are  the  kind  of  vessels  that  would  be  available  and  useful  as  naval 
auxiliaries.  And  I  was  told  by  the  vice  president  and  general 
manager  of  the  Newport  News  Ship  Building  Co.  that  there  was 
a  whole  lot  of  misinformation  or  misconception  about  the  kind  of 
vessels  that  might  be  used  as  naval  auxiUaries.  He  said  we  need 
merchant  ships,  the  kind  that  can  be  most  profitably  used  in  trade 
as  merchant  ships,  to  be  taken  over  as  naval  auxiUaries  in  time  of  war. 

Mr.  Humphrey.  If  they  were  simply  for  naval  auxiliaries,  of  course 
they  would  vary  in  price;  but  if  you  are  going  to  have  any  scout 
cruisers  and  that  class  of  vessels,  such  as  the  requirements  we  used  to 
make  in  the  subsidy  propositions,  they  are  goin^  very  much  beyond  it. 

The  Chairman.  I  think  you  wiU  a^ee  with  me  it  would  not  be 
practicable  at  aU  to  build  a  merchant  ship  of  25  or  30  Imot  speed.  In 
other  words,  you  could  not  operate  a  merchant  ship  hke  that  profit- 
ably in  any  trade. 

Mr.  Humphrey.  No;  it  could  not  be  operated  for  mail  carriage? 

The  Chairman.  Because,  when  you  get  beyond  a  16-knot  speed 
you  increase  the  cost  of  operating  the  ship  ver}'  rapidly. 

Mr.  Humphrey.  Here  is  a  clipping  handed  to  me  by  Mr.  Loud, 
showing  that  the  Prometheus,  which  was  built  in  1907,  cost  81,605,000. 
And  if  Secretary  McAdoo  is  right,  it  would  cost  twice  as  much  to-day. 

Mr.  Loud.  It  has  a  capacity  of  between  five  and  six  thousand  tons. 

Mr.  Humphrey.  Mr.  Loud  says  it  has  a  capacity  of  between  five  and 
six  thousand  tons,  and  the  price  is  SI, 605, 622. 

The  Chairman.  What  is  the  speed  ? 

Mr.  Loud.  Sixteen  knots.  The  Prometheus  and  the  Vestal  have  a 
speed  of  16  knots.     They  were  built  for  colliers . 

The  Chairman.  They  were  to  accompany  the  fleet? 

Mr,  Humphrey.  Yes;  to  accompany  the  fleet.  I  say,  Mr.  Chair- 
man, there  are  certain  classes  that  would  be;  but  you  take  these 
others 

The  Chairman.  I  would  hate  to  think  that  a  board  created  under 
this  act  would  have  so  little  sense  as  to  build  a  collier  or  merchant 
vessel  of  that  type. 

Mr.  HuiviPHREY.  According  to  these  figures  here,  if  Secretary 
McAdoo  is  right,  the  one  costing  $1,738,000  and  the  other  $1,605,000, 
they  would  cost  in  the  neighborhood  of  $3,000,000  each. 

Another  thing  to  which  1  desire  to  call  attention.  Suppose  that 
you  did  buy  these  ships.  That  is  only  the  beginning  of  it.  Where 
are  you  going  to  operate  them?  Where  have  you  any  terminals? 
Who  is  going  to  decide  upon  where  to  run  them? 

The  Chairman.  They  have  some  terminals  in  Seattle,  I  am 
certain. 

Mr.  HuiMPHREY.  But  they  do  not  belong  to  the  Government, 
unfortunately. 

The  Chairman.  They  are  available  to  the  Government. 

Mr.  Humphrey.  Oh,  yes;  they  are  if  you  pay  for  them,  but  they 
are  not  going  to  give  them  to  the  Government  for  nothing. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      737 

The  Chairman.  The  trusts  out  on  the  coast  won't  utilize  them. 
You  have  noticed  that  ? 

Mr.  Humphrey,  I  have  noticed  that  statement  by  my  friend, 
Bob  Bridges,  and  he  has  been  nw  good  friend  for  many  years,  and 
he  is  my  friend  now:  but  mj^  friend  Robert  can  take  a  little  corpora- 
tion shadow  and  hold  it  so  close  to  his  eyes  that  it  shuts  out  all  the 
rest  of  the  universe.  He  is  a  very  estimable  gentleman,  but  I  would 
not  take  his  judgment  alone  on  any  proposition. 

The  Chairman.  The  port  of  Seattle  invested  $5,000,000  in  those 
terminals. 

Mr.  Humphrey.   I  think  more  than  that. 

The  Chairman.  And  I  doubt  if  there  are  as  fine  terminals  in  any 
port  in  the  United  States  as  they  have  in  Seattle.  And  yet  the 
Waterhouse  Co.  and  some  of  the  other  steamship  companies  rofuse 
to  consign  goods  over  or  to  unload  cargoes  at  those  docks. 

Mr.  Humphrey.   I  saw  that  statement 

The  Chairman.  We  want  to  correct  that  under  section  9  of  this 
bill. 

Mr.  Humphrey.  You  do  not  have  to  go  into  Government  owner- 
ship to  correct  that. 

The  Chairman.  We  are  going  to  correct  it  under  section  9  of  this 
bill. 

Mr.  Humphrey'.  You  do  not  have  to  have  Government  owner- 
ship. 

The  Chairman.   The  Government  has  to  use  its  strong  arm  to  do  it. 

Mr.  Humphrey.  To  start  with,  I  always  take  an  ex  parte  state- 
ment with  some  degree  of  allowance.  Perhaps  if  you  heard  the 
other  side  of  the  story  it  might  be  different. 

The  Chairman.  You  do  not  want  to  be  understood  as  saying  there 
is  nothing  in  the  conditions  there  which  needs  ccyiTCct  ing  ? 

Mr.  Humphrey.  I  do  not  know  whether  there  is  or  not;  but  I  say 
frankly  I  would  not  be  carried  off  of  my  feet  by  any  statement  Mr. 
Bridges  makes. 

The  Chairman.  I  was  out  there  and  saw  those  terminals. 

Mr.  Humphrey.  There  is  no  question  about  their  being  wonderful 
terminals.  I  think  probably  they  are  the  best  on  the  Pacific  coast 
with  one  or  two  exceptions.  I  think  Los  Angeles  and  San  Francisco 
has  the  equal  of  them.  I  am  glad  my  friend  Judge  Alexander  came 
out  there  and  saw  what  we  were  doing  on  the  Pacific  coast. 

I  just  want  to  say  this  one  thing  now  in  addition:  It  a.ppears  irom 
the  statement  of  Secretary  Redfield  that  all  the  shipyards  of  this 
country  are  crowded.  I  have  not  heard  the  evidence  here,  and  I  do 
not  know  whether  there  is  any  claim  that  there  are  ships  anywhere 
in  the  v,"orld  that  can  be  bought  nov\'.  I  see  Secretary  McAdoo  says 
he  could  have  bought  them. 

The  Chairman.  No;  not  novv'. 

Mr.  Humphrey.  Not  now;  no.  So  we  are  faced  with  the  situation 
tnat  when  this  war  closes  there  is  going  to  be  a  great  release  of  tonnage, 
and  there  is  going  to  be  a  readjustment  of  all  the  shipping  of  the 
world,  and  it  does  seem  to  me  that  this  would  be  the  most  inopportune 
time  possible  for  us  to  embark  upon  this  new  and  untried  policy  of 
Government  ov>'iiership.  Now,  with  all  kindness  and  without  want- 
ing to  say  anything  harsh  about  either  one  of  them,  I  call  the  attention 
of  the  committee  to  the  statement  made  bv  Secretarv  McAdoo  and 


738      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Secretary  Redficld  time  and  again.  It  runs  all  through  this  hearing 
which  I  read  last  night.  They  seem  to  be  imbued  with  the  idea  that 
they  can  run  a  shipping  business  or  any  other  business  better  than 
anybody  else.  Frequently  Mr.  McAdoo  makes  this  statement,  that 
they  are  going  to  demonstrate  to  the  world  how  to  build  ships;  that 
they  are  going  to  do  it  better  and  cheaper  than  it  has  ever  been  done 
before.  And  one  of  the  main  arguments  he  makes  is  that  he  wants 
the  Government  to  give  him  S50,000,000  in  order  that  he  can  demon- 
strate to  the  world  that  the}^  can  build  ships  cheaper  than  anyone 
else  ever  has  built  them. 

The  Chairman.  Not  he,  but  we. 

Mr.  Humphrey.  Yes;  we. 

The  Chairman.  The  American  citizens. 

Mr.  Humphrey.  Now  my  friend,  Secretary  Redfield,  has  made 
statements  of  the  same  character.  Secretary  Redfield  believes  he 
can  run  any  business,  from  making  matches  to  building  battleships, 
better  than  anyone  in  the  United  States,  and  a  great  deal  better 
than  anyone  in  the  business.  I  do  not  agree  w^ith  him.  I  think 
that  this  whole  proposition  is  simply  imtenable  and  uncertain — a  mere 
dream.  They  have  not  given  to  you  any  definite  details  about  what 
they  expect  to  do.  And  if  some  man  had  come  in  here  with  a  sub- 
sidy proposition  that  the  Government  pay  out  $50,000,000  in  sub- 
sidy and  did  not  specify  the  character  of  the  ship,  did  not  tell  you 
where  it  was  going  to  run,  and  told  you  nothing  about  it,  except  "'if 
you  will  do  that,  I  will  go  and  build  ships  cheaper  than  anybody  else 
in  the  world  ever  has  done  and  demonstrate  to  the  rest  of  the  nations 
of  the  world  and  to  the  shipping  people  that  they  do  not  understand 
their  business,"  how  long  w^ould  you  have  listened  to  it?  I  do  not 
believe  there  is  any  human  being  living  that  w^ould  take  his  own 
capital  and  go  into  a  proposition  of  that  kind,  and  I  think  it  takes 
the  National  Treasury  to  start  an  imdertakinglike  that,  and  I  do  not 
believe  that  either  one  of  those  gentlemen  would  invest  their  own 
capital  in  such  an  undertaking. 

Mr.  Greene.  I  want  to  ask  you  a  few  questions.  A  gentleman 
by  the  name  of  Smith,  Capt.  Smith,  appeared  before  us  yesterday 
and  made  the  statement  that  w^ith  the  $50,000,000  we  could  build 
200  ships.  He  came  here  as  an  expert  seaman  and  as  an  expert 
agriculturalist,  and  I  do  not  know  now  many  other  lines  he  was 
expert  in — an  expert  seaman  and  he  had  commanded  vessels — and 
he  made  the  statement  clearly  and  distinctly  that  with  the  $50,000,000 
provided  in  this  bill,  you  could  construct  200  ships  that  would  be 
suitable  for  the  over-seas  trade. 

The  Chairman.  In  normal  times. 

Mr.  Greene.  Oh,  no;  he  did  not. 

The  Chairman.  Now,  treat  the  gentleman  fairly.  He  said  in 
normal  times,  and  I  say  that  was  not  only  possible  but  it  could  have 
been  done  prior  to  the  war  in  Europe. 

Mr.  Greene.  No;  he  states  it  could  be  done  with  this  money  now, 
as  I  understood  him. 

The  Chairman.  Oh,  no.     Now,  you  ought  to  be  fair. 

Mr.  Greene.  I  want  to  be  corrected  if  he  did  not;  but  I  think  he 
stated  distinctly — and  I  asked  him  the  question  how  many  ships 
could  be  built  with  this  money  (and  the  record  will  show  whether 
I  am  correct  or  not),  and  he  said  200.     I  asked  him  how  many  ships 


SHIPPING  BOABD,  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE.     739 

he  supposed  could  be  built  with  this  money,  and  he  said  200  with  the 
$50,000,000.     He  said  that  would  be  about  $250,000  apiece. 

Mr.  Curry.  I  think  he  did  correct  himself. 

Mr.  Hardy.  The  gentleman  was  very  modest  and  claimed  he  did 
not  know  much  about  that  part  of  the  subject. 

Mr.  Greene.  He  stated  it  rather  broadly  when  he  stated  it.  If 
he  corrected  it  afterwards,  I  did  not  hear  him. 

Mr.  Hardy.  He  was  brought  over  by  yourself  and  others. 

Mr.  Greene.  Oh,  no;  he  was  not  brought  over  by  me.  It  was  in 
answer  to  plain  questions  that  were  asked  him  as  an  expert. 

The  Chairman.  I  think  his  statement  is  consistent  and  sensible. 

Mr.  Greene.  There  is  another  thing  I  want  to  ask  you,  and  that 
is  how  long  a  vessel  could  come  through  the  WeUand  Canal  ? 

Mr.  Humphrey.  I  do  not  know,  Mr.  Greene;  I  am  not  an  expert. 

Mr.  Greene.  I  am  told  that  no  vessel  over  236  feet  in  length 
could  come  through. 

The  Chairman.  Secretary  Redfield  made  that  statement. 

Mr.  Humphrey.  Permit  me  just  here  to  read  something  that  Sec- 
retary McAdoo  said.  He  said,  in  answer  to  a  question  from  you 
Mr.  Greene: 

I  understand  that  not  a  great  deal  of  equipment  would  be  necessary  if  the  machinery 
and  the  material  was  shipped  there  to  be  assembled  at  those  yards.  You  see,  a  lot 
of  this  stuff  can  be  turned  out  in  the  interior  of  the  country  and  shipped  and  assembled 
on  the  seacoast. 

I  merely  call  attention  to  that  to  show  that  while  I  know  nothing 
whatever  about  shipbuilding,  the  proponent  of  this  bill  apparently 
knows  as  little  about  ship  construction. 

The  Chairman.  I  suppose  he  had  in  mind  that  ship  your  friend 
Penton  said  they  could  build  up  there  in  six  weeks. 

Mr.  HuTMPHREY.  My  friend  Penton  could  demonstrate  that  he  knew 
a  great  deal  more  than  the  one  making  this  statement. 

The  Chairman.  Have  you  read  his  testimony  ? 

Mr.  Humphrey.  I  have  read  Secretary  McAdoo's  testimony,  and 
I  am  convinced  that  he  knew  nothing  about  shipbuilding;  that  he  is 
simply  a  dreamer,  and  is  asking  the  United  States  to  give  him 
$50,000,000  in  order  to  demonstrate  that  the  other  men  on  the  earth 
do  not  know  their  business. 

Mr.  Hardy.  Do  you  think  he  is  any  more  of  a  dreamer  than  the 
man  who  with  an  increase  of  a  thousand  per  cent  in  freight  rates 
thinks  it  is  necessary  to-day  to  give  subsidy  ? 

Mr.  Humphrey.  I  am  not  going  to  discuss  the  question  of  sub- 
sidy with  3^ou. 

Mr.  Hardy.  I  want  that  sort  of  a  dream. 

Mr.  Humphrey,  The  gentleman  has  had  his  dreams  around  this 
table  the  same  as  I  have,  but  unfortunately  mine  have  always  come 
true. 

^Ir.  Hardy.  I  want  to  say  that  it  has  frequently  been  argued  by 
the  gentlemen  who  have  appeared  here  before  us  that  this  bill  is 
in  the  nature  of  a  subsidy.  If  I  believed  it  was,  we  would  reverse  our 
positions,  for  I  would  be  inclined  to  fight  it  if  I  thought  it  was  a 
genuine  subsidy  bill.  That  is  my  contribution.  I  do  not  mean  to 
arouse  an  argument,  because  I  know  you  and  I  never  could  agree. 

Mr.  Humphrey.  I  will  make  this  one  statement  now,  with  due 
apologies  to  m}^  friend  Judge  Hardy,  that  it  must  take  a  peculiar 


740      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

character  of  mentality  in  a  man  who  can  hold  up  his  hands  in  horror 
at  taking  out  of  the  Government  Treasury  a  few  million  dollars  to 
pay  ships  to  operate  in  a  specific  undertaking,  in  a  specific  service, 
ships  of  a  certain  character,  to  be  at  the  command  of  the  Govern- 
ment in  time  of  war,  and  yet  to  advocate  the  taking  of  $50,000,000 
out  of  the  Treasury  in  a  lump  to  go  to  a  half-baked  socialistic  scheme 
that  nobody  knows  where  it  is  going  to  lead  to. 

Mr.  Hardy.  The  peculiar  mentality  is  on  the  part  of  the  gentle- 
man from  Washington. 

Mr.  Humphrey.  If  mine  is  peculiar  and  yours  is  normal,  I  will 
take  the  peculiar  position. 

Mr.  Hardy.  The  point  is  the  gentleman  can  not  stand  for  a  simple, 
straight-cut  proposition.  I  say,  if  this  was  a  subsidy  proposition  our 
positions  would  be  reversed;  you  would  be  for  it  and  I  woidd  be 
against  it.  Now,  the  mentality  of  some  gentlemen  is  such  that  they 
see  in  this  bill  a  subsidy.  The  truth  is  it  is  farthest  from  a  subsidy. 
A  subsidy  is  a  kind  of  a  bounty  given  to  a  private  individual.  This 
is  a  contribution  to  the  general  welfare.  I  am  about  sure  that  the 
gentleman  does  not  contend  that  the  building  of  the  Panama  Canal 
was  a  subsid}^.  But  I  have  heard  it  argued  that  the  improvement 
of  our  rivers  and  harbors  is  a  subsidy,  and  that  our  post  office  is  a 
subsidy. 

Mr.  Humphrey.  I  think  so. 

Mr.  Hardy.  But  the  trouble  with  that  class  of  subsidy  is  it  goes 
for  the  benefit  of  the  public  and  not  for  the  benefit  of  some  special, 
private  interests.  That  is  the  reason  I  favor  that  class  of  general 
benefit  and  the  gentleman  favors  the  other,  of  special  benefit.  Now 
that  may  be  a  peculiar  mental  attitude,  but  it  nevertheless  is  mine. 

Mr.  Humphrey.  You  won't  have  to  argue  with  me  about  that  mat- 
ter, for  it  is  peculiar.  I  admit  it.  Now,  Mr.  Chairman,  while  I  do 
not  intend  to  go  into  the  subsidy  business,  I  wish  some  day  my  friend 
would  arise  in  his  place  in  the  House  and  denounce  the  subsidies  we 
pay  to  the  magazines  of  this  country,  amounting  to  some  $63,000,000 
a  year.  That  is  a  private  enterprise,  and  that  money  goes  straight 
to  them.  We  give  them  $63,000,000  a  year.  They  do  not  pay  the 
Government  anything  in  return. 

The  Chairman.  I  w^ill  not  say  wdiat  I  think  about  that. 

Mr.  Humphrey.  Whether  it  is  a  subsidy,  or  whatever  you  may  call 
it,  it  all  gets  back  to  the  National  Treasury,  and  I  do  not  see  any 
difference  whether  you  take  it  out  and  call  it  a  subvention,  or  whether 
you  reach  straight  in  and  take  it  out  in  a  lump  and  call  it  something 
else. 

The  Chairman.  You  and  I  both  know  how  to  get  1-cent  postage 
for  the  American  people  in  a  practical  way, 

Mr.  Humphrey.  I  will  vote  for  it,  if  you  will  introduce  a  bill. 

1  am  in  favor  of  it. 

The  Chairman.  But  you  won't  vote  to  increase  the  rate  on  second- 
class  mail  matter  to  equal  half  the  cost  to  the  United  States  Gov- 
ernment for  carrying  it? 

Mr.  Humphrey.  I  won't!  You  give  me  an  opportunity  and  I  w^ill 
vote  for  it  in  a  minute.  I  think  that  is  the  most  obnoxious,  inde- 
fensible subsidy  in  the  world.     And  that  is  the  reason  we  have  to  pay 

2  cents  on  our  letters.  Here  we  have  magazines  circulating  adver- 
tisements in  this  country,  70  per  cent  of  which  is  advertismg  matter, 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      741 

and  yet  the  business  man  has  to  pay  five  times  as  much  to  advertise 
as  the  magazines  do.  And  then  for  a  man  to  stand  up  in  holy  horror 
here  and  talk  virtuously  about  being  opposed  to  subsidy.  You  will 
never  get  me  in  that  position  so  far  as  magazines  are  concerned. 

IViU'.  Hardy.  The  gentleman  is  opposed  to  subsidy  if  it  is  a  general 
benefit  to  the  public  at  large.  I  know  that.  He  is  not  in  favor  of 
that  a  particle. 

Mr.  Hltmphrey.  Judge  Hardy  and  I  will  never  agree  on  subsidy, 

Mr.  Edmonds.  I  want  to  go  back  to  the  bill  and  ask  you  a  few 
questions.  You  say  that  you  are  in  favor  of  a  shipping  board. 
What  powers  would  3'ou  propose  to  give  the  shipping  board  ? 

^Ir.  Humphrey.  Mi\  Edmonds,  to  be  frank  with  you  and  with 
the  committee,  I  have  not  given  this  question  much  study  and  I  do 
not  know  that  my  opinion  would  be  of  much  value.  But  it  has 
seemed  to  me  for  a  good  many  years,  and  I  think  my  friend  Hardy 
will  agree  with  me  on  that  (I  liope  so),  that  in  the  present  condition  we 
have,  and  with  the  many  complaints  that  are  made  that  the  American 
ship  is  not  fairly  treated — and  I  do  not  think  anybody  has  any 
thought  but  what  that  is  true,  in  the  foreign  fields,  at  least — that  it 
might  be  a  wise  thing  to  have  a  board  and  to  give  it  power,  perhaps 
not  as  great  as  the  board  of  trade  in  England,  but  to  give  it  some 
power  over  regulating  those  things  until  we  can  get  American  ships 
on  the  seas. 

^ir.  Edmonds.  You  mean  to  regulate  the  rates  ? 

^ii\  Hltmphrey.  I  am  not  sure  whether  you  should  go  that  far 
or  not.  Probably  that  would  be  a  good  thing;  but  I  do  not  know. 
But  I  want  to  say  one  thing,  that  I  was  glad  to  see  Secretary  McAdoo 
come  out  in  favor  of  Americjin  combinations  if  necessary  in  the  foreign 
trade.  It  has  seemed  to  me  for  many  years  it  was  a  shame  and  an 
outrage  that  we  woidd  not  permit  the  American  shippers  and  American 
ships  to  combine  in  foreign  fields  where  they  have  to  fight  combina- 
tions. For  years  upon  the  Pacific  coast,  we  have  suffered  from  that 
very  identical  thing,  that  they  would  not  permit  the  lumbermen  on 
the  Pacific  coast  to  combine  so  that  they  could  send  one  agent  down 
to  South  America  to  represent  all  of  them,  so  that  when  he  would 
give  a  price  it  would  represent  the  price  of  all  the  manufacturers  of 
lumber,  so  that  we  could  invade  the  market  and  fight  competition 
of  our  competitors  who  are  doing  exactly  the  same  thing.  The  foreign 
lumber  manufacturers  have  a  representative  there  who  speaks  for  all 
of  them.  And  I  am  mighty  glad  to  see  Secretary  McAdoo  make  that 
statement,  because  I  think  that  is  right. 

The  Chairman.  I  think  that  is  coming. 

Mr.  Hltmphrey.  I  think  so.  In  my  judgment,  that  provision  should 
never  have  been  in.  the  antitrust  law.  Attorney  General  Wickersham 
made  a  written  statement  once  that  this  provision  did  not  apply  to 
the  foreign  trade.  I  saw  that  letter;  but  it  is  so  close  a  question 
that  no  man  wa^ited  to  take  the  chances  of  being  prosecuted. 

Mr.  Cltrry.  The  Navy  will  be  short  of  auxiliaries  in  the  near  future 
and  they  will  need  auxiliary  ships.  Now,  suppose  this  bill  was  changed 
so  as  to  provide  an,  appropriation  of  $50,000,000  to  be  exj)ended  by 
the  Government  in  the  construction  of  naval  auxiliaries  in  the  navy 
yards  of  the  United  States  (those  are  the  only  yards  not  being  used 
to  capacity  at  the  present  time,  although  some  of  them  arc),  those 
naval  auxiliaries  to  be  used  in  the  over-seas  trade  and  commerce  in 


742      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

times  like  the  present  conditions,  would  you  object  to  the  bill  then  ? 
That  is,  to  take  out  absolutely  the  proposition  of  Government  owner- 
ship, so  far  as  appropriating  more  than  this  850,000,000  is  concerned, 
and  to  use  this  $50,000,000  for  the  construction  of  naval  auxiliaries, 
to  be  constructed  in  such  manner  as  could  be  used  for  carriers  ahd  to 
use  them  then  in  the  over-seas  trade  to  relieve  conditions  such  as 
prevail  at  the  present  time  ? 

Mr.  Humphrey.  I  think  that  would  be  less  objectionable  than  the 
shape  in  which  it  is  now.  If  there  is  a  condition  which  exists  in  our 
Navy  where,  for  the  purpose  of  defense,  to  make  our  Navy  useful — if 
that  emergency  exists,  then — ^I  think  we  ought  to  take  some  steps  to 
provide  relief,  if  it  is  not  to  be  provided  in  private  yards,  through  our 
navy  yards. 

The  Chairman.  Admiral  Benson  testified  before  the  committee 
that  we  needed  about  600,000  tons  of  merchant  ships  now  that  could 
be  made  available  as  naval  auxiliaries;  that  is,  as  a  complement  to 
our  present  Naval  Fstablishment. 

Mr.  Humphrey.  I  notice  Secretary  McAdoo  says  that  would  sup- 
ply ah  out  40  per  cent  of  what  we  need.  But,  Mr.  Curry,  there  is 
this  thing  to  be  thought  about:  There  are  two  questions  presented 
there,  both  of  them  worthy  of  consideration.  If  we  are  going  to  have 
those  ships,  the  question  arises,  Shall  we  tie  them  up  and  not  operate 
them?  On  the  other  hand,  if  they  once  enter  into  trade,  it  is  very 
doubtful  whether  we  would  ever  be  able  to  get  them  out.  Now,  we 
have  hf  d  experience  with  the  transports  to  which  I  called  attention 
before  you  e?me  in.  We  know  how  it  is  with  all  Government  opera- 
tions and  bureaus;  they  are  ambitious,  and  if  you  allow  a  department 
to  h^ive  ships  they  are  ver}'  apt  to  be  like  all  the  other  departments 
— and  it  is  not  to  their  discredit,  but  it  is  to  their  credit — and  they 
become  enthused  with  the  work  and  they  want  to  reach  out  more  and 
more.  And  if  you  once  commence  a  proposition  of  Government 
ownership,  I  do  not  think  you  wiU  ever  end  it,  and  the  result  will  l)e 
that  private  ownership  will  be  destroyed.  I  think  whenever  you 
reach  that  point  you  have  to  take  the  choice  between  the  two,  because 
private  enterprise  is  not  going  to  build  ships  and  go  into  competition 
witli  the  Government,  with  the  National  Treasury  in  liack  of  it. 

Mr.  Curry.  This  will  not  l)e  a  ])ermanent  entering  into  the  busi- 
ness. If  they  were  naval  auxiliaries  they  would  be  absolutely  under 
the  control  of  the  Secretary  of  the  Xavy,  and  he  could  r.ay  what  ships 
could  be  spared  from  the  Navy,  and  he  could  say  when  they  wanted 
them  back  again. 

Mr.  Humphrey.  I  understand  there  are  quite  a  good  many  now — 
quite  a  number  which  could  be  spared  if  operated  as  economically  as 
the  ordinary  merchant  ship. 

Mr.  Curry.  That  ought  to  be  done,  don't  you  think? 

Mr.  Humphrey.  It  is  a  question  for  the  Navy  to  decide.  They 
have  the  control  of  them. 

Mr.  Hadley.  He  has  asked  your  attitude  in  reference  to  the  ques- 
tion as  he  put  it.  Now,  suppose — -the  section  providing  for  a  corpora- 
tion and  for  the  Government  to  take  stock  (which  is  referred  to  as 
the  Government-ownership  provision,  whether  it  be  that  or  not) 
should  be  eliminated  and  a  provision  was  retained,  as  Mr.  Curry  sug- 
gests, for  naval  auxiliaries  and  appropriation  made  for  an  investment 
of  that  kind,  and  also  limited  to  the  leasing  by  the  Government  of 


SHIPPING  BOARD,  NAVAL  AUXILIAEY,  AND  MEECHANT  MARINE.      743 

those  auxiliaries  in  times  of  peace,  with  certain  requirements  of  serv- 
ice and,  instead  of  Government  operation,  to  provide  for  their  opera- 
tion by  lessees,  and  if  they  could  not  be  found  to  be  operated  by  the 
Government,  so  that  they  would  not  necessarily  be  absolutely  tied 
up,  how  would  that  provision  in  a  bill  be  regarded  by  you  ? 

Mr.  Humphrey.  I  think  that  would  be  better  than  Government 
ownership.  As  I  said,  Mr.  Curry,  before  you  came  in,  we  had  some 
experience  out  at  Seattle  with  Government  ownership  with  the  trans- 

f)orts  there.  We  got  one  old  transport  and  it  kept  running  and  we 
ost  seven  merchant  ships.  Had  we  kept  that  one  Government- 
owned  ship  out  probably  we  could  have  kept  the  others  running. 

The  Chairman.  Have  you  read  this  bill,  Mr.  Humphrey? 

Mr.  Humphrey.  Yes.  I  understand  it  is  not  the  purpose,  at  least 
from  reading  Secretary  McAdoo's  statement,  for  them  to  operate 
except  as  the  last  extremity,  although  I  think  there  is  still  a  provi- 
sion  

The  Chairman.  Section  8  provides  that  in  cases  where  private  enter- 
prise will  not  utilize  these  ships,  to  open  up  trade  to  American  com- 
merce, that  the  Government  may  open  up  a  line.  But  the  prime 
purpose  of  the  bill  is  for  the  Government  to  expend  this  money  in 
the  building  of  ships  to  be  leased  or  chartered  to  private  parties  to 
be  operated  in  these  trades  that  will  facilitate  the  extension  of  our 
foreign  commerce.  That  is  the  prime  purpose.  There  is  this  reserve 
power  in  the  Government  that  if  there  are  trades  where  it  is  desired 
to  open  up  our  commerce  and  where  the  field  is  not  sufhciently 
inviting  for  private  capital,  then  the  Government  may  establish  a 
Ime  or  put  on  tramps.  Now,  that  is  it:  it  is  reduced  to  a  minimum. 
And  if  that  provision  were  out  of  the  bill,  the  question  is  whether  or 
not  the  people  who  might  want  to  charter  these  ships  would  not  take 
advantage  of  the  Government  and  say,  "  We  will  take  the  ships,  but 
we  wiU  take  them  at  our  own  price." 

Mr.  Humphrey.  I  imagine  if  this  bill  was  enacted  and  judging 
partly  from  what  Secretary  McAdoo  said,  that  if  they  had  any  ships 
available  on  the  Pacific  one  of  the  first  things  they  would  do  would 
be  to  start  a  line  from  San  Francisco  and  Seattle  across  the  Pacific. 
There  are  no  American  ships  there,  and  if  they  started  running,  I 
doubt  whether  they  would  ever  come  back  again. 

Mr.  Curry.  You  take  that  as  a  foregone  conclusion,  that  that  is 
what  would  be  done.  Of  course  I  do  not  believe  in  the  Government 
entering  into  business  in  competition  with  its  citizens  and  driving 
them  out  of  business.  I  believe  the  business  of  the  Government  is  to 
govern;  but  when  the  Government  can  run  a  business  for  the  benefit 
of  all  of  its  citizens  better  than  an  individual  that  is  a  different  propo- 
sition; and  here  is  the  position  that  confronts  us  particularly  on  the 
Pacific — the  Japanese  lines  give  preferential  duties  to  their  own  peo- 
ple, as  you  know. 

Mr.  Humphrey.  I  know  it. 

Mr.  Curry.  These  subsidized  Japanese  lines,  and  even  the  tramps, 
are  not  permitted  to  raise  the  freight  rates  to  Japanese  exporters  and 
importers,  but  they  can  make  all  the  mone}'  they  please  out  of  ;70u 
or  me  or  anyone  else  who  has  goods  to  ship.  That  is  the  condition 
we  have  on  the  Pacific  at  the  present  time. 

Mr.  Humphrey.  Will  you  permit  me,  right  at  that  place,  to  call 
your  attention  to  the  fact  that  on  October  16,  1915,  that  very  thing 


744      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MAEINF. 

was  done.  Japan  ordered  a  general  advance  on  cargoes  and  products 
from  all  ports  here.  Tlie  rates  from  Japan  to  the  United  States  con- 
tinue as  they  are,  but  the  new  rates  are  S9  a  thousand  feet  on  lumber 
from  Washington  and  $7  from  Manila,  and  an  advance  on  flour  ot 
S5.58  a  barrel  and  $6  from  Manila. 

Ml'.  Curry.  That  is  practically  the  same  as  the  condition  in  Great 
Britain.  There  is  very  little  rise  in  the  rates  on  exports  from  Great 
Britain  but  a  great  deal  on  imports. 

Mr.  Humphrey.  Yes. 

Mr.  Curry.  Suppose  that  this  bill  was  changed  S3  as  to  provide  for 
$50,000,000  worth  of  naval  auxiUaries,  and  those  auxiliaries  to  be 
built  in  such  manner  that  they  could  be  used  as  freight  ships:  what 
harm  would  there  be,  when  they  were  not  doing  anything  else,  in 
putting  them  in  the  over-sea  trade  from  Seattle  or  San  Francisco 
to  go  over  to  Japan  and  to  give  the  American  exporter  a  chance? 
Of  course,  I  do  not  mean  putting  them  into  that  business,  to  the 
detriment  of  an  American  line,  and  keeping  them  in  that  business  in 
perpetuity,  but  to  relieve  a  condition  like  the  present:  those  sliips 
to  be  absolutely  under  the  control  of  the  Secretary  of  the  Nav}',  but 
at  the  time  when  they  were  not  used  for  naval  purposes,  the  Secretary 
of  the  Navy  can  say  to  this  shipping  board,  ''You  can  have  this,  that, 
or  the  other  ship,  to  put  into  any  trade  you  think  would  be  beneficial 
to  the  American  exporter  and  importer,"  and  they  could  be  used  in 
that  way  in  lines  not  now  adequately  served  and  to  be  recalled  by 
the  Secretary  of  the  Navy  at  any  time  wlien  he  wanted  back  those 
ships  for  the  use  of  the  Navy.  Do  you  think  tliat  would  be  a  bad 
proposition  ? 

Mr.  Humphrey.  I  am  not  going  to  admit  the  premises  of  your 
proposition,  that  the  conditions  on  the  Pacific  are  to  remain  as  they 
arc.  If  we  are  to  abandon  tlie  idea  that  the  American  flag  can  ever 
be  placed  back  on  the  ocean  again,  except  by  Government  ownership, 
then  I  think  I  agree  with  3^ou. 

Mr.  Curry.  No;  I  think  you  must  have  forgotten  my  first  state- 
ment of  four  or  five  minutes  ago,  that  this  is  to  meet  a  condition  that 
exists  to-day,  not  a  permanent  proposition.  If  there  is  an  American 
line  running  or  an  American  line  put  into  the  trade,  why,  we  would 
take  these  off. 

Mr.  Humphrey.  Oh,  if  we  had  the  ships  already  constructed  and 
it  was  an  emergency  proposition,  under  conditions  such  as  we  have 
now,  I  would  see  no  objection  to  running  them.  But  the  objection  I 
have  to  this  proposition,  Mr.  Curry,  is  in  the  first  place  it  is  wholly 
indefinite  and  uncertain.  You  do  not  know  what  you  are  going  to 
do;  you  simply  ask  in  this  bill  to  appropriate  $50,000,000  for  some 
board  to  go  to  work  and  do  something  with  it. 

Mr.  Curry.  That  is  one  of  my  objections  to  the  bill. 

Mr.  Humphrey.  Under  this  proposition,  we  all  know  that  political 
influence  will  appear  immediately.  Suppose  you  have  these  vessels, 
where  arc  you  going  to  run  them  l 

Mr.  Curry.  Give  tliem  to  me  and  I  will  run  them. 

Mr.  Humphrey.  You  will  have  New  York  and  San  Francisco 
thinking  they  ought  to  have  them,  and  New  Orleans  will  wnnt  them 
and  Seattle  will  think  they  ought  to  have  theirs. 

Mr.  Edmonds.  As  long  as  you  do  not  raise  any  objection,  give 
them  to  Philadelphia.     You  do  not  seem  to  object  to  Philadelphia. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      745 

Mr.  Hr.MPHKEY.  Yes;  give  them  all  to  one  place.  The  trouble 
with  this  thing  is  you  are  going  to  scatter  them  around,  to  take  what 
you  can  ])uikl  with  the  $50,000,000  and  scatter  them  around  all  over 
the  country,  and  you  will  just  have  enough  to  discourage  private 
enterprise  and  do  no  good. 

Mr.  Curry.  A  couple  of  those  ships  could  be  built  at  Bremerton 
veiy  easily,  and  a  couple  at  Mare  Island,  and  used  to  relieve  the  ship- 
ping coriditions  on  the  Pacific. 

I  am  opposed  to  Government  ownership  of  our  merchant  marine 
just  as  strongly  as  vou  are. 

Mr.  Humphrey.  1  think  wo  agree  on  that. 

Mr.  Loud.  This  bill  provides  there  is  to  be  a  commission  of  five, 
and  two  of  that  commission  will  be  cabinet  officers.  Would  you  favor 
putting  cabinet  officers  on  such  a  commission? 

Mr.  Humphrey.  No;  I  would  not.  Because  the  average  cabinet 
officer  is  just  what  he  ought  to  be;  he  is  a  good  man  for  that  place, 
and  usually  a  politician,  and  he  ought  to  be;  but  he  does  not  usually 
know  very  much  about  business.  From  what  I  have  known  of  cabi- 
net officers  since  I  have  been  liere,  they  have  little  knowledge  of  busi- 
ness. And  if  they  are  going  into  business  they  ought  to  be  divorced 
from  politics.     But  that  is  a  minor  consideration. 

Mr.  IIadley.  I  do  not  think  you  got  the  full  force  of  my  question 
as  to  whether  your  objection  would  go  to  the  leasing  of  auxiliaries  as 
against  Goverimient  ownership. 

Mr.  IIiMPiiKEY.  I  think  that  would  be  much  preferable. 

Mr.  Hadley.  In  leasing,  in  case  a  lessee  could  not  be  found,  then 
for  the  Government  to  be  free  to  operate,  because  private  parties 
would  not  bo  interested. 

Mr.  Humphrey.  I  will  tell  you  why,  Mr.  Hadley,  I  think  leasing 
would  be  far  preferable,  because  my  experience  has  been,  and  that 
has  been  in  shipping,  too,  as  well  as  other  matters,  that  it  costs  a  great 
deal  more  for  the  Government  to  operate  vessels  or  do  almost  any 
other  kuid  of  business,  except  where  it  is  a  natural  monopoly,  like 
our  city  water  or  city  lights;  and  I  had  that  illustrated  in  rcgr^rd  to 
the  transport  service.  I  had  a  thorough  investigation  made  of  that 
and  had  a  committee  appointed  to  investigate  it  when  I  first  came 
down  here.  They  carried  passengers  for  S.  dollar  a  head,  and  they 
credited  themselves  with  what  the  private  lines  charged  for  carrying 
them,  so  that  the  more  people  they  carried  for  nothing  the  more 
money  they  made.  That  was  exactly  what  it  demonstrated;  but  it 
showed  in  going  through  the  books  that  it  was  costing  the  Govern- 
ment aU  the  way  from  25  to  50  per  cent  more  to  get  the  same  v/ork 
done  than  it  could  be  done  for  b}"  a  private  line;  and  yet  we  could 
not  stop  it.  Secretary  of  War  Root,  I  think,  ordered  part  of  them 
stopped  at  one  time  and  wanted  to  sell  them,  but  it  caused  a  great 
uproar,  just  as  you  would  have  now  from  the  Army  officers  and  all  the 
men  connected  with  that  department,  if  you  wanted  to  discontinue 
them. 

Mr.  Greene.  I  was  talking  with  you  about  the  length  of  vessels 
that  can  come  through  the  WeUand  Locks.  I  am  informed  that  no 
vessel  over  236  feet  in  length  can  come  through  those  locks.  And  if 
vessels  were  built  of  a  greater  length  on  the  Lakes  they  would  have 
to  be  cut  in  two  and  put  together  at  Montreal  and  taken  through  in 
separate  parts. 


746      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARIN C. 

The  Chairman.  That  is  the  way  they  build  them  and  that  is  the 
way  they  get  them  throiigh.     It  is  entirely  practicable. 

Mr.  Humphrey.  They  do  get  some  of  them  through.  Some  of 
them  on  our  coast  were  brought  through. 

Mr.  Greene.  But  they  have  to  be  taken  in  pieces  and  then  put 
together. 

Mr.  Humphrey.  Yes. 

Mr.  RoAVE.  But  they  are  only  brought  through  in  extreme  times; 
in  times  like  these  when  there  is  a  demand  for  steamers  and  you  can 
not  get  them. 

The  Chairman.  Oh,  no.  I  do  not  think  that  is  correct.  I  think 
for  several  years  past  they  have  been  doing  that. 

Mr.  Greene.  Can  you  produce  the  evidence  of  their  doing  that  to 
any  great  extent  ? 

Mr.  Loud.  It  is  only  a  very  rare  and  occasional  thing  it  is  done. 

The  Chairman.  I  do  not  know  to  what  extent,  but  I  have  heard 
of  it. 

Mr.  Loud.  It  is  only  at  times  when  a  very  large  price  can  be  ob- 
tained for  the  ship  that  they  will  do  that  thing  to  it. 

Mr.  Greene.  That  is  what  I  would  like  to  know.  I  do  not  know 
whether  Mr.  Humphrey  knows,  but  if  the  chairman  has  the  informa- 
tion I  would  like  to  have  it. 

The  Chairman.  Mr.  Duff  made  a  statemont  to  me  about  that. 

Mr.  Edwin  H.  Duff.  Mr.  Chairman,  the  only  information  I  have 
about  it  is  that  I  was  negotiating  during  the  past  six  months  for  a 
steamer  to  be  brought  through  the  Welland  Canal,  and  we  had  a  price 
of  about  $23,000  for  cutting  her  apart  and  rejoining  her  at  Montreal. 
It  was  perfectly  practicable  to  do  it.  The  total  cost  of  the  vessel  was 
something  under  $300,000.  So  that  was  only  about  10  per  cent  of 
the  total  cost  of  the  vessel. 

The  Chairman.  But  if  the  vessel  was  built  in  the  first  instance 
with  a  view  of  cutting  it  up  or  building  it  in  sections  and  then  taking 
it  through  the  canal,  that  would  eliminate  part  of  that  cost,  would 
it  not? 

Mr.  Duff.  If  it  was  contemplated,  yes.  This  was  a  vessel  already 
constructed  and  sold  for  use  on  the  Atlantic  coast,  and  they  had  to 
cut  her  apart  and  then  ta  join  it  together  at  Montreal. 

The  Chairman.  But  if  they  were  built  in  the  first  instance  with  a 
view  of  taking  them  througli,  and  they  were  built  in  sections  and  then 
rebuilt  at  Montreal,  that  woulel  reduce  the  cost? 

Mr.  Duff.  That  would  materially  reduce  the  cost;  yes,  sir. 

Mr.  Greene.  I  would  like  to  submit  the  following  to  be  printed 
in  the  record: 

To  the  Maine  State  Board  of  Trade: 

Your  committee  on  merchant  marine  has  considered  the  maritime  questions  and 
before  the  country  and  begs  leave  to  report: 

It  indorses  the  declaration  of  the  United  States  Chamber  of  Commerce  that  it  would 
be  a  mistake  for  the  Government  to  enter  the  shipping  business;  particularly  at  this 
time  when  every  available  merchant  sliip  is  in  operation  throughout  the  world  and 
every  American  shipyard  is  being  worked  to  its  greatest  capacity  in  an  effort  to  meet 
the  demands  of  private  capital  for  more  vessels.  Your  committee  calls  attention  to 
the  following  facts: 

1.  More  merchant  tonnage  is  now  building  in  the  United  States  than  at  any  other 
time  in  the  history  of  the  country. 

2.  War  conditions  have  made  it  possible  at  this  time  to  build  ships  in  the  United 
States  as  cheaply  as  they  can  be  built  anywhere. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINS.      747 

3.  The  wholesale  building  of  vessels  made  possible  by  the  present  unprecedented 
demand,  and  the  development  resulting  therefrom,  together  with  the  higher  wages 
which  workmen  in  foreign  shipyards  now  receive  and  will  continue  to  demand  for 
some  years  at  least,  give  promise  that  the  America*!  shipbuilder  may  be  able  to  con- 
tinue his  successful  competition  with  foreign  yards  even  after  the  end  of  the  European 
war.  Therefore  there  certainly  is  not  now,  and  possibly  there  never  will  be,  any 
substantial  reason  for  tlu-eatening  the  owners  of  American  ships  with  legislative 
changes  which  may  mean  a  serious  disturbance  of  our  coastwise  carrying  trade. 

4.  The  extended  testimony  recently  taken  by  the  shipping  committee  of  Congress, 
testimony  exhibiting  all  varieties  of  opinion,  is  in  absolute  agreement  on  the  one 
point  that  to  retain  and  build  up  American  trade  in  foreign  countries  American  ships 
are  necessary. 

5.  The  difference  in  the  cost  of  operating  a  ship  under  the  American  flag  and  one 
under  the  foreign  flag  has  been  greatly  reduced;  and  it  is  the  testimony  of  Secretary 
Redfield  that  this  former  great  handicap  of  American  ship  operators  will  be  further 
reduced  and  may  entirely  disappear. 

Wherefore  your  committee  is  of  the  opinion  that  there  is  no  call  for  radical  action 
at  this  time;  that  private  capital  now  so  actively  engaged  in  creating  a  fleet  of  Amer- 
ican-built vessels  shovUd  not  be  hampered  in  its  work  by  the  threat  of  Government 
competition;  and  that  when  the  new  conditions  of  ocean  transportation  which  will 
surely  become  manifest  when  the  merchant  fleets  of  the  world  resume  their  peaceful 
service,  have  become  known  and  understood,  then  the  Government  should  ascertain 
what,  if  any,  unfair  advantages  foreign  shipowners  still  retain  over  their  American 
competitors,  and  enact  such  legislation  as  may  enable  American  shipyards  to  continue 
in  operation  and  Americans  to  send  their  products  abroad  under  the  American  flag. 
Respectfully  submitted. 

Edward  C.  Plummer, 
Fritz  H.  Jordan, 
Henry  Lord, 

Committee. 

Mr,  RowE.  I  would  like  to  have  printed  in  the  record  the  following 
resolution  received  from  the  Maritime  Exchange  of  New  York: 

Maritime  Association  of  the  Port  of  New  York, 

Ne-w  York  City,  March  15,  1916. 
Hon.  Frederick  W.  Rowe, 

Committee  on  the  Merchant  Marine  and  Fisheries, 

House  of  Representatives,  Washington,  D.  C. 
Dear  Sir:  I  beg  to  hand  you  herewith  resolutions  adopted  by  the  board  of  direc- 
tors of  the  Maritime  Association  of  the  Port  of  New  York  at  a  regular  monthly  meeting 
held  on  the  8th  instant,  viz: 

Whereas,  legislation  has  again  been  proposed  in  Congress  (H.  R.  10500)  which  pro- 
vides in  effect  for  Government  ownership  and  operation  of  merchant  vessels, 
including  the  regulation  of  rates  to  be  charged  by  all  corporations,  firms,  and  indi- 
viduals engaged  as  common  carriers  between  ports  of  the  United  States  and  between 
the  United  States  and  foreign  ports  and  its  Territorial  possessions,  and  further 
providing  for  the  licensing  of  all  such  operators  before  they  shall  be  permitted  to 
engage  in  trade:  Therefore  be  it 

Resolved,  That  the  Maritime  Association  of  the  Port  of  New  York  reaffirms  its 
previous  action  in  opposition  to  the  principle  of  a  Government  ownership  and  opera- 
tion as  applied  to  the  merchant  marine,  believing  it  to  be  not  only  impracticable 
but  ineffectual  to  achieA'e  the  ends  sought,  for  the  following  reasons: 

1.  The  number  of  vessels  which  it  would  be  possible  to  obtain  either  by  building, 
charter,  or  purchase  within  the  limits  of  the  appropriation  contemplated,  would 
not  be  sufficient  to  appreciably  affect  present  existing  conditions,  even  if  such  vessels 
could  be  promptly  secured.  In  view  of  the  position  taken  by  belligerent  nations 
regarding  the  transfer  of  their  ships,  and  the  crowded  condition  of  American  ship- 
yards, there  would  appear  to  be  no  vessels  available  for  the  Government  to  secure 
at  this  time.  It  is  apparent,  therefore,  that  by  the  tim.e  a  sufficient  nuro.ber  of  vessels 
could  be  acquired  to  carry  out  the  plan  proposed,  normal  conditions  ft  ill  undoubtedly 
prevail,  and  the  Government  will  find  itself  with  a  large  amount  of  vessel  property 
on  its  hands  for  which  it  will  have  no  use  except  in  direct  competition  with  the 
owners  and  operators  of  American  vessels,  who  would  be  unable  to  operate  their 
ships  in  cojnpetition  with  a  Government  line  in  which  the  items  of  interest,  depre- 
ciation, and  insm-ance,  and  the  necessity  for  making  a  profit,  or  at  least  me'^ting 
expenses,  were  not  taken  into  consideration. 


748      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

2.  That  the  regulation  of  rates  as  contemplated  could  have  but  one  result — to  place 
our  foreign  carrying  trade  solely  in  the  hands  of  foreign  competing  vessels,  over  which 
the  proposed  shipping  board  could  exercise  no  control.  An  advantage  would  thus 
be  gained  by,  our  competitors  which  would  force  our  vessels  to  withdraw  from  the 
trade,  and  the  shippers  would  face  conditions  which  would  be  a  serious  handicap 
in  the  conduct  of  their  business,  and  which  in  the  case  of  the  smaller  shipper  would  be 
practically  prohibitive. 

Further,  our  shippers  would  be  placed  at  a  serious  disadvantage  in  competition  with 
foreign  shippers,  in  that  the  latter  would  necessarily  know  the  freight  rate  on  which 
our  shippers  had  to  figure  to  do  business,  and  consequently  they,  with  the  aid  of  a 
foreign  government  subsidized  line,  would  be  able  to  compete  successfully. 

Further,  the  law  of  supply  and  demand  has  always  been  the  best  regulator  of  rates. 

3.  It  is  apparent  that  the  experienced  shipping  men  throughout  the  country,  from 
their  intimate  knowledge  of  shipping  affairs  as  a  result  of  years  of  application  and  a 
careful  study  of  the  particular  needs  of  various  trades,  should  be  in  the  very  best 
position  to  accurately  forecast  the  effects  of  the  legislation  proposed,  and  they  are 
practically  unanimous  in  their  opinion  as  to  the  futility  of  the  proposition  as  an  aid 
to  the  upbuilding  of  an  American  merchant  marine  or  as  an  incentive  to  the  extension 
of  our  foreign  trade.  On  the  other  hand,  they  believe  that  any  attempt  by  the  Gov- 
ernment to  engage  in  the  shipping  business  would  so  hamper  and  discourage  present 
owners  and  operators  of  American  ships  that  they  would  be  compelled  to  withdraw 
from  trade;  it  would  mean  the  loss  of  a  large  amount  of  capital  which  has  been  invested 
in  good  faith  by  the  American  ship  owner,  often  in  the  face  of  most  discouraging  con- 
ditions and  burdensome  legislation. 

4.  We  believe  it  would  be  most  undesirable  that  the  Secretary  of  the  Navy  and 
the  Secretary  of  Commerce  should  be  named  as  members  of  a  board  such  as  is  pro- 
posed, for  the  reason  that  these  gentlemen  have  such  a  multiplicity  of  affairs  in  con- 
nection with  their  respective  departments  requiring  their  constant  attention,  that 
they  would  be  unable  to  devote  sufficient  time  to  the  affairs  of  the  shipping  board, 
that  would  enable  them  to  acquire  that  thorough  and  comprehensive  knowledge  of 
shipping  affairs  which  a  member  of  such  a  board  should  possess. 

5.  It  is  apparent  that,  in  view  of  the  large  orders  that  have  been  placed  by  American 
shipowners  within  the  past  year  for  the  construction  of  vessels,  which  orders  are  now 
taxing  American  shipyards  to  their  utmost  capacity,  that  there  is  no  hesitation  on 
the  part  of  our  people  to  invest  in  vessel  property  when  a  fair  return  on  the  invest- 
ment is  promised,  all  of  which  we  believe  should  receive  due  consideration  in  con- 
gressional councils  and  result  in  the  enactment  of  legislation  which  will  lessen  the 
difficulties  mth  which  American  shipowners  have  long  contended  in  competition  for 
the  foreign  trade. 

Further,  that  while  all  shipbuilding  plants  have  contracted  for  practically  all  of 
the  vessels  they  can  build  within  the  next  two  years,  many  other  vessels  would  have 
been  contracted  for,  for  later  delivery,  liad  it  not  been  for  the  possibility  of  unfavor- 
able legislation,  niakiug  it  difficult  to  secure  sufficient  capital  to  build  these  vessels, 
and  in  many  instances  causing  the  prospective  owners  to  discontinue  their  negotiations. 

6.  The  ^laritime  Association  of  the  Fort  of  New  York,  comprising  in  its  member- 
ship representatives  of  practically  all  interests  identified  with  shipping  at  this  port. 
resj)ectfully  urges  that  legislation  inimi<  al  to  our  shipping  interests  such  as  proposed 
in  H.  R.  10500  })e  not  enacted,  and  respectfully  submits  that  the  present  situation 
as  regards  shipping  facilities  will  in  no  wise  be  improved  by  the  entrance  of  Govern- 
ment ownership,  which  we  consider  an  extremely  dangerous  experiment,  the  effect 
of  which  will  be  disastrous  to  our  merchant  marine  and  detrimental  to  the  interests 
of  the  country  at  large. 

Very  respectfully,  yours, 

J.  B.  MoRRELL,  President. 
Attest: 

Jos.  M.  DowD,  Secretary. 

The  Chairman.  I  have  several  communications  which  I  will  place 
in  the  record.  The  first  is  a  communication  from  the  Mobile  (Ala.) 
Chamber  of  Commerce  and  Business  League  to  the  President  of  the 
United  States,  indorsing  the  shipping  bill. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      749 


Mobile  Chamber  op  Commerce  and  Business  League, 

Mobile,  Ala.,  February  24,  1916. 
Hon.  WooDROw  Wilson, 

President  United  States  of  America, 

Washington,  D.  C. 
Dear  Sir:  At  a  meeting  of  the  general  membership  of  the  Mobile  Chamber  of  Com- 
merce and  Business  League,  held  Monday,  February  21,  a  resolution  was  passed 
indorsing  the  plan  of  the  administration  promoting  American  merchant  marine.  The 
resolution  is  in  accordance  with  the  bill  introduced  in  Congress  by  Representative 
Alexander.  We  take  pleasure  in  advising  you  to  this  effect. 
Yours,  re^ectfully. 

Mobile  Chamber  of  Commerce  and  Business  League. 
By  E.  M.  Bailey,  President. 

Xlso  copy  of  circulnr  letter  from  the  Commissioner  of  Navigation  to 
collectors  of  customs,  showing  why  more  foreign  ships  are  not  taking 
out  American  registers : 

Department  of  Commerce, 
Bureau  op  Navigation, 

Washington,  January  22,  1916. 
( 'ollrctor  of  customs. 

Sir:  In  the  past  11  moiiihs  leading  maritime  nations  possessing  over  three-fourths 
of  the  world's  merchant  shipping  under  foreign  flags  have  passed  laws  or  issued  decrees 
forbidding  their  citizens  or  subjects  to  sell  and  transfer  to  the  flag  of  another  nation 
any  merchant  ship  under  their  respective  flags  except  by  a  special  permit  from  the 
(TO\ernment.  Great  Britain  enacted  such  a  law  on  February  12;  Austria-Hungary 
issued  such  a  decree  on  August  27;  Denmark  on  October  8;  Germany  enacted  such  a 
law  on  October  21,  France  on  November  11;  Norway  issued  a  decree  on  December  6; 
Brazil  on  December  9;  and  Spain  ])romulgated  a  law  on  January  9,  1916.  The  mer- 
chant shipping  of  these  countries  aggregates  33,900,000  gross  tons  out  of  a  total  of 
43,370,000  gross  tons  of  all  foreign  nations.  Other  nations  may  promidgate  similar 
laws  or  decrees  for  the  duration  of  the  war,  and  notice  of  such  laws  or  decrees  may  not 
1)0  received  in  this  countrv  until  after  they  have  taken  effect. 

The  Bureau  of  Navigation  suggests  that  prospective  American  purchasers  of  ships 
under  foreign  flags  ^\•ith  a  ^•iew  to  American  registry  vdU  consult  their  ovm  interest  in 
a  clear  title  if  in  all  cases  they  acquaint  themselves  with  the  transfer  law  of  the  nation 
Avhose  flag  the  shi]i,  jiroposed  to  be  bought,  now  flies. 
Please  bring  the  subject  to  the  notice  of  those  concerned. 
Respectfully, 

E.  T.  Chamberlain,  Commissioner. 

Also  a  list  of  foreign  built  vessels  prepared  by  the  Commissioner  of 
Navigation  to  which  American  registers  have  been  granted  under  the 
act  of  August  18,  1914,  up  to  March  21,  1916;  also  list  of  American 
vessels  sold  to  foreignei-s  from  September  1,  1914,  to  March  21,  1916: 


Foreign-built  vessels  admitted  to  American  registry  under  the  act  of  Aug.  18,  1914- 


Official 
No. 

Signal 
letters. 

212529 

LDNS.... 

212543 

LDNV . . . 

212925 

LDPF.... 

212565 

LDPJ.... 

212566 

LDPK... 

212568 
212569 

LDPM... 
LDPN... 

212570 
212571 
212572 

LDPQ... 
LDPR... 
LDPS... 

Name  of  vessel. 


Oceana'  a 

Moldegaard ' 

Windrush' 

Tivives i 

Trinidadian' 


Roseway  2 

Santa  Rosalia  2. 


Transferred  to  Spanish 
32910—16 48 


Kentra  ^ 

Bantu  2 

Crofton  Hall  K.. 

flag. 


Gross 
tons. 

When 
buUt. 

7,796 

1891 

2,852 

1906 

1,531 

1891 

5,017 

1911 

2,450 

1892 

291 
5409 

1907 
1811 

4,682 
4,188 
5,773 

1906 
1901 
1913 

Present  owner. 


Morse  Dry  Dock  & 
Repair  Co. 

Bull-Insular  Steam- 
ship Co, 

Shepard  &  Morse 
Lumber  Co. 

Tivives  Steamship 
Corporation. 

Gulf  Refinmg  Co 


F.H.Farwell 

Unitfd    States    Steel 
Products  Co. 

do 

do 

do 


Home  port. 


Passenger  vessel.  2  Freight  vessel. 


New  York,  N.Y. 

Wilmington, 

Del. 
Boston,  Mass. 

New  York,  N.Y. 

Port        Arthur, 
Tex. 
Do. 

New  York,  N.Y 

Do. 
Do. 
Do. 

» Tanl:er. 


750      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 
Foreign-built  vessels  admitted  to  American  registry  under  the  act  of  Aug.  18,  1914 — Coatd. 


Official 
No. 


212573 

212786 

212747 
212853 
212S86 
212693 
212583 

212584 

212585 

212587 

0) 

212592 

212596 

212597 

212600 
212710 

212601 
212603 

212604 

212605 

212606 

213488 

212612 

212613 
212646 

212970 

212627 
212628 

212632 

212633 

212634 

212635 

212641 
212642 
212647 

212649 

212650 

212648 

212651 

212652 

212653 


Signal 
letters. 


Rig. 


LDPT... 

LDPV.... 

LDPW... 
LDQB... 
LDQC... 
LDQF... 
LDQG... 

LDQH... 

LDQJ.... 

LDQK... 

LDQM... 

LDQX... 

LDQF... 

LDQR... 

LDQS.... 
LDQT.... 

LDQV... 
LDQW... 

LDRB... 

LDRC... 

LDRF... 

LDRH... 

LDRJ.... 

LDRK... 
LDRM... 

LDRN... 

LDRQ... 
LDRS.... 

LDRT... 

LDRV... 

LDRW... 

LDSB.... 

LDSC... 
LDSF.... 
LDSG.... 

LDSH.... 

LDSJ.... 

LDSK.... 

LDSM.... 

LDSN.... 

LDSP.... 


Bark. 
St.s.. 


St.s. 
St.s. 
St.s. 
St.s. 
St.s. 

St.s. 

St.s. 

St.s. 

St.s. 

St.s. 

St.s. 

St.s. 


Sch. 
St.s 


St.s., 
St.s., 

St.s., 

St.s. 

St.s. 

Ship. 

St.s. 


Bun 

St.s 


Bark 

St.s. 
St.s. 

St.s. 

St.s. 

St.s. 

St.s. 

St.s. 
St.s. 
Sch.. 


St.s. 
St.s. 
St.s. 
St.s. 
St.s. 
St.s. 


Name  ol  vessel. 


Annie  M.  Reid '. 

San  Francisco '.. 

Buenaventura  '. 
Charlton  Hall' . . 
CrasterHall  '... 
Howie'.;  Hall'... 
Zacapa2 


Cartago  2 

Sixaola^ 

Brabant  3 

FoxtonHall*.. 

Limon  ' 

Pannco  '■> 


Pinar  del  Rio 


C.V,'.  Mills'.. 
Suriname  2 


Brin'Ji!la3. 
Turialha  2. 


Metapan'... 
Heredia^.. . 
Esparta '. . . 

Avon ' 

Abangarez^. 


E.R.  Sterling «. 
Coppename  2. . . 

Snowdon  ' 


Platurias 

C.A.Canfields. 


Parismina. 
Almirante  ■ 
Atenas  2... 
San  Jose  1 . 


Motanos 

Caloria3 

Louise  M.  Rich 

ard.' 
Marowijne  2  ■ 


Saramacca  2. . 
Norman  Bridge  3 
Santa  Marta  2 

Carillo' 

Pastores* 


Gross 
tons. 


When 
built. 


2,165 

5,102 

4,881 
4,749 
4,319 
4,922 
5,012 

4,937 

5,017 

2,773 

4,246 

3,297 

2,556 

2,504 

371 
3,274 

4,170 
4,952 

5,011 

4,943 

3,297 

1,573 

4,954 

2  577 
3,181 

1,111 

3,445 
6,350 

4,937 

5,010 

4,961 

3,296 

2, 7.'?0 

4,095 

441 


1892 

1914 

1913 
1907 
1909 
1910 
1909 

1908 

1911 

1890 

1902 

1904 

1888 

1895 

1904 
1908 

1894 
1909 

1909 

1908 

1904 

1884 

1909 

1883 
1908 

1877 

1892 
1913 

1908 

1909 

1909 

1904 

1890 
1906 
1906 


Present  owner. 


James  Rolph,  jr. 


United    States    Steel 

Products  Co. 

do 

do 

do 

do 

Zacapa        Steamship 

Corporation. 
Cartago       Steamship 

Corporation. 
Slxaola       Steamship 

Corporation. 
TheTe-xasCo 


3, 191 

1908 

3,283 

1908 

4,288 

1913 

5,013 

1909 

5,012 

1911 

7,781 

1912 

United    States    £  teel 

Products  Co. 
Limon        Steamship 

Corporation. 
Freeport  &  Tampico 

Fuel  Oil  Transpor- 
tation Coiporation. 
Ameriean    i^-    e  nban 

Steamship         Line 

(Inc.), 
John  George  Mui'phy. . 
Suriname    Steamship 

Corporation. 

Standard  Oil  Co 

Turialha     Steamship 

Corporation. 
Metapan     Steamship 

Corporation, 
Heredia      Steamship 

Corporation, 
Esparta      Steamship 

Corporation. 
Avon    Shipping    Co. 

(IJIC), 

Abangarez  Steamship 

Corporation. 

Sterling  Ship  Co 

Coppename  Steamship 

Corporation. 
Snowdon       Shipping 

Co.  (Inc.). 

Standard  Oil  Co 

Petroleum  Transport 

Co. 
Parismina  Steamship 

Corporation. 
Almirante  Steamship 

Corporation. 
A  1 1  e  n  a  s  Steamship 

Corporation. 
San    Jose    Steamship 

Corporation. 

Standard  Oil  Co 

do 

Ernest  H.  Richard 

Marowijne  Steamship 
Corporation. 

Saramacca  Steamship 
Corporation. 

Petroleum  Transport 
Co. 

Santa  Marta  Steam- 
ship Corporation. 

Carillo  Steamship  Cor- 
poration, 

Pastoies  Steamship 
Corporation. 


Home  port. 


'  Freight  vessel. 

2  Passenger  vessel. 

3  Tanker. 

*  Provisional  register  through  American  consul. 

5  Freight  vessel.    Foxton  Hall  burned  at  Watling  Island,  Bahamas,  Sept.  23, 

8  Freight  vessel.    Formerly  barkentine  Everett  G.  Griggs. 

'  Vessel  foundered  Aug.  14-15, 1915,  oil  coast  of  Yucatan, 


San      Francisco, 

Cal. 
yew  York,  N.Y. 

Do. 
Do. 
Do. 
Do. 
Do. 

Do. 

Do. 

Port       Arthur, 

Tex. 
New  York,  N.Y. 

Do. 

Do. 

Do. 

Mobile,  Ala. 
yew  Yon  ,X.Y. 

Do. 
Do. 

Do. 

Do. 

Do. 

Boston,  Mass. 

XewYork,"N.Y. 

Seattle,  Wash. 
New  York,  N.Y. 

Boston,  Mass. 

New  York,  N.Y. 
Los  Angeles,  Cal. 

New  York, "K.Y. 

Do. 

Do. 

Do. 

Do. 
Do. 
Gulfport,  Miss. 

New  York,  N.  Y. 

Do 
Los  Angeles,  Cal. 
New  York,  N.Y. 

Do. 

Do. 


1914. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      751 
Foreign-built  vessels  admitted  to  American  registry  under  the  act  of  Aug.  18,  1914 — Contd. 


Official 
No. 


212654 

212655 

212656 

212657 
212658 

212671 

212672 

212673 
212675 
212798 

212682 
212683 

212688 

212694 
212C95 
212697 

212698 
212701 
212702 


212821 
212716 

212725 

212726 

212728 
212738 
212744 

212917 

212762 
212766 
212859 

212782 
212852 
212787 

212790 

213023 
212S80 
212841 
212810 
213029 
213098 
212822 
212825 
212828 


Signal 
letters. 


LDSQ.... 

LDSR.... 

LDST.... 

LDSV.... 
LDSW... 

LDTB... 

LDTC... 

LDTF.... 
LDTG... 
LDTJ.... 

LDTK... 
LDTM... 

LDTN... 

LDTP.... 
LDTQ... 
LDTR... 

LDTS.... 
LUTV... 
LDTW... 

LDVB... 


LDVC... 
LDVF... 

LDVJ.... 

LDVK... 

LDVM... 
LDVP... 
LDPC... 

LDVQ... 

LDVS.... 
LDVT... 
LDWH.. 

LDWJ... 
LDWK.. 
LDWM.. 

LDWP... 

LDWQ... 
LDWS... 
LDWT... 
LDWV... 
LFBC... 
LFBD... 
LFBG... 
LFBK... 
LFBM... 


Rig. 


St.  s 

St.  s 

Ship 

Ship.... 
Ship.... 

St.  s 

Sch.  b... 


Name  of  vessel. 


Gross 
tons. 


When 
built. 


Present  owner. 


Calamares  i . 
Tenadores.. 
Brynhilda  -. 


Pass  of  Balmaha^ 
Rhine  2 


Orleanian  i 

Vera  Cruz  2  3.. 


Sch.  b...    Tampico2  4. 

St.s 1  Wieos 

St.  s !  Dochra2.... 


St.  s Llama  ss 

St.s I  Edward  L.  Do- 

heny.5 
St.s I  Sacramento 


Sch.  b...i  Tiixpam  2  o 

Sch.  b...l  Panuco  2  a 

St.s Herbert  G.Wy- 

I      lie.5 

Bkn Skoda  2 

Bark i  I'ilsrim  - ' 

Ship Timandra2. 

St.s 


St.s. 
St.s. 


Bark.... 

St.s 


Santa  Clara  ■ 


Javary  2 

Charles  E.  Har- 

wood.5 
Anna  Maria 

D'Abundo.2 
Greenbrier  28..., 


Sch W.  H.Baxter29.. 

Bkn i  Stranger2 

St.s ;  Robert  Dollar  2 . 

St.s !  Westwego  5  10. .. 


Bkn. 

St.s. 
St.  s. 

St.s. 
St.  s. 
Ship. 


St.s.... 


Ship.. 
St.s.. 
St.s.. 
Sch.. 
St.s.. 
St.s.. 
Ship. 
St.s.. 
Bark. 


St.  Paul  2 10. 

Gushing  = 

Colusa  1 


Oregon  2 

Cacique  2 

Vmcent  212. 

Mundale  2. . 


Dunsyre  2 

Baton  Rouge  ' 

Bay  way  » 

Delta2 

Petrolite= 

Coming  ^ 

Poltalloch  2 15 

Gargoyle  s 

Edna  M.Smith 2  H 


7,782 

7,782 

1,502 

1,571 
1,690 

2,29S 

1,934 

1,994 
2,748 
4,309 

3,189 
6,170 

5,692 

869 

646 

4,292 

744 
1,629 
1,579 

2,584 

1,249 
3,178 

954 

3, 331 

399 

640 

5,356 

5,275 

471 
6,894 
5,732 

727 
6,202 
1,904 

3,285 

2,149 
4,973 
5,083 

317 
3,710 
5,073 
2,253 
4,433 

816 


1913 

1913 

1885 

1888 
1896 

1880 

1884 

1900 

1888 
1906 

1890 
1913 

1900 

1881 
1868 
1912 

1893 
1893 

1885 

1896 

1898 
1913 

1903 

1893 

1893 
1893 
1911 


1890 
1903 
1913 

1890 
1910 
1894 

1906 

1891 
1913 
1913 
1892 
1894 
1913 
1893 
1902 
1903 


Calamares  Steamship 

Corporation. 
Tenadores  Steamship 

Corporation. 
Harby  Steamship  Co. 

(Inc.). 

....do 

Rhine    Shipping   Co. 

(Inc.). 
R.    Lawrence   Smith 

(Inc.). 
The  Texas  Co 


....do 

Standard  Oil  Co 

La   Plata   Steamship 

Co.  (Inc.). 

Standard  Oil  Co 

Petroleum  Transport 

Co. 
Northern  &  Southern 

Steamship  Co. 

Cuba  Distilling  Co 

do 

Petroleum  Transport 

Co. 

Charles  S.  Rodden 

Pil{,Tim  Shippinf:  Co . . 
Timandra     Shipping 

Co. 
American    &    Cuban 

Steamship     Line 

(Inc.). 
L.  C.  Gil  espie  &  Sons. 
Petroleuim  Transport 

Co. 
Mclntyre  Lumber  & 

Export  Co. 
Coast  Steamship  Co . . . 


J.  C.  Peterson 

Edward  L.  Whitney.. 
Dollar  Steamship  Line 


Union  Petroleum 

Steamship  Co. 
George  J.  Santa  Cruz.. 

Standard  Oil  Co 

W.  R.  Grace  &  Co 


Home  port. 


Andrew  Olsen 

W.  R.  Grace  &  Co 

Harby  Steamship  Co. 

(Inc.). 
Munson  Steamship 

Line. 
Eschen  &  Minor  Co. . . 

Standard  Oil  Co 

do 


A.  F.Dantzler 

Standard  Oil  Co 

do 

Eschen  &  Minor  Co. . . 

Vacuum  Oil  Co 

Alfred  L.  Staples 


1  Passenger  vessel. 

2  Freight  vessel. 

s  Formerly  sch.  b.  Glenlui. 

*  Formerly  sch.  b.  France  Marie. 

6  Tanker. 

6  Stranded  Oct.  29,  1915,  Westray  Firth,  Scotland. 

'  Vessel  abandoned  at  sea,  Dec.  15,  1914,  lat.  68°  N.,  long.  37°  W, 

8  Vessel  sunk  by  striking  mine,  North  Sea^  Apr.  2,  1915. 

9  Vessel  stranded,  Habana  Harbor,  Cuba,'  Jan.  22, 1915. 
to  Formerly  st.  s.  Steaua  Romana. 


New  York, N.Y. 

Do. 

Do. 

Do. 
Boston,  Mass. 

New  York,  N.Y. 

Port  Arthur, 
Tex. 
Do. 

New  Yor;c,  N.  Y. 
Do. 

Do. 
Los  Angeles,  Cal. 

San     Francisco, 

Cal. 
New  York,  N.Y. 

Do. 
Los  Angeles,  Cal. 

Mobile,  Ala. 
Boston,  Mass. 
Do. 

New  York,  N.Y. 


Do. 
Los  Angeles,  Cal. 

Mobile,  Ala. 

Wilmington, 

Del. 
Gulfport,  Miss. 
Mobile,  Ala. 
San     Francisco, 

Cal. 
Philadelphia,  Pa. 

Mobile,  Ala. 
New  York,  N.Y. 
San     Francisco 

Cal. 
New  York,  N.Y 

Do. 

Do. 

Do. 

San  Frai; Cisco. 
New  York. 

Do. 
Gulfport,  Miss. 
New  York. 

Do. 
San  Francisco. 
New  York. 
Mobile,  Ala. 


a  Transferred  to  Cuban  flag 


752      SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Foreign-built  vessels  admitted  to  American  registry  under  the  act  of  Aug.  18, 1914 — Contd. 


Official 
No. 

Signal 
letters. 

Rig. 

Name  of  vessel. 

Gross 
tons. 

When 
buUt. 

Present  owner. 

Home  port. 

212833 
212835 

LFBP.... 
LFBQ . . . 
LFBR. . . 

LFBS.... 
LFBT.... 
LFBV... 

LFCB.... 
LFCD.... 
LFCG.... 
LFCH.... 

LFCJ.... 
LFCK.... 
LFCM.... 

LFCN.... 
LFCP.... 

LFCR.... 
LFCT...; 
LFCV.... 

LFCW... 
LFDB... 
LFDC... 
LFDG... 
LFDH... 
LFDK... 

LFDM... 

LFDS.... 
LFDT... 

LFDW... 

LFGB.... 

LFGH... 
LFGJ.... 
LFGK... 

LFGM... 
LFGN... 
LFGP.... 
LFGR... 

LFGS.... 
LFGT.... 
LFGV.... 
LFHD... 
LFHT... 

KWTM.. 
LFHR... 
LFJD.... 
LFJG  ... 
LFDJ.... 
LFJH.... 
LFJK.... 

LFJM.... 

LFJN.... 

St.  s.... 
St.  s.... 
St.s.... 

St.  s.... 

St.s 

St.s.... 

Bkn.... 

St.s 

St.s.... 
St.  s 

St.s.... 
St.s.... 
St.s.... 

St.s.... 
St.s.... 

St.s 

St.s.... 
St.s.... 

St.s.... 
St.s.... 

St.  s 

St.s.... 

St.s 

St.s.... 

St.s.... 

St.s 

St.s.... 

St.s.... 

St.s 

Bark.... 

St.s 

St.s 

St.s 

St.  s 

St.  y.... 
Sell 

St.s 

Sch 

Ship 

St.s 

St.s 

St.  v.... 
Bark. . . . 
St.  y.... 

St.s 

St.s 

St.s 

St.s 

St.s 

Ga.  y... 

Princeton  ' 

Somerset ' 

Maracas2 

Georgiana  ^ 

Caddo  1 

5,081 
5,079 
2,925 

4,596 
6,329 
4,204 

939 
6,268 
1,352 
3,296 

3,544 
6,395 
4,170 

4,216 
1,.530 

5,335 
6,303 
3,490 

7,318 
4,045 
5,075 
7,574 
4,046 
3,671 

3,190 

4,374 
3,652 

615 

3,292 

1,528 

4,360 

593 

449 

7,129 

426 

779 

7,224 
461 
2,340 
2,265 
3,143 

602 
1,057 

397 
2,333 
6,766 
10,073 
3,402 

3,535 

22 

1912 
1913 

1887 

1909 
1912 
1901 

1891 
1902 
1883 
1898 

1900 
1912 
1906 

1890 
1892 

1907 
1908 
1906 

1902 
1913 
1913 
1896 
1914 
1903 

1914 

1907 
1904 

1901 

1910 

1891 
1912 
1896 

1905 
1913 
1907 
1892 

1913 
1904 

1888 
1893 
1890 

1907 
1873 
1898 
1893 
1914 
1914 
1892 

1894 

1909 

Standard  Oil  Co 

do  

New  York. 
Do 

212839 

212840 
212945 

New  York  Trans-At- 
lantic Steamship  Co. 

Walker  &  Armstrong. . 

Standard  Oil  Co 

New  York  &  Oriental 
Steamship  Co.  (Inc.) 

George  Taber  Hav 

Standard  Oil  Co.". 

I.  A.  Alessi 

Do. 

Savannah,  Ga. 
New  York. 

212922 

212871 
212872 
212873 

Satsuma  ^ 

Lovisas  * 

DeSotoi 

Neptune  ^  = 

Baj-amo « 

Daeia3fi 

Chinchas 

Southerner  3 

M.S. Dollars  «.. 
Colon  -  a 

Dayton  i 

Bradford  i 

Santiago  ■* 

Coalinga ' 

Moreni ' 

Do. 

Do. 
Do. 
Do 

212888 

212890 
212892 
212893 

212897 
212899 

213095 
213126 

New    York    &    Cuba 
Mail  Steamship  Co. 

Edward  N.  Breitung.. 

W.  R.Grace  &  Co.... 

Walker,  Armstrong  & 
Co. 

Dollar  Steamship  Line 

American-M  e  x  i  c  a  n 
Steamship  &  Trad- 
Co. 

Standard  Oil  Co 

do 

Do. 

Marquette,  Mich. 
New  York. 
Savannah,  Ga. 

San  Francisco. 
San  Diego,  Cal. 

New  York. 
Do. 

212909 

212911 
212912 

New    York    &    Cuba 

Mail  Steamship  Co. 

Union  Steamship  Co. . 

Standard  Oil  Co 

..  ..do  

Do. 

San  Francisco. 
New  York. 

212913 

Pioneer  ' 

California  '■> 

Polarine  i 

Camaguey  '■> 

Munwood  ^ 

Suruga  3 

Antilla^ 

Balbca  ■ 

Guantanamo^... 

Belmont  ^ 

Evangeline  2 

Benito  Juarez  2.. 

Sonora 

Do. 

212914 
212916 
212919 

212924 

212935 
212936 

212944 

212946 

212949 
212951 
213252 

John  A.  Hooper 

Standard  Oil  Co 

New    York    &    Cuba 
Mail  Steamship  Co. 

Munson  Steamship 
Line. 

Barber  &  Co.  (Inc.)... 

New    York    &    Cuba 
Mail  Steamship  Co. 

American-M  e  .x  i  c  a  n 
Steamship  &  Trad- 
ing Co. 

New   York    &    Cuba 
Mail  Steamship  Co. 

Hall  Shipping  Co 

Evangelme  Co.  (Inc.). 

American-M  e  x  i  c  a  n 
Steamship  &  Trad- 
ing Co. 

San  Francisco. 
New  Yor!c. 
Do. 

Do. 

Do. 
Do. 

San  Diego,  Cal. 

New  York. 

Boston. 
Do. 
San  Diego,  Cal. 

Do. 

212964 
212974 

Ardmore  ' 

Owera  8 

Standard  Oil  Co 

Peter  G.  Gerry 

Cowles  Ship  Supply 
Co. 

Standard  Oil  Co 

Bessie  A.  Somerville.. 

James  Rolph,  jr 

Pierce  Oil  Corporation. 

Housatonic      Steam- 
ship Co.  (Inc.). 

Charles  W.  Harkness. . 

Peter  H.  Crowell 

John  H.  Hanan 

Sun  Co 

New  York. 
Providence,  R.  I 

212982 

212984 
212985 
213770 
213022 
213094 

213125 
213090 
213277 

Gypsum     Em- 
press.3 

Muskogee  ' 

Hieronymus  ^ . . . 
Golden  Gates... 

Mexicano ' 

Housatonic^ 

Agawa8,9 

Ruth  Stark  3. . . . 
Surfs 

Mobile,  Ala. 

New  York. 
Pensacola,  Fla. 
San  Francisco. 
New  York. 
Do. 

Do. 

Boston. 
New  York. 

213282 

Atlantic  Sun  ■>... 

Matiaieock  ' 

Standard  i 

Sarnias 

Philadelphia. 
New  York. 
Do. 

213157 
212154 

Standard  Oil  Co 

do 

213170 

Sarnia  Steamship  Cor- 
poration. 

Sibiria  Steamship  Cor- 
poration. 

Nathaniel  H.  Stone, 
trustee,    614    Sears 
Building. 

Do. 

213171 

Sibirias 

Do. 

213173 

Kitty  AS 

Boston. 

1  Tanker. 

2  Passenger  vessel. 

3  Freight  vessel. 

*  Stranded  off  St.  Thomas  Island,  Dutch  West  Indies,  Feb.  28, 1915. 

*  Formerly  St.  s.  Evelyn. 

6  Vessel  seized  by  French  Government  May  3,  1915;  sunk  by  submarine  Nov.  8, 1915. 
»  Provisional  register  through  American  consul. 

8  Pleasure  vessel. 

9  Formerly  American-owned  undocumented  yacht. 
a  Transferred  to  British  flag. 


SHIPPING  BOAED,  NAVAL  AUXILIAEY,  AND  MERCHANT  MAEINE.      753 
Foreign-built  vessels  admiUed  io  American  registry  under  the  act  of  Aug.  18, 1914 — Contd. 


Official 
No. 


213270 
213305 
2133fi9 
213407 
213443 
213528 

(') 

213628 
213696 
213621 

213201 

213659 

213660 

213661 

213697 

213604 
213590 
213610 

213636 

213646 

(•*) 
213706 

213743 
213762 

(») 
(?) 

213893 
213890 
213896 

{^) 

0) 

(") 


Signal 
letters. 


LFJW... 
LFKH.. 
LFKR.. 
LFKS... 
LFMB.. 
LFMV.. 

LFNB... 

LFNC... 
LFND.. 

LFMG.. 

LFJQ... 

LFNJ... 

LFNK.. 

LFNM.. 

LFNR.. 

LFNT... 
KWTB.. 


LFPG.... 

LFPJ.... 
LFPK... 
I.FPQ.... 

LFQO... 
LFQR... 
LFQT.... 
LFQV... 


LFRM. 
LFSJ... 
LFSK.. 
T,VSVI.. 
LFSN.. 


I/FSP. 
LFSQ. 


Rig. 


Bkn... 
Bkn.v. 
Ga.  s.. 

St.  s.. 
Bark. . 

St.  s... 

St.  s... 

St.  s... 
St.  s... 
St.  s... 

St.  s... 

St.  s... 

St.  s... 

St.  s... 

St.  s... 

Sch.  b. 
St.  y.. 
Ga.  y. 

St.s. 

Sch... 
St.  s. . . 

St.  s. . . 

St.s... 
St.  s. . . 
St.s... 
St.s... 

St.s... 
St.  V . . 
Ship.. 
Bark.. 
St.  s.. 

St.  s.. 
St.  s.. 


Name  of  vessel. 


Hildegard  ' 

Altai 

Glenpool  2 

Communipaw  2. 

Paolina  1 

Winnebago  ' . . . 

Solveig  1 


622 
1,381 
5,459 
3,710 
1,337 
4,362 

4,409 

3,718 
3,826 
4,471 

3,300 

2,892 


Maumee 2,556 

Winneconne  1 . . . '  1, 869 

Ausablei '  3,153 

1 
Prins  Valdemar  I    1.338 
Ca.'Jiana^  * 1,227 


Kankanee  > . , 
AUa^uash  '.. 
Manitowoc  1. 

San  Mateo ' . 

Genesee  ■ 


Gross 
tons. 


Ycndys  *... 
Muskegon  • . 


Albania '.. 
Yucatan  1 . 
Hocking  1 . 


Edna ' 

-Amazonia  ' . . . 

Repu1)!ic  1 

Constitucion2. 


Healdton . . 
liemlik  *... 
ICatherine  '. 
I'hyllis'... 
Venezula  .. 


Colombia 
Ecuador . 


3,321 

257 

751 

2,553 

1,783 
2,199 
3,932 
3,358 

4, 4,S9 
405 
2, 202 
2,217 
5,641 

5,644 
5,688 


When 
built. 


1876 
1900 
1913 
1913 
1900 
1900 

1901 

1899 
1905 
1902 


1900 


1907 

1901 

1892 
1908 
1908 


1905 
1896 
1895 

1903 
1891 
1907 
1899 

1908 
1903 
1887 
1886 
1915 

1915 
1915 


Present  owner. 


George  J.  Santa  Cruz. . 

Barkentine  Alta  Co 

Standard  Oil  Co 

do 

Edward  L.  Whitney.. 

Winnebago  Steamship 
Corporation. 

American    Trans-At- 
lantic Co. 

do 

do 

Manitowoc  Steamship 
Corporation. 

San  Mateo  Steamship 
Corporation. 

American    Trans- At- 
lantic Co. 

Maumee    Steamship 
Corporation. 

Winneconne     Steam- 
ship Corporation. 

A  merican    Trans- At- 
lantic Co. 

G.  W.  McNear(Inc.).. 

Edward  L.  Doheny... 

Irving  J.  Bissel 


Home  port. 


American  Transatlan- 
tic Co. 

Wm.  Willard  Howard. 

J.  W.  Jolly 

American  Transatlan- 
tic Co. 

Sudden  .t  Ohristenson 

Lawrence  Smith  (Inc.) 

John  A.  Hooper 

Caribbean  A:  Southern 
Steam.ship  Co.  (Inc.). 

Standard  Oil  Co 

Willis  Sharpe  Kilmer. . 

Pacific  Freighters  Co. . 

do 

Pacific  Mail  Steam- 
ship Co. 

do 

do 


Mobile. 

San  Francisco. 

New  York. 

Do. 
Mobile. 
New  York. 

Do. 

Do. 
Do. 
Do. 
Do. 
Do. 

Do. 

Do. 

Do. 

Do. 

San  Francisco. 
Los  Angeles,  Cal. 
Grand    Haven, 

Mich. 
New  York. 

Do. 
Philadelphia. 
N'ew  York. 

San  Friincisco. 

New  Y-.rk. 
San  Fr.nxisco. 


New  York.N.Y. 

Do. 
San  Francisco. 

Do. 
New  York,  N.  Y. 

Do. 
Do. 


Gross 
tons. 


Total  fiscal  year  ended  June  30, 1915 
Total  July  1,  1915,  to  Mar.  21,  1916.. 

Grand  total.  Mar.  21, 1916 


1  Freight  vessel. 

2  Tanker. 

3  Provisional  register  through  American  consul. 
<  Pleasure  vessel. 

6  Formerly  American-owned  undocumented  yacht. 


754      SHIPPING  BOAED,  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE 

American  vessels  sold  alien  during  the  period  Sept.  1,  1914,  to  Feb.  1,  1916. 
SEPT.  1,  1914,  TO  JUNE  30,  1915. 


Name  of  vessel. 


SAILING  VESSELS. 

Arthur  D.  Story 

Cecilia  Sudden 

Gossip 

Hunter 

Independence  II 

J.  B.  Newland 

John  D.  Bradley 

Olga 

C^uickstep 

Willie  L.  Swift 

Rosefield 

Total  (11) 

STEAM  VESSELS. 

E.  M.  Peck 

H.  N. Jex 

James  H.  Shigley 

SAILING  VESSELS. 

Alice 

B.  L.  Pennington 

City  of  Sheboygan 

Essex 

J.  M.  Weatherwax 

Mary  A .  Whalen 

Moravia 

Tacoma 

Fifi 

Graziela 

Panuca 

Tuxpam 

lona  Tunnell 

White  Wings 

Total  (14) 

STEAM  VESSELS. 

Case 

Delhi 

Sparling 

Toledo 

South  American 


Gross 
tons. 


10.3 
643 
122 
197 
14.5 
157 
112 
113 
104 
100 

685 


2,481 


1,809 
420 
459 


Transferred 
to- 


British  flag. 

Do. 

Do. 

Do. 

Do. 

Do. 

Do. 

Do. 

Do. 
Dominican 

flag. 
Spanish  flag. 


British ; 
Do. 
Do. 


Name  of  vessel. 


STEAM  VESSELS— continued 

Mariska , 

William  Henry  Mack , 

Crescent ". 

Forward 

Total  (7) 

UNKIGGED  VESSELS. 

Dredger 

Standard 

No.2 

Chicken 

M.  B.Co.  No.  14 

T 

U 

V 

Total  (8) 


Gross 
tons. 


2,325 

3,781 

239 

255 


9,288 


159 
114 
205 
142 
269 
343 
343 
343 


1,918 


Transferred 
to- 


British  fli 
Do. 

Mexican  I 
Do. 


British  flag. 

Do. 
Cuban  flag. 
Mexican  flag. 

Do. 

Do. 

Do. 

Do. 


JULY  1,  1915,  TO  FEB.  1,  1916. 


648 


7,510 


100 

British  flag. 

1,142 

Do. 

248 

Do. 

116 

Do. 

384 

Do. 

134 

Do. 

1,067 

Do. 

105 

Do. 

368 

Cuban  flag. 

368 

Do. 

646 

Do. 

869 

Do. 

1,315 

Portuguese 

Do. 


278 

British  flag. 

986 

Do. 

109 

Do. 

211 

Chilean  flag 

276 

Cuban  flag. 

STEAM  VESSELS— continued. 
Success 

308 
2,481 

727 
2,094 
7,796 

Morris  Adler 

N  0  r  w  e  gian 

Oregon 

Atlanta 

Mexican  flag. 
Spanish  flag. 

Oceana -  -     

Total  (10).. 

17,266 

:ls. 

GAS  VESSI 

Pinta 

100 
281 

British  flag. 
H  0  n  d  u  r  an 

Advance --  

flag. 

Total  (2)... 

381 

:SSELS. 

No.2 

UNRIGGED  VI 

P.  S.  B.&D.Co 
Iron  Side 

119 
138 
142 

British  flag. 
Cuban  flag. 
Mexican  flag. 

Uxmal 

Total  (3)... 

399 

SUMMARY. 


Sept.1,1914,  to  June 
30, 1915. 

July  1,  1915,  to  Feb. 
1,  1916. 

Total. 

Number. 

Gross. 

Number. 

Gross. 

Number. 

Gross. 

Sailing 

U 

7 

2,481 
9,288 

14 
10 

■2 
3 

7, 510 

17,266 

381 

399 

25 
17 
2 
11 

9,991 

26, 554 

381 

Steam 

Gas 

Unrigged 

8 

1,918 

2,317 

Total 

20 

13  687               M 

25,556 

55 

39,243 

SHIPPING  BOARD,  NAVAL  AUXILIAEY,  AND  MERCHANT  MARINE.      755 


In  addition  to  the  foregoing  the  following-named  yachts  were  sold  alien: 

SEPT.  1,  1914,  TO  JUNE  30,  1915. 


Gross 
tons. 


Transferred  to- 


Steam  yacht  Nournahal 
Steam  yacht  Zoraya . . . 

Total  (2) 


768 
129 


Brazilian  fla 
British  flag. 


897 


JULY  1,  1915,  TO  FEB.  1,  1916. 


Steam  yacht  .Mameda 113     Mexican 

Steam  yacht  Cohimbia 682     British  flag 

Steam  yacht  Waturus 571  Do. 

Total  (3) 

Also  letter  from  Dr.  E.  E.  Pratt,  Chief  of  the  Bureau  of  Foreign 
and  Domestic  Commerce,  to  the  Secretary  of  Commerce,  giving 
extract  from  Commercial  Attache  Arnold's  weekly  report  regarding 
shipping  conditions  on  the  Pacific  coast: 

Department  op  Commerce," 
Bureau  of  Foreign  and  Domestic  Commerce, 

Washington,  February  23,  1916. 
The  Secretary  of  Commerce: 

It  is  thought  that  the  following  extract  from  Commercial  Attache  Arnold's  weekly- 
report  of  January  1,  1916,  on  the  shipping  situation  in  the  Pacific  will  be  of  interest, 
as  it  supplements  material  on  the  same  subject  which  has  been  previously  referred 
to  you: 

"I  have  had  a  number  of  interviews  during  the  week  with  Minister  Keinsch  in 
regard  to  possi})le  American  enterprise,  especially  construction  work,  w^hich  resulted 
in  his  sending  a  number  of  telegrams  to  interests  in  America  in  regard  thereto.  The 
unfortunate  situation  in  connection  with  possible  American  development  here  is  the 
shipping  question.  I  do  hope  the  bureau  and  the  department  will  use  every  possible 
effort  to  get  something  done  which  will  put  American  ships  under  American  flags  in 
the  Pacific.  It  is  sad,  indeed,  to  sit  here  and  see  our  opportunities  in  this  country 
vanishing  like  the  mist  before  the  morning  sun,  simply  because  we  have  no  ships  to 
work  these  opportunities.  Give  us  American  ships  on  the  Pacific  and  we  can  increase 
our  (  hina  trade  by  100  per  cent  and  make  for  ourselves  a  position  in  this  market 
during  the  war  from  which  it  will  be  impossible  to  dislodge  us  after  the  conclusion 
thereof.  But  without  ships  we  can  only  sit  by  and  sigh  and  we  see  these  marvelous 
opportunities  sliding  by,  probably  never  again  to  return:  at  least  not  in  the  same 
in\dting  way,  for  after  the  war  is  over  there  will  be  many  hungry  mouths  yearning 
for  a  chance  to  meet  these  opportunities,  and  on  that  account  we  will  not  be  in  a 
position  to  take  the  advantage  of  them  that  we  now  could.  We  want  ships,  ships, 
ships;  but  to  do  us  good,  the  greatest  good,  we  want  them  now.  A  year  hence  may 
be  too  late,  for  by  that  time  others  may  have  crept  in  ahead  of  us  and  taken  the  gold 
apple  of  opportunity  from  us.  It  is  indeed  unfortunate  that  the  American  flag  should 
have  been  withdrawn  from  the  Pacific  just  at  that  moment  when  its  presence  there 
could  have  meant  more  to  us  than  at  any  other  time  in  the  entire  history  of  our  trade 
with  the  Orient." 

E.  E.  Pratt. 


756      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


Also  a  letter  from  the  Secretary  of  the  Treasury,  giving  excerpt 
from  a  letter  from  Mr.  Daniel  Kelleher,  chairman  of  the  board  of  the 
Seattle  National  Bank,  in  reference  to  shippmg  lumber  on  the  Pacific 

coast: 

Treasury  Department, 

Washington,  February  24,  1916. 
Dear  Judge:  I  take  pleasure  in  sending  yoxi,  for  your  information,  the  folloAving 
excerpt  from  a  letter,  dated  February  18,  1916,  which  I  received  to-day  fn^m  Mr. 
Daniel  Kelleher,  chairman  of  the  board  of  the  Seattle  National  Bank,  of  Seattle,  Wash. : 
"Our  lumber  business,  though  we  are  getting  a  little  better  price  for  lumber  here, 
is  still  in  very  bad  shape,  and  as  I  wrote  you  before,  I  can't  see  any  chance  for  ma- 
terial improvement  until  we  get  by  some  means  some  ships  to  transi)ort  our  lumber 
in.  P'or  example,  a  case  came  under  my  observation  here  in  Seattle  to-day  that  is 
typical  of  the  bcal  .situation.  One  of  the  owners  of  a  mill,  a  customer  of  our  bank, 
i.s  to-day  loading  a  cargo  of  lumber  at  his  mill  for  shipment  to  Australia.  The  mill 
owner  gets  about  $24,000  for  his  lumber  delivered  to  the  dock  here;  this  is  at  the  rate 
of  about  $12  per  M  for  his  lumber.  The  shipowner  gets  for  transporting  this  lumber 
about  $48,000,  or  $24  per  M  for  the  lumber.  In  ordinary  times,  the  mill  owner  would 
get  about  $12  per  M  for  his  lumber,  and  the  sliip  owner  about  $8  per  M.  With  $16  per 
M  added  for  freight,  I  can  see  but  little  chance  for  improvment  in  the  lumber  busi- 
ness out  here.  This  same  ship  owner  who  gets  $48,000  for  this  one  cargo,  recently 
bought  his  ship  at  a  total  price  of  $15,000." 
Faithfully,  yours, 

W.  G.  McAdoo. 
Hon.  J.  W.  Alexander, 

House  of  Representatives. 

Also  a  clipping  from  the  United  States  Commerce  Reports  of  Feb- 
ruary 2,  1916,  entitled  "World  built  fewer  ships  last  year": 

[United  States  Commerce  Reports,  Feb.  2,  1916.] 

World  Built  Fewer  Ships  Last  Year. 

The  principal  features  of  the  world  shipbuilding  industry  all  through  1915  were  the 
reduced  output  in  the  combatant  countries  and  the  increased  activity  in  the  countries 
not  directly  ai^ected  by  the  war,  states  the  Glasgov/  (Scotland)  Herald  in  a  special 
shipbuilding,  engineering,  and  commercial  supplement.  These  changes  are  graphi- 
cally shown  by  the  table  below,  which  gives  the  international  tonnage  output  for  the 
past  two  years: 


Countries. 

1914 

1915 

Vessels. 

Tons. 

I.  H.  P. 

Vessels. 

Tons. 

I.  H.  P. 

817 
454 
23 

966,839 
508,945 
246,370 

639, 654 
540,290 
186.890 

298 

207 

12 

384, 417 

233, 501 

31,418 

310.574 

Scotland 

205. 288 

24. 732 

Total,  United  Kingdom 

1,294 
271 

1,722,154 
67,994 

1,366,834 
24,276 

517 
183 

649, 336 
32,937 

540,594 

British  Dominions 

14,072 

Foreign  countries: 

United  States  

156 
28 
16 
68 
39 
98 

184 
54 

164 

674 

67 

14 

9 

29 

270.962 

78, 457 

10,395 

16,664 

33. 463 

196, 540 

505.719 

41,792 

136,309 

279,584 

54, 108 

33, 976 

21.197 

14, 657 

306, 465 
58,300 
(1) 

12, 120 

19, 551 

203.630 

572.653 

35, 455 

125,614 

116,618 

39, 555 

61,000 

33,000 

13,760 

127 

270, 124 


322, 168 

Belgium 

China 

50 

40 

32 

46 

4 

127 

390 

86 

13 

33 

8,073 
61,361 
41,438 

179,804 
20,230 
92,213 

217,592 

61,477 

792 

14,306 

25,927 

6.  400 

Denmark 

32,042 

France 

20,950 

Germany 

188. 156 

Italy 

20.000 

Japan 

182,039 

Netherlands 

114.510 

Norway 

41,925 

Russia 

540 

Spain 

13, 750 

Sweden 

32.530 

Total,  foreign  countries 

1,600 

1,694,023 

2  1,597,721 

955 

989,337 

975,010 

Grand  total      

3,165 

3,484,171 

2, 988, 831 

1,655 

1,671,610 

1,529.676 

1  Data  not  available. 


*  Exclusive  of  Belgium. 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      757 

It  ia  a  fact  of  great  importance,  says  the  Herald,  that  although  the  shipbuilding 
and  engineering  figures  for  the  United  Kingdom  include  absolutely  no  warship  work, 
while  in  the  other  countries  referred  to  there  is  included  all  warship  work  reports  of 
which  have  been  received,  the  purely  British  production  is  larger  than  that  of  any 
other  countrj-.  It  need  scarcely  be  added  that  the  position  occupied  by  Germany 
in  this  list  is  probably  far  too  low,  as  its  figures  represent  very  little  more  than  the 
merchant  vessels,  reports  of  the  launching  of  which  have  been  received. 

MANY   ORDERS   ON   HAND   IN   OTHER   COUNTRIES. 

Evidence  of  the  extent  to  which  Scandinavian  shipyards  are  benefiting  by  the 
demand  for  cargo  steamers  may  be  found  in  the  large  amount  of  new  work  on  hand  in 
Denmark,  Norway,  and  Sweden.  At  Copenhagen  Burmeister  &  Wain  have  on  the 
stocks  6  vessels,  and  on  hand  further  a  number  of  orders  for  delivery  in  1917,  1918, 
1919,  and  1920,  and  even  1921  while  the  Copenhagen  Shipbuilding  Co.  has  9  steamers 
and  the  Marstal  Co.  4  motor  vessels. 

At  Christiana  the  Akers  Co.  is  building  9  steamers  and  the  Nylands  Co.  the  same 
number;  the  Bergen  Co.  have  16  vessels  on  order;  the  Drontheim  Co.,  7;  the  Fredrikstad 
Co.,  vessels  aggregating  48,220  tons;  the-Larvik  Slip  Co.,  3;  the  Laxevaags  Co.,  of 
Bergen,  6;  the  Moss  Co.,  5;  the  Porsgrund  Co.,  4;  the  Pusnses  Co.,  of  Arendal,  8;  and 
the  Stavanger  Co.,  3. 

In  Sweden  the  Eriksbergs  Co.,  of  Goteborg,  has  7  vessels  on  order;  the  Helsingborg 
Co.,  1;  the  Kockums  Co.,  of  Malmo,  1;  Lindholmens  Co.,  of  Goteborg,  4;  the  Lodose 
Wharf  Co.,  3:  the  Motala  Works,  3  tugs;  and  the  Oscarshamn  Works,  6  steamers. 

The  Sociedad  Espanola  de  Construccion  Naval,  of  Cartagena  and  Ferrol,  which  was 
started  a  nurnber  of  years  ago  by  a  British  syndicate  for  the  purpose  of  building  ships 
for  the  Spanish  Navy,  is  now  being  permitted  to  undertake  private  work,  and  has 
booked  a  number  of  orders  for  merchant  steamers.  A  beginning  is  being  made  at 
Ferrol,  where  the  firm  is  constructing  a  passenger  steamer  of  14,000  tons  displacement 
for  the  Cia.  Transatlantica  of  Barcelona. 

At  Hongkong  there  is  a  great  pressure  of  new  shipbuilding.  The  Hongkong  & 
Whampoa  Dock  Co.  has  on  hand  a  large  number  of  steamers  for  British.  Dutch,  and 
Norwegian  owners,  while  the  Taikoo  Dockyard  Co.  is  building  six  vessels,  three  of 
them  for  LiA^erpool  owners  and  three  for  China.  The  Taikoo  yard  can  now  under- 
take the  construction  of  vessels  up  to  10,000  tons  measurement. 

Tlie  majority  of  the  Japanese  shipyards  are  full  of  work,  and  they  will  be  kept  busy 
well  into  1917.  The  work  in  hand,  however,  does  not  show  anything  of  very  great 
size — nothing  over  9,500  tons.  The  number  which  is  to  be  built  rather  than  size  is 
what  is  most  impressive.  New  passenger  ships  are  conspicuous  by  their  absence,  and 
the  country  is  setting  itself  to  the  building  of  cargo  ships.  The  types  of  these  vary 
considerably.  Among  them  the  Isherwood  system  has  a  prominent  place.  The 
Osaka  Iron  Works  has  in  hand  six  8,000-ton  steamers  and  sixteen  3,200-ton  steamers, 
all  of  this  type.  Two  of  the  steamers  which  are  to  be  built  at  Nagasaki  are  to  have 
geared  turbines. 

Also  text  of  the  shipping  bill  recently  presented  in  the  French 
Chamber  of  Deputies : 

[Translation.] 

No.  1659.     Chamber  of  Deputies.     Eleventh  Legislature,  session  of  1916.     Written 

report  of  the  meeting  of  January  13,  1916. 
Propoced  law  determining  the  conditions  under  which  advances  may  be  made  to 

French  sliipowners  to  buy  ships  mechanically  propelled,  coming  from  allied  or  neutral 

countries. 

(Referred  to  the  merchant  marine  commission.) 

Presented  in  the  name  of  M.  Raymond  Poincare,  President  of  the  French  Republic, 
by  Rear  Admiral  Lacaze,  minister  of  the  navy,  and  by  M.  A.  Ribot,  minister  of 
finances. 

STATEMENT   OF    REASONS. 

Gentlemen:  The  increase  of  our  commercial  fleet  is  a  measure  which  should  not 
be  deferred. 

While  the  war  lasts,  we  have  an  opportunity  to  benefit  French  commerce  by  recover- 
ing, in  part,  the  heavy  tribute  which  we  are  now  paying  to  foreign  shipowners  in  the 
form  of  marine  freights. 

After  the  war  our  maritime  commerce  will  need  a  numl^er  of  ships  sufficient  to 
insure  a  continuation  of  the  ser-vices  heretofore  maintained  by  our  comj  anies  and 


758      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

to  make  possible  the  organization  of  new  lines.  It  is  on  this  condition  only  that  the 
economic  life  of  France  will  be  able  to  recover  and  to  create  large  resources  necessary 
for  the  work  of  national  rehabilitation. 

Our  ports  will  be  \dsited  by  a  larger  number  of  ships  from  now  on,  and  the  free 
play  of  economic  laws  will  tend  to  lower  the  freights.  Furthermore,  the  proportion 
of  French  tonnage  in  our  foreign  trade  will  be  larger,  and  action  by  the  Government, 
if  demanded  by  circumstances,  would  be  of  greater  effect  in  the  domain  of  transporta- 
tion. 

The  vicissitudes  of  war  have  reduced  the  effective  strength  of  our  merchant  fleet. 
The  strenuous  service  to  which  our  ships  have  been  subjected  since  August,  1914,  the 
re  suiting  we  ir  and  tear,  the  impossibility  of  reopening  our  shipyards  before  the  ter- 
mination of  hostilities,  all  this  compels,  us  if  we  would  be  ready  in  time,  to  obtain 
without  delay  a  number  of  ships  from  other  countries  to  replace  those  lost  and  to 
supplement  those  in  active  service. 

In  its  earnest  desire  to  improve  the  conditions  under  which  the  country  procures 
its  food  supply,  to  stop  the  waste  of  the  national  wealth,  and  to  secure  the  future  of 
0  ir  merchant  marine,  the  Government  has  examined  various  solutions  proposed. 
It  is  of  the  opinion  that  the  end  sought  can  only  be  achieved  by  encouraging  private 
initiative  and  giving  aid  to  shipo^vners  in  order  to  induce  them  to  buy  ships  in  allied 
or  neutral  countries. 

The  granting,  under  proper  guaranties,  of  1'  ans  repayable  in  annual  ir.stalments, 
and  the  determination  of  a  fixed  sum  to  be  paid  as  indemnity  in  case  a  ship  go  acquii'ed 
should  be  requisitioned  by  the  Government,  are  the  measures  which  will  best  meet 
the  y)resent  needs  of  the  shipowners.  There  seems  to  be  no  doubt  of  the  general 
utility  of  these  measures,  as  the  shipowner?  will  be  under  the  double  obligation  of 
k  'pping  the  ships  so  acquired  as  part  of  our  rarechant  fleet  for  five  years  at  least,  and 
ot  employing  them  in  the  French  import  trade  until  the  crisis  now  prevailing  in 
miritime  trans]>ortatic)n  shall  have  moderated. 

For  the  foregoing  reasons,  and  because  of  the  principles  adopted  by  the  Parliament 
to  favor  the  buying  of  British  prizes  (law  of  Apr.  19,  1915),  the  Government  has  been 
lei  to  submit  the  proposed  law,  the  substance  of  v^'hich  follows: 

PROPOSED   LAW. 

The  President  of  the  French  Republic  decrees: 

The  proposed  law,  the  text  of  which  folio v\'s,  will  be  presented  to  the  Chamber  of 
Deputies  by  the  minister  of  the  navy  and  by  the  minister  of  finances,  who  are  charged 
with  revealing  the  principles  and  sustaining  the  discussion: 

Article  1. 

Until  the  expiration  of  twelve  months  after  the  conclusion  of  peace  the  Govern- 
ment may  invest  a  sum  not  exceeding  100  million  francs  in  loans  to  French  ship- 
oY.'ners,  to  cover  a  part  of  the  sums  necessary  for  the  purchase  of  ships  with  mechanical 
propulsion,  said  shipowners  to  be  approved  of  by  the  minister  of  the  navy,  on  the 
advice  of  the  minister  of  finances.     Ships  to  be  allied  or  neutral. 

The  advances  thus  made  shall  be  productive  of  interest  at  the  rates  charged  by  the 
Bank  of  France  on  loans  on  securities. 

The  minister  of  finances  is  authorized  to  open,  among  the  special  services  of  the 
treasury,  an  account  entitled  "Advances  to  shipowners  to  buy  shii^s." 

This  account  will  be  debited  in  the  sum  total  of  advances  m.ade  in  conformity  with 
the  present  law  and  credited  with  the  repayments  made  by  the  shii:)owners. 

Article  2. 

The  maximum  amount  of  advances  made  according  to  the  first  article  is  determined 
iu  the  following  fashion: 

Navigation  companies  possessing  a  fleet  of  20,000  tons  or  more  may  receive  70  per 
cent  of  the  purchase  price. 

Navigation  com,panies  possessing  a  fleet  of  less  than  20,000  tons,  or  for  new  enter- 
prises, 80  per  cent  of  the  pm'chase  price. 

Article  3. 

The  advances  thus  made  shall  be  repayed  b}^  the  shipowners  according  to  the 
following  conditions: 

] .  In  three  equal  annual  installments  in  the  case  of  navigation  companies  possessing 
a  fleet  of  20,000  or  more  tons. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      759 

2.  In  four  annual  equal  installments  in  the  case  of  navigation  companies  possessing 
a  fleet  of  less  than  20,000  tons,  or  of  new  companies. 

3.  In  eight  annual  equal  installments  for  fisliing  enterprises. 

The  interest  falling  due  will  be  added  to  the  sum  total  of  each  of  the  above  annuities. 
The  first  annuity  in  each  case  will  be  payable  at  the  expiration  of  a  year  following 
the  date  of  the  delivery  of  the  ship  to  the  sliipowner. 

Article  4. 

Government  experts  shall  inspect  the  ships,  which  must  be  seaworthy  and  in  good 
condition  at  the  time  of  their  delivery  to  the  shipowners,  and  guaranteed  against  the 
consequence  of  any  preference  or  mortgage. 

Article  5. 

The  shipowner  who  wishes  to  be  admitted  as  a  beneficiary  under  the  provisions  of  the 
preceding  articles,  should  address  a  request  to  the  minister  of  the  navy. 

This  request  shall  be  accompanied: 

L  By  a  deed  of  surety  which  will  be  applied  to  the  sums  advanced  and  not  guaran- 
tsed  by  a  mortgage.     The  security  given  must  be  satisfactory  to  the  minister  of  finance. 

2.  By  an  agreement  made  by  the  shipowner  to  give  to  the  Government  of  France  a 
mortgage  (first\  on  the  ship  from  the  time  it  shall  come  under  French  registry,  as  surety 
a  sum  equal  to  half  the  price  of  purchase  and  to  insure,  with  delegation  of  benefit  to 
the  Government,  the  ship  against  all  risks,  inclusive  of  risk  of  war,  even  to  complete 
repayment  of  the  sum  advanced. 

Navigation  societies  which  have  established  an  insurance  fund  for  their  own  ships 
may  be  excused  by  a  special  decision  from  contracting  insurance  as  above  noted. 

The  surety,  whether  for  the  total  advances  having  a  mortgage  concession  on  the  ship 
acquired,  or  for  the  portion  of  the  advances  not  guaranteed  by  this  mortgage,  may  be 
replaced  by  a  mortgage  (first)  on  the  other  ships  of  the  shipowner. 

Once  agreed  uj^on.  he  will  abide  by  the  demands  in  the  order  of  their  reception.  All 
transfer  of  order  will  be  null  and  void. 

Article  6. 

The  shipowner  must  agree  to  pay  a  sum  equal  to  the  sum  total  of  the  purchase  price 
if,  in  the  course  of  the  present  war  and  during  a  period  of  five  years,  to  date  from  the 
signing  of  the  treaty  of  peace,  he  transfers  directly  to  a  stranger,  to  a  strange  society, 
or  to  a  French  society,  whose  organization  does  not  conform  to  article  I,  section  3,  of 
the  law  of  April  7.  1902,  either  the  property  itself,  or  the  use  of  the  purchased  ship,  or 
if  he  mortgages  it  for  the  profit  of  the  same  persons  or  societies. 

He  is  under  the  additional  obligation,  until  the  expiration  of  six  months  after  the 
conclusion  of  peace,  to  carry  imports  intended  for  French  ports  only,  though  one- 
fourth  of  the  cargo  may  be  carried  to  allied  or  neutral  countries,  or  to  pay  to  the  treasury 
a  sum  equal  to  double  the  sum  total  of  freights  collected  for  cargoes  unloaded  outside 
of  French  ports  over  and  above  the  proportion  fixed  above. 

The  same  obligation  m.ust  be  undertaken  by  the  fishing-boat  owners  and  the  owners 
of  tow  boats,  who  will  be  obliged,  the  first  to  bring  into  French  ports  three-quarters 
of  their  catch  and  the  second  to  make  at  least  three-quarters  of  their  voyages  coming 
from  or  proceeding  to  the  same  ports. 

These  agi-eements  will  be  guaranteed  by  security  satisfactory  to  the  minister  of 
finance. 

Article  7. 

In  the  event  of  requisition  of  one  of  the  ships  acquired  during  the  continuance  of 
the  present  law  the  indemnity  shall  be  determined  in  accordance  with  the  prevailing 
charter  rates,  reduced  by  15  per  cent. 

Article  8. 

A  decree  decided  upon  by  the  ministers  of  the  marine  and  of  finance  shall  determine 
the  conditions  under  which  the  present  law  shall  apply,  notably  those  relative  to 
the  age  of  the  ships  which  are  the  object  of  it. 
Signed  at  Paris,  January  13,  1916,  by 

R.  Poincare. 
For  the  President  of  the  Republic: 

Amiral  Lacaze, 
Minister  of  the  Marine. 

A.    RiBOT, 

Minister  of  Finances. 


760      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINK. 

Also  letter  from  Dr.  E.  E.  Pratt,  Chief  of  Bureau  of  Foreign  and 
Domestic  Commerce,  quoting  statement  in  the  Agence  Economique 
&  Financiere  of  February  5,  1916,  relative  to  the  freight  situation  in 

Italy: 

Department  of  Commerce, 
Bureau  of  Foreign  and  Domestic  Commerce, 

Washington,  February  26,  1916. 
lion.  Joshua  W.  Alexander, 

House  of  Representatives,  Washington,  D.  C. 

My  Dear  Congressman:  The  Agence  Economique  &  Financiere,  in  the  supple- 
ment to  its  issue  of  February  5,  1916,  a  copy  of  which  was  forwarded  to  the  bureau  by 
Commercial  Attache  Veditz,  at  Paris,  contains  the  following  statement  transmitted  by 
its  correspondents  in  Rome  and  Milan  relative  to  the  freight  situation  in  Italy: 

"Ocean  freight  rates  have  increased  greatly;  also  demands  upon  the  Government 
to  proceed  to  requisition  ships  and  to  create  a  special  department  for  the  merchant 
marine.  The  State  now  has  the  railroads,  why  should  it  not  temporarily  become  a  ship 
operator? 

"The  increase  in  the  cost  of  coal  and  grain  being  determined  almost  entirely  by  the 
supply  of  ships,  the  press  is  bringing  pressiu-e  to  bear  upon  the  Government  to  have 
England  put  at  the  entire  dit5poaal  of  Italy  the  largest  possible  number  of  ships.  The 
Chamber  of  Commerce  of  Milan,  discussing  this  all-important  question  in  a  special 
meeting,  has  expressed  the  Avish  that  negotiations  be  entered  into  quickly  with  the 
French  Government  mth  a  view  to  apphdng  the  urgent  remedies  which  the  situation 
demands. 

"The  noted  economist.  Senator  Maggiorino  Ferraris,  director  of  the  Nuova  Anto- 
logia,  has  sent  a  letter  to  the  press  in  which  he  urges  an  imxnediate  agreement  between 
Italy,  France,  and  England  for  the  establishment,  in  a  common  spirit  of  liberality 
andby  joint  regulations,  of  freight  rates  upon  the  basis  of  service  rendered.  He  also 
urged  the  intensive  utilization  of  the  maritine  resources  of  the  three  countries  under 
the  control  of  a  single  international  commission  and  the  reservation  of  ships  for  the 
most  urgent  needs  and  for  the  transportation  of  the  commodities  most  necessary  for 
the  use  of  the  armies  and  the  people  of  the  allied  nations." 

I  believe  that  the  above  item  may  be  of  some  interest  to  you  in  connection  with  the 
proposed  shipping  board. 

With  kind  regards,  I  am, 
Very  truly,  yours, 

E.  E.  Pratt,  Chief  of  Bureau. 

Also  clipping  from  United  States  Commerce  Reports  of  date  Feb- 
ruary 26,  1916,  entitled  'Toal  freights  from  Cardiff." 

[Commerce  Reports,  Feb.  26, 1916J 
COAL    FREIGHTS    FROM    CARDIFF. 

[Consul  Lorin  A.  Lathrop,  Cardiff,  Wales.] 

The  following  table  shows  the  coal  freights  per  ton  of  2,240  pounds  from  Cardiff, 
Wales,  in  the  first  week  of  February,  1916,  and  comparisons  with  those  in  December, 
1915,  and  Avith  prewar  rates: 


Port. 


Alexandria. . . 

Barcelona 

Bordeaux 

Buenos  Aires 
Genoa 


Febru- 

Decem- 

Average, I 

ary,  1916. 

ber,  1915. 

1914.     I 

$20.06 

$17.64 

$2.49  ' 

13.37 

9.97 

2.21  i 

8.49 

8.78 

1.36 

11.18 

10.94 

3.43 

14.59 

16.05 

2.15 

Port. 


Lisbon 

Marseille 

Montevideo 

Naples 

Rio  de  Janeiro. 


Febru- 

Decem- 

ary, 1916. 

ber,  1915. 

$8.02 

$7.90 

16.00 

14.66 

10.94 

9.60 

14.59 

16.05 

10.33 

10.45 

Average, 
1914. 


$1.51 
2.10 
3.29 
2.20 
3.40 


The  prices  for  coal  f .  o.  b.  Cardiff  per  ton  of  2,240  pounds  on  February  5,  1916,  were 
as  follows:  Admiralty  s-^conds,  $8.50;  best  drj^s.  $8.50;  black  veins,  $8.50;  best  house 
(at  pit  mouth),  $5.83;  best  small  steams,  $4.74;  briquets.  $7.78;  and  coke  (special 
foundry),  $11.55. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      761 

Also  a  letter  from  Hon.  Frank  L.  Polk,  Counselor  Department  of 
State,  to  the  Secretary  of  Commerce,  stating  the  President  of  Salva- 
dor desires  steamship  lines  to  be  established  between  the  ports  of  the 
United  States  and  ports  of  Salvador. 

Department  of  State, 

Washimiton,  January  17,  1916. 
The  Secretary  of  Commerce. 

Sir:  I  have  the  honor  to  inform  you  that  this  department  has  recently  been  in- 
formed by  Henry  F.  Tennant,  Esq",  charge  d'affaires  of  the  American  Legation  at 
San  Salvador,  that  the  President  of  Salvador  has  advised  him  that  the  Government 
of  that  country  desires  one  or  more  American  steamship  lines  to  be  estabUshed  between 
the  ports  of  the  United  States  and  the  ports  of  Salvador. 

The  President  of  Salvador  expresses  the  desire  that  American  stearnship  lines  be 
established  to  do  a  commercial  transport  business  between  the  Atlantic  and  Pacific 
ports  of  the  United  States  and  the  ports  of  Salvador  averaging  at  least  one  ship  per 
month  which  would  touch  directly  at  Acajutla  from  New  York  to  San  Francisco,  and 
vice  versa. 

I  have  the  honor  to  communicate  the  suggestion  of  the  President  of  Salvador  for 
such  recommendations  or  action  as  the  Department  of  Commerce  may  deem  appro- 
priate and  to  request  that  this  department  be  advised  from  time  to  time  of  the  results 
of  any  action  that  the  Department  of  Commerce  may  take  in  the  matter  in  order 
that  information  as  to  developments  may  be  communicated  in  turn  to  the  American 
Legation  in  Salvador  and  to  the  President  of  that  Republic. 

I  have  the  honor  to  be,  sir,  your  obedient  servant. 

For  the  Secretary  of  State : 

Frank  L.  Polk,  Counselur. 

Also  a  letter  from  the  Secretary  of  Commerce,  inclosing  a  letter 
from  the  Commissioner  of  Fisheries,  showing  that  large  bone  deposits 
on  the  Pribilof  Islands  can  not  be  utilized  because  of  lack  of  shipping 

facilities: 

Department  op  Commerce, 

Office  of  the  Secretary, 
Washington,  February  19,  1916. 

My  Dear  Mr.  Chairman:  Your  attention  is  invited  to  a  copy  of  an  identical  report 
presented  to  the  Chief  of  the  liureau  of  Soils  of  the  Department  of  Agriculture  to  the 
Secretary  of  Agriculture  and  by  the  Commissioner  of  Fisheries  to  me  concerning  the 
large  bone  deposits  which  have  been  found  to  be  available  on  the  Pribilof  Islands. 
They  represent  the  accumulations  of  a  century  or  more  and  constitute  probably  the 
largest  known  bone  deposits  in  the  world.  They  have  not  been  fully  suryeyed,  but 
one  of  the  deposits  (and  there  are  many)  lies  at  the  water  front  and  is  a  mile  long  by 
half  a  mile  broad.  Its  thickness  is  not  fully  determined,  but  an  average  depth  of 
2  feet  is  perhaps  a  reasonable  estimate,  and  in  places  where  it  has  been  exposed  by 
the  sea  or  by  workings  it  is  known  to  be  6  feet  deep. 

The  value  of  these  deposits  is  large,  certainly  it  runs  into  the  millions,  possibly 
into  manv  millions  of  dollars.  The  physical  conditions  have  preserved  the  fertiliz- 
ing properties  of  the  bones  in  a  remarkable  wav.  a>J  the  analysis  shows.  Our  agri- 
culture greatly  needs  this  material  and  the  demand  is  such  that  the  wholesale  price 
for  raw  ground  bone  was  $35  a  ton  in  December.  Grinding  is  cheap,  costing,  say  75 
cents  a  ton.     An  abundant  supply  of  labor  is  available  on  the  spot. 

The  problem  of  utilizing  this  immense  deposit  is  one  of  transportation.  It  imme- 
diately concerns  the  farmers  of  our  land  to  have  it  brought  into  use  as  promptly  and 
as  cheaplv  as  possible.  Here  are  many  cargoes  available,  calling  for  transportation, 
of  a  material  the  country  needs.  Here  is  a  Government  asset  of  undetermined  but 
great  value.  Here  is  the  fertilizer  of  which  our  fields  are  in  need.  Where  are  the 
ships  to  bring  it  to  market?  The  deposits  are  Government  property  to  be  developed 
for  the  account  of  the  Public  Treasury,  and  ordinary  business  sense  dictates  that  the 
development  should  be  as  prompt  as  possible. 

The  matter  has  come  definitely  to  my  knowledge  within  a  few  days  and  is  now 
presented  to  you  for  the  consideration  of  your  committee  in  connection  with  the  pend- 
ing bill  to  establish  a  United  States  shipping  board,  in  the  thought  that  your  wisdom 
may  provide  a  means  of  dealing  in  an  appropriate  manner  with  this  valuable  asset. 

Yours,  verv  truly, 

William  C.  PtEDFiELD,  Secretary 

Hon.  J.  W.  Alexander, 

Chairman  Committee  on  Merchant  Marine  and  Fisheries. 


762      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHAA'T  MARINE. 

February  18,  1916. 
The  Secretary  of  Commerce: 

With  reference  to  the  possibility  of  using  the  deposits  of  bones  on  the  Pribilof  Islands 
for  fertilizer  purposes  in  the  United  States  or  abroad  the  following  statement  is  sub- 
mitted: 

Bone  has  long  been  recognized  as  one  of  the  most  important  sources  of  fertilizer 
material.  Containing  as  it  does  both  nitrogen  and  phosphoric  acid  for  many  tj'pes  of 
soil  it  is  a  highly  valuable  soil  amendment.  No  treatment  save  grinding  is  necessary 
to  r;uiier  its  fertilizer  ingredients  available,  and  in  the  shape  of  ground  bone  its  use 
antedates  that  of  phosphate  rock  as  a  source  of  phosi^horic  acid.  The  bison  bones 
which  at  one  time  were  strewn  over  our  western  plains  have  all  been  gathered  and 
turned  into  fertilizer,  and  the  battle  fields  of  Europe  have  been  searched  with  the 
same  object.  The  supply  of  bones  in  recent  years  has  been  limited .  Most  of  that  now 
available  is  turned  out  as  a  by-product  of  the  meat-packing  establishments,  and  we 
annually  import  about  .?1,000,0U0  worth  from  abroad.  These  imports  come  mainly 
from  Argentina,  Canada,  Mexico,  and  ITruguay,  with  a  sm^all  amount  from  Belgium. 
It  is  thus  apparent  that  the  material  is  valuable  enough  to  bear  the  cost  of  shipment 
for  long  distances. 

Very  extensive  accumulations  of  fur-seal  and  sea-lion  bones  exist  on  both  St.  Paul 
and  St.  George  Islands.  Some  of  these  represent  the  killings  since  Alaska  came  into 
the  possession  of  the  United  States,  while  others  go  back  to  the  days  of  the  Russian 
jurisdiction,  when  exceedingly  large  killings  were  made.  The  deposits  on  more 
recent  killing  grounds  are  well  known,  but  the  earlier  accumidations  are  to  a  consid- 
erable extent  obscured  by  soil  and  vegetation.  The  deposits  are  adjacent  to  the  shore, 
but  none  of  them  have  ever  been  examined  with  reference  to  their  area  and  depth,  and 
it  would  be  imsafe  to  make  any  official  estimate  of  the  quantity  of  bones  that  might  be 
available.  It  is  known,  however,  that,  at  the  prevailing  .prices,  the  fertilizer  value  of 
the  bones  would  rim  into  millions  of  dollars. 

The  chemical  analysis  made  by  the  Bureau  of  Soils  of  specimens  of  bone  from  the 
bottom  and  from  the  surface  of  the  deposits  shows  an  average  of  about  4.5  per  cent 
of  nitrogen  and  about  23  per  cent  of  phosphoric  acid,  equivalent  to  5.5  per  cent  am- 
monia and  50.3  per  cent  bone  phosphate.  The  wholesale  price  for  raw  ground  bone 
of  about  this  quality  was  from  $27.25  to  $28  a  ton  in  December,  1913,  when  normal 
prices  prevailed,  and  $35  a  ton  in  December,  1915.  The  retail  price  in  March,  1914, 
when  practically  normal  price.?  prevailed,  was  about  $38  a  ton,  and  the  price  in 
December,  1915,  about  $41.  These  figures  include  the  cost  of  grinding  the  bone, 
which,  in  the  United  States,  would  be  about  75  cents  a  ton.  Whether  or  not  it  would 
be  advisable,  in  order  to  furnis-h  work  for  the  natives,  to  do  the  grinding  on  the  islands 
is  a  matter  which  may  be  left  for  future  determination.  If  a  power  grinding  mill 
were  installed,  the  necessary  fuel  would  have  to  V)e  transported  to  the  i'^lands,  a?  no 
natural  source  of  fuel  exist?.  The  bags  used  in  bringing  coal  to  the  islands  are  prob- 
ably too  coarsely  woven  to  be  used  as  containers  for  ground  bone,  though  they  might 
be  used  for  the  bones  in  the  raw  state. 

Ground  bone  for  fertilizer  purposes  is  used  more  largely  in  the  northeastern  section 
of  the  country  than  elsewhere  and  it  is  probable  that  the  deposits  on  the  Pril'ilof 
Islands  would  have  to  be  brought  within  reach  of  this  section  to  find  the  mo^t  favor- 
able market.  No  freight  rate  from  the  islands  to  the  Pacific  coajt  ports  of  the  United 
States  can  be  given,  since  no  freight  carriers  regularly  call  at  the  i-lands.  From  the 
Pacific  coast  to  the  Atlantic  seaboard,  a  ia  the  Panama  Canal,  freight  rates  in  normal 
times  are  about  $6  a  ton.  The  la=t  quoted  rate  before  the  recent  clo-ing  of  the  canal 
wa?,  however,  between  $11  and  $12  a  ton,  and  the  rate  will  probably  be  near  the.^e 
figures  upon  the  reopening  of  the  canal.  A  Navy  collier  takes  coal  to  Alaskan  points 
and  to  the  inlands  several  times  a  year  and  returns  empty.  It  is  possible  that  arrange- 
ments might  be  made  by  which  such  a  vessel  could  be  used  as  a  means  of  transporting 
the  deposits  to  the  United  States.  A  Navy  collier  coidd  probably  carry  five  or  six 
thousand  tons  of  the  bone  and  could  land  the  cargo  at  Norfolk  within  easy  reach  of  the 
best  market.  It  is  possible  also  that  one  or  more  of  the  large  fertilizer  companies  might 
contract  to  handle  the  depo.-its  under  such  restrictions  as  the  Secretary  of  Commerce 
might  decide  were  ad\d~able.  If  the  privilege  of  utilizing  the  refuse  parts  of  the  seals 
killed  in  coming  years  is  awarded  to  a  private  firm,  on  competitive  bids,  the  working 
of  the  old  deposits  might  very  properly  be  made  a  part  of  the  same  contract. 

The  difficulties  of  the  situation  are  the  absence  of  harbors  and  the  boisterous  surf, 
making  necessary  the  use  of  lighters  or  the  running  of  aerial  cables  from  the  shore  to 
an  off-lying  vessel.  The  loading  of  the  material  with  lighters  would  be  possible  only 
in  summer,  as  at  other  seasons  there  is  too  much  risk  to  small  boats  in  making  landings 
through  the  surf.     The  coal  and  supplies  now  brought  to  the  islands  are  unloaded  by 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      763 

lighters,  and  the  same  boats  returning  empty  to  the  vessel  might  be  employed  to  carry 
the  bones.  The  time  needed  to  load  the  vessel  would,  therefore,  not  be  much  greater 
than  that  now  employed  in  unloading,  since  the  two  operations  could  be  carried  on 
simultaneously.  The  native  inhabitants  of  the  seal  islands  can  be  employed  in 
digging  out  the  deposits  and  making  them  ready  for  shipment,  but  it  is  believed  that 
labor  from  the  mainland  will  be  necessary  for  the  full  exploitation  of  the  bones  after 
commercial  killing  is  resumed,  because  the  natives  will  then  be  fully  occupied  in 
caring  for  the  fresh  carcasses.  The  cost  of  native  labor  could  be  fixed  at  the  rate  of 
$1.50  a  day. 

It  is  possible  that  a  market  nearer  the  islands  might  be  found  in  Japan,  which 
country  annually  imports  considerable  quantities  of  fertilizer  material.  The  present 
price  of  sulphuric  acid  has  tended  to  reduce  the  supply  of  acid  phosphate  and  to 
increase  the  price,  and  under  existing  conditions  any  additional  source  of  phosphates 
and  ammonia  is  to  be  welcomed. 

H.  M.  Smith,  Commis-ioner. 

Also  a  resolution  adopted  by  the  Jefferson  Grange  No.  133,  Jefferson 
Township,  Moody  County,  S.  Dak.,  favoring  the  shipping  bill: 

Jefferson  Grange,  No.  133, 
Jefferson  Township,  Moody  County, 

Colman,  S.  Dak.,  January  1,  1916. 

Resolved.  That,  we,  the  members  of  Jefferson  Grange,  No.  133,  in  meeting  assem- 
bled, view  with  astonishment  and  indignation  the  fact,  that  since  the  opening  of  the 
markets  the  present  season  the  price  of  wheat,  oats,  and  barley  throughout  the  United 
States  has  scarcely  covered  the  cost  of  production,  while  the  price  of  said  products 
throughout  the  markets  of  the  world  have  been  the  highest  known  during  a  period  of 
40  years.  That  we  believe  that  said  conditions,  entailing  as  they  do  the  wholesale 
robbery  of  the  farmers  of  the  United  States,  have  been  brought  "about  by  powerful 
speculative  interests  commonly  known  as  market  manipulators,  through  cooperation, 
combination,  and  collusion,  through  which  the  storage  capacity  of  the  country  is 
controlled  as  well  as  the  operations  of  all  chambers  of  commerce  and  boards  of  trade. 
That  year  after  year,  during  the  flood  tide  of  marketing,  we  see  the  above-described 
manipulations  repeated  with  ever  abnorm-al  enrichment  of  the  grain-gambling  inter- 
ests, and  the  consequent  impoverishment  of  the  agriculturists,  the  real  wealth  pro- 
cers  of  the  country.  That  during  the  first  120  days  since  the  opening  of  markets  this 
year,  the  speculative  grain  interests  took  a  toll  from  the  South  Dakota  farmer  in  the 
handlaing  of  oats,  based  on  the  Liverpool  price,  of  over  90  per  cent  of  the  price  the 
farmers  received ;  and  on  wheat  the  toll  of  the  interests  averaged  above  42  per  cent  of 
the  price  received  on  the  farms  within  the  limits  of  the  State  of  South  Dakota.  There- 
fore be  it  further 

Resolved,  That  w' e  demand  the  erection  of  great  storage  elevators  in  all  of  the  primary 
grain  terminals  of  this  country  by  the  Government  of  the  United  States,  to  the  end 
that  grain  may  be  therein  stored  and  money  obtained  upon  warehouse  receipts. 

That  in  the  erection  of  elevators  we  see  protection  alike  for  producer  and  consumer, 

inasmuch  as  grain  stored  in  such  elevators  instead  of  being  rushed  to  market  in  the 

fall  to  obtain  money  with  which  to  pay  debts,  would  prevent  market  flooding  arid 

•would  be  available  later  when  the  speculative  interests  get  the  bulk  of  the  gi-ain  in 

their  possession  to  prevent  the  boosting  of  prices  beyond  a  reasonable  amount. 

Resolved  further.  That  we  pledge  ourselves  to  support  only  such  candidates  for  Con- 
gi-ess  and  for  the  Senate  of  the  United  States  as  will  pledge  themselves  to  support  and 
work  for  the  above-described  measures  with  a  law  establishing  a  merchant  marine  as 
now  favored  by  the  present  administration,  whereby  vast  sums  may  be  saved  to  the 
farmers  of  the  United  States  in  the  shipment  of  their  produce  to  foreign  countries; 
and  be  it 

Resolved  further,  That  a  copy  of  these  resolutions  be  sent  to  each  Member  of  Con- 
gress and  Senator  at  Washington,  and  that  copies  be  also  transmitted  to  the  President 
of  the  United  States  and  the  Secretary  of  Agriculture. 

[seal.]  N.  p.  Pitsenbarger,  Master. 

Rob  McDowell,  Secretary. 


764      SHiPPlNG  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Also  shipping  catechism  by  Capt.  C.  A.  McAllister,  of  the  Coast 
Guard,  Department  of  the  Treasury: 

SHIPPING   CATECHISM. 

1.  Why  do  we  need  ships? 

Answer.  The  United  States  has  the  largest  foreign  trade  of  any  nation. 

2.  What  ships  have  been  used  heretofore  to  carry  oiu*  exports  and  imports? 
Answer.  About  88  per  cent  of  our  foreign  shipping  business  has  been  conducted  in 

ships  l)elonging  to  our  foreign  rivals. 

3.  Why  can  not  we  continue  to  use  these  ships? 

Answer.  How  long  could  your  grocer  stay  in  business  if  he  relied  entirely  upon  his 
rivals  to  deliver  his  goods?  Besides  that,  over  1,600,000  tons  of  shipj^ing  has  been  de- 
stroyed diiring  the  existing  war.  The  noraial  amount  of  new  shipping  necessary  for 
the  world's  trade  has  not  been  constructed,  as  the  shipyards  of  the  leading  shipbuilding 
countries  (all  belligerents)  have  been  largely  engaged  in  building  war  vessels.  Fur- 
thermore, submarine  warfare  is  daily  adding  to  the  deficit. 

4.  Who  will  suffer  most  from  this  shortage  of  carriers? 
Answer.  The  United  States  of  America. 

5.  How  can  we  prevent  it? 

Answer.  By  enacting  the  pending  shipping  bill  considerable  relief  will  be  fuinished. 

6.  How? 

Answer.  This  bill  creates  a  shipping  board  to  supervise  shipping  in  general  and  to 
prevent  any  unfair  competition  on  the  part  of  our  foreign  rivals.  It  further  provides 
for  a  bond  issue  of  $50,000,000  to  create  about  400,000  tons  of  new  shipping.  In  time 
of  war  these  new  ships  are  to  be  used  as  naval  auxiliaries,  but  in  times  of  peace  they 
are  to  be  leased  to  private  corporations  who  offer  the  best  bid  to  carry  American  goods 
and  to  extend  our  foreign  shipping. 

7.  What  do  you  mean  by  naval  auxiliaries? 

Answer.  They  are  primarily  of  a  merchant-ship  t}"pe,  and  are  used  in  war  times  to 
transport  troops,  ammunition,  coal,  oil,  water,  food,  and  stores  to  the  Army  and  Navy 
wherever  they  are  operating.  They  are  as  essential  as  the  fighting  ships  "themselves, 
for  without  such  supplies  the  ships  and  soldiers  can  not  operate. 

8.  If  they  are  used  during  times  of  peace  for  mercantile  purposes,  is  that  not  Gov- 
ernment ownership? 

Answer.  Yes  and  no.  It  Is  true  that  the  Government  will  own  the  ships,  but  they 
will  be  leased  to  private  indi'viduals  or  corporations  to  transact  the  business  of  the 
country.  A  better  way  to  put  it  Is  that  It  will  be  utilizing  an  emergency  equipment 
provided  for  war  purposes,  in  the  legitimate  business  of  promoting  our  foreign  trade 
in  times  of  peace,  which  will  benefit  all  classes  of  people.  It  will  turn  nonproductive 
ships  into  productive  ones.  Strictly  war  craft,  such  as  battleships  and  torpedo  boats, 
are  a  constant  source  of  expense  in  both  war  and  peace. 

9.  It  has  been  said  that  the  Government  will  operate  these  ships.     Is  that  true? 
Answer.  Only  in  the  contingency  that  private  parties  will  not  start  steamehlp  lines 

where  the  demands  of  trade  call  for  them.  Even  then  the  Government  will  operate 
them  through  a  private  corporation,  of  wliich  the  Government  will  control  the  ma- 
jority of  the  stock,  as  Is  now  being  done  successfully  with  the  vessels  belonging  to 
the  Panama  Railroad  Co. 

10.  How  can  a  private  corporation  backed  by  the  Government  run  such  a  line, , 
where  private  parties  will  not? 

Answer.  Because  the  Government  gets  its  capital  at  half  the  interest  for  which 
private  parties  can  get  it,  and  because  the  Government  can  and  will  operate  steamers 
without  any  profit,  as  it  Is  not  in  the  business  for  a  profit;  only  for  the  benefit  of  all 
the  people.  Private  concerns  would  expect  from  8  to  10  per  cent  profit  before  enter- 
ing any  new  enterprise.  After  the  line  has  been  established  and  put  on  a  paying 
basis,  the  Government  would  undoubtedly  withdraw  and  lease  the  ships  to  private 
parties. 

11.  Would  not  the  Government-owned  sliips  be  more  liable  to  international  com- 
plications in  war  times  than  would  the  privately  owned  ships? 

Answer.  Not  at  all,  as  section  6  of  the  shipping  bill  expressly  provides  that  all 
such  ships  leased  or  operated  under  the  direction  of  the  shipping  board  will  have 
the  same  privileges  and  responsibilities  as  any  other  American-owned  ship,  no  more, 
no  less.  The  Government  protects  its  flag,  no  matter  on  what  vessel  it  files,  regard- 
less of  the  owners  of  the  ships. 

12.  How  can  one  of  these  ships  be  successfully  operated  in  competition  with  foreign 
ships,  as  I  understand  foreigners  pay  cheaper  wages,  provide  cheaper  food,  etc.? 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      765 

Answer.  The  original  cost  of  the  ships  is  now  practically  equalized  among  all 
nations.  The  principal  .costs  of  operation  of  any  ship  are  (a)  overhead  expanses, 
which  include  interest  on  capital,  insurance,  corporation  taxes,  etc.;  (5)  wages  of 
officers  and  men,  and  the  cost  of  their  food;  (c)  fuel.  The  ships  to  be  created  by  the 
bill  will  have  the  advantage  of  half  the  interest  charge  on  capital,  and  a  greatly  re- 
duced corporation  tax,  as  it  is  only  1  per  cent  in  this  country,  compared  to  from"  6  to 
8  per  cent  on  the  ships  of  our  leading  foreign  competitors.  The  insurance  and  depre- 
ciation charges  are  the  same  on  similar  ships,  no  matter  where  owned  or  operated. 
At  the  present  time  wages  on  ships  of  all  nations  are  about  at  a  parity,  with  possibly 
a  disadvantage  of  from  5  to  10  per  cent  on  American  ships  in  the  Atlantic  trade,  and 
perhaps  a  considerably  greater  disadvantage  in  the  Pacific.  Food  on  American  ships 
always  has  been  and  always  will  be,  in  all  probability,  better  than  on  foreign  ships, 
but  the  difference  in  cost  is  so  small  as  to  be  negligible.  Fuel  on  most  ships  costs 
frequently  as  much  or  more  than  wages,  and  here  is  where  the  new  ships  will  benefit. 
Such  advances  have  been  made  in  marine  engineering  of  late  that  a  modern  ship  can 
be  operated  at  from  30  to  50  per  cent  less  cost  for  fuel  then  on  ships  built  5  to  25  years 
ago.  Our  rivals  are  all  burdened  Avith  ships  averaging  from  12  to  15  years  old.'  We 
have  practically  none  to  begin  -with,  so  all  of  the  proposed  fleet  will  be  modern  and 
economical.  It  can  be  easily  demonstrated  that  the  saving  in  fuel  on  these  proposed 
American  ships  will  more  than  offset  the  additional  cost  for  wages  and  food  and  any 
other  disadvantages  as  to  cost  Avhich  they  may  have.  Cheapness  of  timber  created 
for  us  a  magnificent  fleet  of  vessels  in  the  foreign  trade  dm'ing  our  early  days,  and 
the  practical  control  of  the  world's  oil  supply  will  do  it  for  us  now. 

13.  WTiere  will  you  get  the  men  to  man  tliese  ships? 

Answer.  At  first  we  will  have  to  take  the  average  sailors  of  the  world,  as  they  come, 
but  the  bill  pro\ddes  that  oflicers  and  men  who  are  American  citizens  and  serving  on 
these  ships  can  be  enrolled  into  the  United  States  Naval  Reserve,  for  which  they  will 
receive  extra  piy  equiv^alent  to  one-twelfth  of  what  they  ordinarily  earn  per  year. 
The  reason  young  Americans  have  not  gone  to  sea  of  late,  is  principally  because  they 
had  no  American  ships  to  go  on  and  sail  to  foreign  ports.  This  visiting  of  foreign 
countries  and  being  piid  for  it  will  appeal  to  many  young  men,  as  it  has  done  in  the 
United  States  Nav>%  where  the  percentage  of  American  citizens  has  been  increased 
from  35  to  over  95  per  cent  in  20  years. 

14.  Suppose  this  bill  should  pass,  where  will  you  get  the  shii:)S,  as  I  understand 
American  shipyards  are  now  congested  wT-th  work? 

Answer.  There  never  has  and  never  will  be  in  tliis  country  any  lack  of  facilities 
for  embarking  in  an  enter]:)rise  of  this  kind  if  the  Government  will  furnish  the  work. 
If  the  private  yards  see  the  opj^ortunity  to  build  standard  ships,  they  will  enlarge 
their  equipment  to  meet  the  new  conditions.  Undoubtedly  such  a  large  order  for 
new  construction  would  evolve  a  "standard"  ship,  an  object  long  sought  in  this 
country,  and  one  that  will  greatly  reduce  the  cost  of  construction. 

15.  What  other  important  features  are  there  in  the  bill? 

Answer.  The  shipping  board  is  authorized  to  give  goods  carried  in  American  ships 
preference  in  railroad  rates,  to  expedite  deliveries  for  foreign  shipment  and  otherwise 
to  encourage  our  foreign  trade.  In  other  words,  this  is  one  of  the  few  bills  ever 
seriously  considered  by  Congress  wherein  Americans  are  given  preference  over  their 
foreign  rivals  in  the  shipping  trade,  and  it  is  high  time  that  something  like  this  was 
done,  if  we  are  to  continue  our  national  prosperity. 

16.  What  is  the  cause  of  the  present  embargoes  by  the  principal  railroads  on  freight 
for  seaports? 

Answer.  Entirely  due  to  lack  of  ships  to  carry  the  goods  to  foreign  countries. 

17.  Is  there  not  a  large  fleet  of  vessels  now  being  built  in  our  sliipyards? 
Answer.  Yes;  over  900,000  tons  of  shipping  is  now  under  construction.     Of  that 

amount,  over  60  per  cent  are  tankers  and  colliers,  wliich  will  not  extend  our  trade 
in  manufactured  goods.  Of  the  remainder  the  majority  are  for  the  coastwise  trade, 
and  for  foreign  owners.  Very  little  tonnage  is  now  under  construction  for  our  export 
trade. 

18.  Do  you  think  the  bill  will  pass? 

Answer.  Yes;  as  the  American  people  as  a  whole  are  now  fully  alive  to  the  impor- 
tance of  having  sometliing  done  for  their  shipping.  They  know  that  if  the  bill  is  not 
passed  they  will  lose  the  "greatest  opportunity  ever  presented  to  a  nation  for  increas- 
ing its  wealth  and  prosperity. 

32910—16 49 


766      SHilPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Also  extract  from  letter  of  Commercial  Attache  Baldwin,  at 
London,  to  the  Bureau  of  Foreign  and  Domestic  Commerce  regading 
the  British  shipping  board. 

Departmext  of  Commerce, 
Bureau  of  Foreign  and  Domestic  Commerce, 

Washington,  March  1,  1916. 
Hon.  Joshua  W.  Alexander, 

House  of  Representatives,  Washington,  D.  C. 

My  Dear  Congressman:  The  bureau  is  in  receipt  of  a  letter  from  Commercial 
Attach^  Baldwin,  at  London,  under  date  of  February  11,  sui)plementin?  information 
already  received  from  him.  in  regard  to  the  British  shipping  board.  The  folio vring 
extract  will  perhaps  be  of  interest  to  you : 

"The  development  of  the  control  of  shipping  hes  been  somewhat  haphazard,  one 
phase  of  the  subject  after  another  receiving  consideration;  and  the  result  has  been 
that  those  who  deal  in  the  chartering  of  ships  have  found  it  very  difficult  to  make 
Bure  that  all  the  requirements  of  these  various  committees  have  been  complied  with. 
The  article  in  the  1  ondon  Times  of  January  25,  by  Leslie  Scott,  to  which  reference 
was  made  in  my  cablegram  of  yesterday,  lists  the  shipping  committees  to  that  date  as 
follows: 

"1.  The  admiralty  transjiort  department,  with  its  ad\nisory  committee  of  ship- 
owners, which  requisitions  ships  for  naval  and  military  transport  purposes. 

"2.  The  requisitioning  (carriage  of  foodstuffs^  committee  appointed  last  November 
by  the  president  of  the  board  of  trade,  which  requisitions  ships  for  carriage  of  foodstuffs 
and  other  merchandise. 

"3.  The  ship  licensing  committee,  which  grants  or  refuses  licenses  for  the  carriage 
of  goods  between  foreign  port  and  foreign  port  by  British  steamships  registered  in  the 
United  Kingdom. 

"4.  The  ports  and  transit  executive  committee,  which  deals  with  problems  of  the 
congestion  of  ports  in  the  United  Kingdom. 

"5.  The  railways  executive  committee  (the  supply  of  wagons  is  of  vital  importance 
to  the  clearing  of  congestion  at  the  ports). 

"6.  The  war  trade  department  (coal  division),  which  deals  with  the  export  of  coal. 

"7.  The  commission  Internationale  de  ra\itaillement,  which  considers  the  needs 
of  Ihe  allies. 

"8.  The  interratioral  joint  committee  for  the  purchase  of  wheat,  referred  to  by  the 
president  of  the  board  of  trade  in  the  Bouse  of  (  ommors  on  Jaruary  19. 

"Sirce  that  time  the  committee  of  w  hich  I  ord  C  urzon  is  chairman,  has  been  estab- 
lished (as  far  as  I  can  learn)  to  be  a  sort  of  supercorrmittee  ard  to  coordinate  their 
activities.  Through  my  relatiors  w  i'h  shippirg  people  in  London  1  receive  the  infor- 
mation that  this  last  committee  (as  the  colloquial  phrase  expresses  it  here)  is  the  'top 
dog.' 

"While  the  Government  has  not  assumed  entire  control  of  British  shipping  to  the 
extent  of  managing  the  operation  of  ships,  the  restrictions  now  imposed  practically 
amount  to  a  Government  disposition  of  shipping  operations." 

Attention  is  also  invited  to  the  attached  page  11,170  of  the  London  Gazette  for 
November  12,  1915,  whi(h  contains  further  information  concerning  the  functions  of 
the  ship  licensing  committee,  which  is  No.  3  of  the  various  committees  enumerated 
above. 

I  trust  that  this  material  may  be  of  some  assistance  to  you  in  connection  with  your 
consideration  of  the  proposed  shipping  board. 
Very  truly,  yours, 

E.  A.  Brand, 
Acting  Chief  of  Bureau. 

Also  clipping  from  the  London  Gazette  of  November  12,  1915,  con- 
cerning the  functions  of  the  ship  licensing  committee: 

At  the  court  at  Buckingham  Palace,  the  10th  day  of  November,  1915. 

Present,  the  King's  Most  Excellent  Majr sty  in  Council. 

Whereas  a  state  of  war  exists  between  His  Majesty  and  the  German  Emperor,  the 
Emperor  of  Austria,  King  of  Hungary,  the  Sultan  of  Turkey,  and  the  King  of  the 
Bulgarians; 

And  wdiereas  His  Majesty  holds  it  to  be  his  prerogative  duty  as  well  as  his  prerogative 
right  to  take  all  steps  necessary  for  the  defense  and  protection  of  the  realm; 


SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     767 

And  whereas  it  has  been  made  to  appear  to  His  Majesty  that  it  is  essential  to  the 
defense  and  protection  of  the  realm  that,  in  the  exercise  of  his  prerogatives  as  aforesaid, 
he  should  prohibit  as  from  and  after  the  1st  day  of  December,  1915,  the  carrying  of 
cargo  from  any  foreign  port  to  any  other  foreign  port  by  any  British  steamship  registered 
in  the  United  Kingdom  exceeding  500  tons  gross  tonnage — and  whether  or  not  such 
ship  while  carrying  such  cargo  calls  at  any  intermediate  port  within  his  Majesty's 
dominions — unless  the  owner  or  charterer  of  such  steamship  has  been  granted  exemp- 
tion by  license  as  hereinafter  provided : 

Now,  therefore,  His  Majesty  is  pleased,  by  and  with  the  advice  of  his  privy  council, 
and  in  exercise  of  liis  prerogatives  as  aforesaid  and  of  all  other  powers  him  thereunto 
enabling,  to  order,  and  it  is  hereby  ordered,  that  from  and  after  the  1st  day  of  Decem- 
ber, 1915,  no  British  steamship  registered  in  the  United  Kingdom  exceeding  500  tons 
gross  tonnage  shall  carry  any  cargo  from  any  foreign  ]:)ort  to  any  other  foreign  port — 
and  whether  or  not  such  sliip  wliile  carrying  such  cargo  calls  at  any  intermediate  port 
within  His  Majesty's  dominions — unless  the  owner  or  charterer  of  such  steamship 
has  been  granted  exemption  by  license  as  hereinafter  provided. 

And  His  Majesty  doth  hereby  declare  that  the  expression  "foreign  port"  herein  used 
shall  mean  and  include  any  jiort  outside  his  Majesty's  dominions. 

And  His  Majesty,  by  and  with  the  advice  aforesaid,  and  in  exercise  of  his  prerrga- 
tives  and  powers  as  aforesaid,  is  further  pleased  to  authorize  and  direct  the  preddent 
of  the  board  of  trade  to  appoint  a  committee  of  persons  to  carry  out  and  give  effect  1o 
the  pro\'isions  hereof,  and  that  the  said  committee  shall  have  power  to  grant  licenses 
of  exemption  therefrom  to  or  in  favor  of  owners  and  charterers  of  such  steamships  as 
aforesaid,  which  licenses  may  be  general  in  reference  to  classes  of  ships  or  their  voyages 
or  special. 

And  His  Majesty  is  further  pleased  to  authorize  the  president  of  the  board  of  trade 
from  time  to  time  to  add  other  persons  as  members  of  such  committee,  and  to  substi- 
tute as  members  thereof  other  persons  for  such  members  as  may, from  time  to  time  die, 
resign,  or  be  or  become  incapable  of  acting  thereon. 

And  the  president  of  the  board  of  trade  is  to  act  and  to  give  instructions  and 
directions  accordingly. 

Almeric  FitzRoy. 

Also  a  memorandum  showing  the  ocean  freight  rate3  on  tobacco, 
unmanufactured,  as  they  were  prior  to  outbreak  of  the  war  and  as  they 
were  in  March,  1916. 

Ocean  freight  rates  on  tobacco,  unmanufactured. 


Baltimore  to — 
Liverpool . . 

Rotterdam . 


France. 
Italy... 


New  Orleans  to — 

England 

France 

Italy 

Netherlands.. 


July,  1914. 


34  cents  per  100  pounds 

Maryland  leaf,  43|  cents  per  100 

pounds. 
Virginia  and   Kentuclcy  leaf,  30 

cents  per  100  pounds. 

None 

do 


43  to  54  cents  per  100  pounds . 

43  cents  per  100  pounds 

43  cents  per  100  pounds 

48  to  50  cents  per  100  pounds . 

Before  war. 
New  York  to —  I 

England !  30  cents  per  100  poimds 

France j  80  cents  per  100  pounds 

Italy I  60.8  cents  per  100  pounds 

Holland !  27  cents  per  100  pounds 


March,  1916. 


Jan.  19,  1916  (latest  data  obtaina- 
ble), S2.50  per  100  pounds. 
$1.25  per  100  pounds 


:  per  100  pounds . 


None. . 
do. 


February,  1916. 


$3.50  per  100  pounds 

$3.50  per  100  pounds 

$2.30  per  100  pounds 

$2.25  to  $3  per  100  pounds . 

Present  time. 


$1.50  per  100  pounds 
$3  per  100  pounds . . . 
do 

$2.25  per  100  pounds . 


Increase. 


Per  cent. 
636 


186 
567 


714-548 
714 
435 

350-523 


400 
275 
393 
733 


768      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Also  a  letter  from  the  Freiberg  Lumber  Co.,  of  Cincinnati,  Ohio, 
to  Mr.  W.  C.  Culkins,  executive  secretary  of  the  Cincinnati  Chamber 
of  Commerce,  showing  lack  of  shipping  facilities: 

The  Freiberg  Lumber  Co., 
Cincinnati,  Ohio,  February  23,  1916. 
W.  C.  Culkins, 

Executive  Secretary,  Chamber  of  Commerce,  Cincinnati,  Ohio. 
Dear  Sir:  Pursuant  to  the  conversation  the  writer  had  with  you  this  morning,  we 
would  greatly  appreciate  it  indeed  if  you  would  be  kind  enough  to  take  up  with  the 
authorities  in  Wasliington  the  conditions  now  prevailing  in  the  steamship  business. 

We  have  from  four  to  five  million  feet  of  mahogany  logs  to  move  from  Nicaragua  to 
Gulf  ports.  We  have  made  innumerable  efforts  to  get  a  boat,  without  success,  and 
the  chief  reason,  as  we  see,  of  these  deplorable  conditions  is  the  fact  that  the  boats 
have  been  allowed  to  get  into  the  hands  of  speculators,  whom  we  find  are  asking 
abnormal  prices,  and  we  don't  tliink  tliis  is  fair  to  those  who  are  in  the  legitimate 
business  to  pay  such  heavy  rates  as  they  propose  to  charge. 

Our  purpose  of  writing  this  letter  to  you  is  to  bring  this  matter  before  the  attention 
of  Washington,  if  you  possibly  can,  and  see  if  there  is  any  way  at  all  for  us  to  obtain 
suitable  tonnage  for  bringing  up  the  wood  we  have  to  tliis  country  and  bridging  over 
the  difficulties  we  are  up  against  now,  as  we  have  been  compelled  to  shut  down  our 
plant  owing  to  the  fact  that  we  are  out  of  timber  for  the  past  four  weeks,  being  unsuc- 
cessful in  landing  a  suitable  boat  for  handling  this  business. 

At  the  present  time  we  are  requiring  a  ship  of  2,000  tons  dead-weight  capacity,  or 
less,  whicli  we  could  use  for  a  period  of  six  to  nine  months,  steady  work. 

Any  tiling  you  can  do  toward  alleviating  the  above  conditions  will  be  greatly  appre- 
ciated by  us. 
Thanking  you  in  advance  for  your  efforts  in  our  behalf,  we  are, 
Yours,  very  truly, 

The  Freiberg  Lumber  Co., 
Harry  A.  Freiberg,  President. 

Also  a  letter  from  Mr.  Arthur  Hastings,  president  of  the  Ameri- 
can Writing  Paper  Co.,  regarding  shipping  conditions: 

American  Writing  Paper  Co., 

Holyoke,  Mass.,  March  4,  1916. 
Hon.  Wm.  C.  Redfield, 

Department  of  Commerce,  Washington,  D.  C. 
My  Dear  Mr.  Secretary:  In  further  reply  to  yoiu*  valued  communication  of 
the  2d.  I  quite  agree  with  you  on  the  shipping  question,  and  the  necessity  of  this 
country's  owning  or  controlling  plenty  of  ships  to  do  our  commerce.  It  is  a  matter 
that  I  have  always  held  should  have  been  taken  up  intelligently  by  this  Government 
60  that  we  coiild  hold  the  trade,  at  least  contingent  to  this  continent.  Just  what 
has  been  in  the  minds  of  legislators  for  the  last  50  years  in  reference  to  this  matter, 
I  do  not  know,  and  have  never  been  able  to  satisfy  myself  that  they  cared  very  much 
or  they  would  have  taken  it  up  more  intelligently.  I  am  not  familiar  with  the  present 
shipping  bill  so  that  I  do  not  feel  competent  to  pass  upon  it.  but  ships  we  should  have 
\mder  our  own  flag. 

Yours,  very  truly, 

Arthur  C.  Hastings,  President. 

Also  a  clipping  from  Montreal  (Quebec)  Gazette,  entitled  "Govern- 
ment-owned line  of  Hudson  Bay  steamers  " : 

Government-Owned  Line  of  Hudson  Bay  Steamers. 

EXPECTED  to  CARRY  PART  OF  CANADA'S  1917  WHEAT  CROP  OVERSEAS — RAILWAY 
being  rushed — LAYING  OP  STEEL  WILL  BE  COMPLETED  BY  THE  FALL  OF  1916,  IT  IS 
EXPECTED. 

[Special  to  the  Gazette.] 

Ottawa,  November  19. 

A  Government-owned  line  of  steamers  out  of  Hudson  Bay  will  be  established,  it  is 
understood,  on  the  completion  of  the  line  and  terminals  of  Canada's  new  northern 
port  and  will  be  in  operation  in  time  to  carry  part  of  the  1917  wheat  crop  to  its  desti- 
nation overseas,  it  is  hoped. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      769 

Work  on  the  construction  of  the  line  is  being  expedited  with  a  view  to  completing 
thelajdng  of  steel  by  the  fall  of  next  year.  If  this  is  done,  as  stated,  the  route  will 
be  in  a  position  to  compete  for  the  movement  of  the  Canadian  grain  crop  of  1917. 
On  account  of  the  prejudice  created  against  the  route  by  the  results  of  careless  navi- 
gation in  Hudson  Bay,  it  is  expected  that  insurance  rates  will  at  first  be  so  high  that 
it  will  be  necessary  for  the  Government  to  operate  its  own  line  of  steamers.  This,  it 
may  be  stated,  will,  according  to  present  intentions,  be  done. 

There  now  remain  only  100  more  miles  of  grading  to  be  done  on  the  Hudson  Bay 
Railway.  The  roadbed  has  been  graded  for  almost  90  miles  beyond  Manitou,  on  the 
Nelson  River,  and  is  now  waiting  for  the  steel.  A  bridge  has  still  to  be  constructed 
across  this  river,  but  it  will  be  taken  up  in  a  "knockdown"  condition  and  will  not 
take  long  to  erect,  though  the  span  is  of  considerable  length. 

Work  at  the  terminals  is  also  proceeding,  while  at  the  same  time  wireless  stations 
are  being  placed.  There  will  be  a  chain  of  these  covering  the  whole  route  from  Port 
Nelson  to  the  mouth  of  Hudson  Straits. 

Also  a  letter  from  Mr.  William  E.  Peck,  of  New  York,  giving 
additional  information  on  shipping  conditions : 

William  E.  Peck  &  Co.  (Inc.), 

New  YorTc,  March  10,  1916. 
Hon.  Joshua  W.  Alexander, 

House  of  Representathes,  Washington,  D.  C. 
Dear  Sir:  The  freight  situation  continues  to  get  worse  instead  of   better,  and 
recently  a  charter  has  been  made  from  New  York  to  Buenos  Aires  at  the  rate  of  $95,000 
per  month  for  a  steamer  which  can  carry  8,500  tons  of  freight,  and  I  understand  that 
two  more  charters  are  about  to  be  executed  at  the  rate  of  $115,000  per  month. 

As  three  months  are  required  for  the  round  trip,  you  can  readily  see  that  the  freight 
rates  on  many  of  the  commodities  which  we  ship  will  be  prohibitive. 

As  I  remarked  when  I  attended  the  recent  hearing  on  the  Alexander  bill,  "Some 
bill  ought  to  be  passed  as  quickly  as  possible  to  relieve  the  situation,"  and  I  therefore 
trust  that  your  bill,  with  the  few  changes  suggested  by  the  New  York  Chamber  of 
Commerce  committee,  will  have  the  early  attention  of  Congress. 

The  shipping  situation  is  getting  so  dreadfully  bad  that  men  who  were  formerly 
ultraconservative  as  regards  any  Government  aid  are  now  beginning  to  realize  that 
unless  the  Government  steps  in  and  does  something  for  the  relief  of  our  shipping  that 
the  exports  of  this  country  are  going  to  be  terribly  curtailed. 
Yours,  very  truly, 

W.  E.  Peck. 

Also  letter  from  the  Secretary  of  Commerce,  quoting  a  letter  from 
the  White  Star  Line  regarding  shipments  to  Liverpool: 

Department  of  Commerce, 

Washington,  March  11,  1916. 
My  Dear  Judge  Alexander:  Permit  me  to  quote  in  full  letter  which  speaks  for 
itself: 

11  Broadway, 
New  York,  March  8,  1916. 
The  Industrial  Press, 

140  Lafayette  Street,  City. 
Gentlemen:  Referring  to  you  letter  of  the  7th  instant,  beg  to  say  at  the  present 
time  we  have  no  space  to  offer  for  shipments  of  any  kind  to  Liverpool  inasmuch  as  the 
British  Government  has  taken  practically  all  space  by  our  steamers  for  their  require- 
ments. 

Yours,  truly, 

White  Star  Line, 
Per  A.  T.  Allen. 

It  would  be  hard  to  conceive  a  more  humiliating  position  for  our  country  than  this. 
I  earnestly  hope  the  new  shipping  bill  will  relieve  the  situation  which  now  appears 
so  heavily  against  us. 

Yours,  very  truly, 

William  0.  Redfield,  Secretary. 

Hon.  J.  W.  Alexander, 

House  of  Representatives,  Washington,  D.  C. 


770      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Also  letter  from  Dr.  E.  E.  Pratt,  Chief  of  the  Bureau  of  Foreign  and 
Domestic  Commerce,  quoting  cablegram  from  Commercial  Attach^ 
Veditz,  at  Madrid,  regarding  the  creation  of  a  commission  to  regulate 
shipping  for  the  Spanish  Government: 

Department  of  Commerce, 
Bureau  of  Foreign  and  Domestic  Commerce, 

Washington,  March  10,  1916. 
Hon.  Joshua  W.  Alexander, 

House  of  Representatives,  Washington,  D.  C. 
My  Dear  Congres.'sman:  The  bureau  is  this  morning  in  receipt  of  a  cablegram 
from  Commercial  Attache  Veditz,  at  Madrid,  as  follows: 

"Spanish  royal  decree  March  3  creates  commission  regulate  ocean  transportation 
of  necessities,  especially  wheat  and  coal.  It  may  requisition  hundred  thousand  tons 
Spanish  ships  fix  freights  for  above  imports  and  maximum  selling  prices  thereof 
here." 

I  believe  that  this  information  may  prove  to  be  of  some  interest  to  you  in  con- 
nection with  the  proposed  shipping  board,  inasmuch  as  it  means  that  the  shipping 
of  still  another  neutral  nation  will  be  greatly  restricted.  There  is  also  inclosed  for 
your  information  a  marked  copy  of  Commerce  Reports,  containing  another  announce- 
ment from  Commercial  Attache  Veditz  to  the  effect  that  the  Pinillos  Steamship  Co, 
has  just  announced  the  suspension  of  its  mail  steamship  service  between  Spain  and 
America.  "With  kind  regards,  I  am, 
Very  truly,  yours, 

E.  E.  Pratt,  Chief  of  Bureau. 

Also  clipping  from  United  States  Commerce  Reports,  announcing 
suspension  of  mail  steamship  service  between  Spain  and  America: 

SUSPENSION    OF    SPANISH    STEAMSHIP   LINE. 

[Commercial  Attach^  C.  \V.  A.  Veditz,  Madrid,  Feb.  11.] 

The  Pinillos  Steamship  Co.  has  just  announced  the  suspension  of  its  mail  steamship 
service  between  Spain  and  America,  on  account  of  the  abolition  of  the  Government 
navigation  subsidies.  The  company  operated  mail  steamers  twice  a  month  to  Cuba 
and  Porto  Ptico,  and  once  a  month  to  South  America. 

Also  resolution  of  the  American  Chamber  of  Commerce  of  China: 

To  the  President  of  the  United  States  and  the  Secretary  of  Department  of  Commerce: 
Whereas  subsequent  to  the  enactment  of  the  La  Follette  seamen's  bill  the  Pacific 
Mail  Steamship  Co.'s  fleet  of  five  vessels,  the  Great  Northern  Steamship  Co.'s  mara- 
moth  liner  Minnesota,  and  the  Dollar  Steamship  Co.'s  three  liners  under  the  Ameri- 
can flag,  constituting  the  entire  American  mercantile  marine  in  the  trans-Pacific 
trade,  have  been  sold  and  withdrawn  from  the  Pacific  (with  the  exception  of  the 
Robert  Dollar,  which  is  to  make  VancouA'er  its  only  American  port  of  call);  and 
Whereas  the  withdrawal  of  the  American  mercantile  fleet  from  the  Pacific  at  this  time 
will  be  many  fold  more  disastrous  in  its  effects  on  America's  trade  with  China  than 
had  it  happened  during  peace  time  for  the  following  reasons: 

(a)  The  Canadian  Pacific  fleet  and  a  number  of  the  Standard  Oil  Co.'s  vessels 
under  the  British  flag  on  the  Pacific  have  been  commandeered  by  the  British 
Government  for  war  service. 

(b)  Because  of  the  scarcity  of  tonnage,  the  Japanese  Government  has  instructed 
its  subsidized  trans-Pacific  Uners  to  give  exporters  from  Japan  preference  in  allot- 
ments c  f  tonnage. 

(c)  The  British  enemy  trading  act  and  regulations,  as  in  operation  in  China, 
interpret  as  enemy  cargo  any  goods  from  which  German  or  Austrian  firms  or  indi- 
viduals can  directly  or  indirectly  profit  in  the  cargo  itself  or  in  the  preparation 
thereof  and  prohibits  British  ships  and  lighterage  companies  from  handling  any 
such  cargo,  even  though  absolute  American  or  other  neutral  ownership  may  be 
proven  before  the  cargo  leaves  the  port,  and  in  this  connection  requires  that  neutral 
applicants  for  British  tonnage  submit  all  documents  pertaining  to  orders  to  the 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      771 

Britisli  consular  authorities  for  inspection  and  approval  before  British  shipping 
companies  will  be  allowed  to  accept  neutral  cargo  for  shipment.  As  it  is  estimated 
that  above  75  per  cent  of  the  export  trade  from  China  to  the  United  States  (tea 
and  silk  excepted)  has  been  d  ^ne  through  German  firms,  which  alone  possess  the 
facilities  for  handling  this  trade,  the  bulk  of  China's  export  trade  with  the  United 
States  falls  into  the  category  of  "enemy  trade"  under  the  British  enemy  trading 
act  as  operated  in  China;  thus  it  becomes  impossible  for  American  firms  to  partici- 
pate in  this  trade  so  long  as  they  are  dependent  upon  British  ships. 

(d)  Not  only  does  the  enemy  trading  act  interfere  with  shipments  from  China  to 
the  United  States,  but  importations  by  American  merchants  are  seriously  ham- 
pered from  the  fact  that  the  British  consular  authorities,  in  some  instances,  demand 
insight  into  all  details  of  CA-ery  transaction  undertaken  by  these  American  import 
firms  and  have  issued  an  order  that  any  import  cargo  handled  by  British  ships  shall 
not  be  delivered  until  the  documents  have  been  approved  by  British  authorities. 
Through  fear  that  this  approval  of  a  shipment  might  not  be  forthcoming,  one  of 
the  largest  American  shipping  firms  in  the  Orient  has  instructed  its  United  States 
offices  not  to  accept  any  cargo  for  Shanghai,  fearing  that  it  might  be  held  liable 
of  violation  of  the  common  carrier  act  if  it  was  forbidden  to  deliver  cargo  which  it 
had  taken  for  transportation  to  this  port.  Thus  it  has  become  exceedingly  difficult 
for  American  import  firms  to  be  certain  of  receiving  goods  they  have  ordered,  since 
the  lack  of  American  tonnage  restricts  their  incoming  shipments  to  British  and 
Japanese  vessels. 

(e)  The  regular  line  Japanese  steamships  loading  cargo  in  Cliina  ports  are  obliged 
to  load  in  midstream,  necessitating  the  use  of  lighters,  which  are  for  the  most  part 
controlled  by  British  tug  and  lighter  companies,  which  has  the  effect  of  placing 
cargo  shipped  by  these  steamers  under  British  supervision  so  far  as  concerns  the 
British  trading  act  and  regulations. 

(/)  The  general  curtailment  of  Chinese  exports  to  Europe  owing  to  the  war  has 
caused  a  substantial  reduction  in  the  values  of  some  of  these  products,  and  the  clos- 
ing of  other  sources  of  supply  has  increased  the  demands  for  certain  other  China 
products;  these  factors  combined  with  the  very  favorable  export  exchange  make 
for  increased  demands  in  the  United  States  for  China's  articles  of  export  and  in  spite 
of  advances  in  freight  to  from  100  to  150  per  cent  now  as  compared  with  those  ruling 
before  the  European  war,  the  volume  of  export  trade  from  China  to  the  United 
States  during  this  period  has  increased  greatly. 

(g)  The  trans  Pacific  shipping  faciliti(  s,  including  the  ships  until  recently  under 
the  American  flag,  thos''  ^\ithdrawn  or  sold,  thos^'  commandeered  by  the  British 
Government,  and  the  British  and  Japanes?  ships  now  in  oporation  under  restriction 
have  not  exceeded  the  cargo  requirements  for  this  trade,  even  during  normal  times. 
(h)  Unusual  oppartuniti'  s  for  the  development  of  American  export  trade  with 
China  pr<  sent  th^ms  Ives  during  this  time  wh<:>n  Europ'^an  suppli-^s  are  cut  off  from 
this  market,  but  (  hina  must  s '11  her  products  if  she  would  maintain  her  import 
trade.  By  facilitating  the  movement  of  exports  from  China  to  the  Unit^'d  States 
the  way  is  paved  for  increas  d  imports  from  America  and  for  the  establishment  of 
a  market  for  American  products  in  (_  hina  which  it  may  bo  possible  to  hold  after  the 
conclusion  of  the  war  and  which  without  the  war  it  may  have  been  impossible  to 
establish:  Now,  therefor.^  be  it 

Resolved,  That  we,  the  American  Chamber  of  Commerce  of  China,  in  the  interest 
of  American  trade  in  (  hina  and  especially  in  light  of  the  advantageous  opportunities 
which  would  be  accorded  this  trade  at  this  time  when  the  Europ'  an  nations  are  engaged 
in  war,  provided  we  had  adequate  shipping  facilities  under  the  American  flag  to 
handle  this  trade,  do  earnestly  urge  taking  of  such  action  as  will  result  in  the  immedi- 
ate repeal  of  the  destructive  La  FoUette  seamen's  bill  and  the  enaction  of  such  other 
legislation  as  will  encourage  the  immediate  development  of  an  American  merchant 
marine  in  the  trans  Pacific  trade,  and  that,  pending  the  enactment  of  the  necessary 
remedial  measures,  our  Department  of  State  in  conference  with  the  British  authorities 
secure  the  recognition  of  the  right  of  Americans  to  the  shipment  of  bona  fide  American- 
owned  cargo  on  British  ships  and  importations  thereof  irrt  spective  of  prior  ownership. 

American  Chamber  of  Commerce  of  China. 
By  J.  H.  McIMiCHAEL,  President. 
By  P.  L.  Bryant,  Secretary. 

Shanghai,  November  1,  1915. 


772       SHIPPING  BOARD,  NAVAL  AUXILIARY,  AXD  MERCHANT  MARINE. 

Also,  letter  from  Mr.  Lorenzo  Daniels,  of  the  firm  of  Busk  &  Daniels, 

New  York: 

Lamport  &  Holt  Line, 
Busk  &  Daniels,  General  Agents, 

New  York,  March  7,  1916. 
Hon.  J.  W.  Alexander, 

Chairman  Committee  on  the  Merchant  Marine  and  Fisheries, 

Washington,  D.  C. 

Dear  Sir:  We  have  had  several  calls  from  newspaper  representatives  and  others 
relative  to  some  testimony  in  the  minutes  of  the  present  hearing  at  Washington  to  the 
effect  that  the  Lamport  &  Holt  Line  had  been  asked  to  quote  on  a  tender  for  a  large 
quantity  of  pipe  bound  to  South  America  and  that,  because  we  had  not  quoted  freight 
rates,  we  were  discriminating  against  the  American  shipper.  ^ 

These  statements  are  ridiculous  for  the  reason  that  for  considerably  over  a  year  now 
the  Lamport  &  Holt  Line  have  not  operated  cargo  boats  in  thrir  South  American 
Ber\'ice  from  New  York,  but  have  confined  themsf-lves  practically  to  the  passenger 
steamers  sailing  fortnightly.  These  steam. -rs  are  insulated  for  refrigeration  throughout 
and  are  not  able  to  carry  rough  cargo.  Those  conditions  on  their  face  explain  the  reason 
why  we  were  not  interested  in  quoting  a  rate  on  several  thousand  tons  of  rough  water 
pipes. 

Furthermore,  I  would  take  the  opportunity  of  calling  your  attention  to  the  fact  that 
the  trade  between  the  United  States  and  South  America  is  now  practically  in  the  hands 
of  lines  operating  American  steamers,  together  with  the  steamers  of  the  National  Brazil 
Line  and  augmented  by  the  boats  of  neutral  countri-^s,  such  as  Norway,  Denmark,  etc. 

If  you  will  take  the  announcements  of  the  lines  in  to-day 's  Journal  of  Commerce  you 
will  iind  that  the  Lloyd  Brazileiro,  owned  by  the  Brazilian  Government,  announce  the 
sailing  of  8  Brazilian  steamers;  the  United  States  &  Brazil  Line  announce  the  sailing 
of  three  10,000-ton  American  boats;  Funch,  Edye  &  Co.,  1  American  and  1  Danish 
steamer;  Barber  &  Co.,  1  American  and  2  Norwegian  steamers;  Houlder,  Weir  &  Boyd, 
1  American  and  1  Norwegian;  the  Prince  Line,  1  British  steamer  monthly;  the  Norton 
Line,  3  American  steamers  of  large  tonnage;  making  a  total  of  9  American  steamers,  8 
Brazilian  steamers,  3  Norwegian,  and  1  Danish  steamer;  and,  including  our  own 
announcement  of  3  British  steamers,  a  total  of  only  5  British  steamers,  covering  the 
departures  near  by  for  Brazil  and  Kiver  Plate  ports. 

The  trade  to-day,  therefore,  as  you  will  soe,  is  in  the  hands  principally  of  the  Amer- 
ican and  Brazilian  steamers,  and  we  believe  the  rates  are  higher  than  they  have  ever 
been  before. 

It  is  our  personal  regret  that  we  are  not  able  to  place  more  tonnage  in  this  trade  and 
to  enjoy  the  present  high  market  rates  for  transportation  that  are  being  taken  advantage 
of  principally  by  the  American  and  Brazilian  tonnage. 

Possibly,  in  fairness  to  ourselves  and  in  refutal  of  the  statements  that  appear  on  your 
minutes,  it  may  be  desirable  that  this  letter  be  made  a  matter  of  record . 
Yours,  faithfully, 

Lorenzo  Daniels. 

P.  S. — I  omitted  to  include  2  American  steamers  of  the  Grace  Line  and  1  American 
steamer  of  the  New  York  &  South  American  Line,  serving  Bahia  Blanca  and  ports  to 
the  south  of  Buenos  Aires,  on  their  way  to  the  West  Coast.  Total,  29  steamers  (24 
American,  etc.,  5  British). 

Also  a  letter  from  Dr.  E.  E.  Pratt,  Chief  of  the  Bureau  of  Foreign 
and  Domestic  Commerce,  transmitting  data  on  the  subject  of  ocean 

freight  rates: 

Department  of  Commerce, 
Bureau  of  Foreign  and  Domestic  Commerce, 

Washington,  March  16,  1916. 
Dear  Judge  Alexander:  In  response  to  the  verbal  request  made  by  you  some 
weeks  ago  I  am  transmitting  herewith  considerable  data  on  the  subject  of  ocean  freight 
rates  from  the  ports  of  New  York,  Boston,  New  Orleans,  San  Francisco,  and  Seattle. 
These  data  were  compiled  for  the  most  part  by  the  commercial  agents  in  charge  of  the 
district  offices  of  this  bm'eau  at  the  specified  ports,  although  considerable  data  also 
were  taken  from  material  in  the  bureau's  files. 

As  you  wall  observe,  rates  on  the  first  of  each  quarter  in  1914  and  1915  are  shown 
for  all  of  the  specified  American  ports,  and  also  at  the  close  of  each  week  from  January 
1,  1914,  to  March  11,  1916,  for  the  ports  of  New  York  and  Boston.     The  data  cover  a 


SHIPPING  BOARD,  NAVAL  AUXILIAEY,  AND  MEECHANT  MAKINE.      773 

wide  variety  of  commodities  as  well  as  a  considerable  number  of  foreign  ports,  and 
afford,  therefore,  an  adequate  basis  for  gauging  the  movement  in  ocean  freight  rates 
during  the  past  two  years. 

As  a  supplement  to  the  data  on  freight  rates  from  the  United  States  it  was  thought 
pertinent  to  submit  data  and  charts  sho\ving  freight  rates  to  and  from  British  ports. 
These  figures  are  taken  from  reliable  British  sources  and  indicate  clearly  the  move  = 
ment  during  the  years  covered  not  only  in  British  freights  but  in  freights  throughout 
the  world.  Much  of  the  British  data  istaken  from  Fairplay,  one  of  theleading  marine 
journals,  and  much  also  from  the  Cardiff  and  South  Wales  journal  of  Commerce  Indus- 
trial ReAdew  for  1916. 

In  considering  ocean  freight  rates  from  the  United  States  during  the  past  two  years 
account  must,  of  course,  be  taken  of  the  great  decrease  in  the  merchant  shipping 
available  for  purely  commercial  uses  and  also  of  the  unusual  disturbance  in  trade 
routes  that  has  occurred  as  a  result  of  the  present  war.  The  working  of  the  economic 
laws  of  supply  and  demand  has  perhaps  never  been  as  clearly  illustrated,  at  least 
BO  far  as  the  shipping  industry  is  concerned,  as  at  the  present  time.  The  causes  for 
the  lack  of  merchant  tonnage  are  well  known,  namely  (1)  the  elimination  of  the 
merchant  ships  of  Germany  and  Austria-Hungary;  (2)  the  withdrawal  of  merchant 
ships  for  use  as  transports  and  for  other  military  and  naval  purposes;  and  (3)  the  loss 
of  ships  through  submarine  and  mining  operations.  Another  cause  for  the  shortage 
of  merchant  ships,  and  this  is  an  important  one,  although  it  is  seldom  stressed,  is  that 
the  shipyards  of  the  countries  at  war  have  been  given  over  almost  entirely  to  the  con- 
struction and  repair  of  naval  vessels,  with  the  result  that  the  merchant  shipping  of 
the  world  has  failed  to  receive  its  normal  accession  of  new  tonnage. 

Special  emphasis  should  be  laid  upon  the  fact  that  the  war  is  causing  unusual 
disturbance  of  merchant  shipping  by  reason  of  extraordinary  demands  for  tonnage 
in  the  trans-Atlantic  trade  for  mo\dng  enormous  cargoes  of  bulk  products  from 
American  to  British  and  French  ports.  This  demand  has  been  so  great  and  the  rates 
offered  so  high  that  ships  have  been  diverted  from  their  ordinary  routes  to  this  trans- 
Atlantic  trade. 

The  data  shown  in  the  accompanying  tables  are,  unless  otherwise  specified,  for 
line  or  berth  traffic,  since  these  data  are  considered  more  valuable  for  the  present 
purpose  and  could  be  more  easily  secured  for  the  entire  period  of  two  years.  "While 
charter  rates  are  regarded  by  many  as  a  better  indication  of  the  lack  or  scarcity  of 
tonnage,  they  are,  nevertheless,  subject  to  wider  fluctuations,  particularly  under 
the  present  war  conditions. 

Much  of  the  data  have  been  taken  from  the  freight  circulars  of  forwarding  agents, 
such  as  Lunham  and  Moore,  of  New  York  City,  and  of  the  export  freight  departments 
of  railroads,  such  as  the  Boston  &  Albany  Railroad  and  the  Boston  &  Maine  Railroad. 
The  rates,  as  (|  noted  in  these  circulars,  are  "for  general  information  only"  and  "sub- 
ject to  confirmation."  In  many  cases,  also,  the  rates  shown  in  the  accompanying 
tables  have  been  taken  from  actual  manifests. 

The  situation  as  affecting  charter  rates  has  not,  however,  been  overlooked.  A 
review  of  the  course  of  charter  rates  during  the  past  two  years  will  be  found  in  the 
report  of  the  New  York  district  office  of  this  bureau  and  in  an  extract  from  the  Jour- 
nal of  Commerce  of  March  4,  1916. 

Regarding  the  general  trend  in  freight  rates  between  January  1,  1914,  and  January 
1,  1916,  a  few  comments  seem  pertinent.  Take,  for  instance,  the  rates  on  grain  from 
New  York  and  Boston  to  Liveri^ool.  In  January,  1914,  the  rate  from  New  York  and 
Boston  to  Liveri^ool  was  4.1  cents  per  bushel;  one  year  later  the  rate  from  New  York 
to  Liverpool  was  18.3  cents  and  from  Boston  to  Liverpool  13.2  to  15.2  cents  per  bushel. 
In  January,  1916,  the  rate  from  New  York  to  Liverpool  was  40.6  cents  per  bushel 
and  from  Boston  to  Liverpool  it  was  34.5  to  36.5  cents.  From  these  data  it  appears 
that  the  rate  on  grain  from  New  York  to  Liverpool  was,  in  .January,  1916,  about  10 
times  as  high  as  in  January,  1914,  while  the  rate  from  Boston  to  Liverpool  was  only 
about  9  times  as  great.  It  will  be  noted  that  in  January  of  the  present  year  grain 
could  be  shipped  from  4  to  6  cents  per  bushel  less  from  Boston  than  from  New  York. 
The  higher  rate  from  New  York  is  probably  due  to  the  long  delays  and  high  demur- 
rage charges  resulting  from  the  present  congestion  at  the  port  of  New  York 

In  general,  it  can  be  said  that  the  increase  in  ocean  freight  rates  has  been  more  pro- 
nounced in  the  case  of  grain  than  in  the  case  of  any  other  important  commodity. 
Whereas  the  increase  in  the  rate  on  grain  from  New  York  to  Liverpool  has  been  about 
900  per  cent  in  the  past  two  years,  the  increase  in  the  rate  on  flour  has  been  about  500 
per  cent,  and  the  increase  in  the  rate  on  provisions  only  400  per  cent.  The  higher 
increase  in  the  rates  on  grain  may  be  accounted  for  by  the  fact  that  in  ordinary  times 
grain  is  carried  at  especially  low  rates  because  of  its  desirability  as  ballast  as  well  as 
for  the  reason  that  it  can  be  easily  taken  on  and  discharged. 


774      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Extended  comparisons  might  be  made  as  to  the  course  of  freight  rates  on  a  single 
commodity  from  one  port  or  from  several  ports.  In  fact,  it  is  impossible  in  this  short 
space  to  more  than  hint  at  possible  comparisons  and  deductions.  It  is  well,  however, 
to  call  attention  to  at  least  one  more  striking  feature  regarding  the  rates  from  New  York 
as  compared  with  Boston.  On  January  1,  1914,  the  rate  per  100  pounds  on  flour  to 
Liverpool  was  15  cents  both  at  New  York  and  Boston;  on  January  1,  1916,  the  rate 
from  Boston  to  Liverpool  was  80  cents  per  100  pounds,  while  the  rate  from  New  York 
was  90  cents. 

A  glance  at  the  tables  showing  week  by  week  from  January'  1,  1914,  to  March  11, 
1916,  the  quoted  rates  on  important  commodities  exported  from  New  York  to  a  num- 
ber of  European  ports,  shows  that  the  trend  in  rates  is  still  upward  and  at  an  acceler- 
ated rate.  Diu-ing  the  year  1914  the  rate  on  grain  increased  about  14  cents  per  bushel 
and  during  1915,  about  22  cents  per  bushel,  but  during  the  first  two  months  of  1916 
the  increase  was  10  cents  per  bushel. 

The  advances  in  rates  from  New  Orleans  to  European  ports  have  been  fully  as 
pronounced  as  the  increases  from  New  York  to  the  same  ports.  At  both  New  York 
and  New  Orleans  the  rate  on  cotton  shipments  to  J  iverpool  has  increased  about  900 
per  cent  in  the  past  two  years,  but  it  is  still  far  cheaper,  as  far  as  the  ocean  rate  is 
concerned,  to  ship  cotton  from  ^e\x  York,  in  spite  of  its  congested  condition,  than 
from  New  Orleans.  On  January  1.  1916.  the  rate  per  100  pounds  of  cotton  was  S2.25 
from  New  York  and  S3  from  New  Orleans. 

The  cost  of  shipping  other  commodities  is  considerably  higher  at  New  Orleans 
than  at  New  York.  To  ship  wheat  from  New  Orleans  to  Glasgow,  on  January  1.  1916, 
cost  54.8  cents  per  bushel,  while  the  rate  from  New  York  to  I  iverpool  was  40.6 
cents.  The  greater  distance  from  British  ports  is  not  the  only  reason  for  the  higher 
rates  from  New  Orleans  as  compared  with  Xew  York.  A  more  significant  reason  is 
to  be  found  in  the  greater  volume  of  commerce  and  the  greater  diversity  and  extent 
of  shipping  at  the  port  of  New  York.  These  facts  seem  pertinent  at  the  present 
time  when  considerable  stress  is  being  laid  upon  the  congestion  at  the  port  of  New 
York  and  when  efforts  are  being  made  to  divert  export  tratiic  to  other  ports. 

Regarding  freight  rates  from  Seattle  and  San  j  rancisco  it  would  seem  from  the 
data  at  hand  as  though  the  trans-Facific  rates  have  not.  in  general,  increased  in  the 
same  ratio  as  the  trans-Atlantic  rates.  In  this  connection  a  comparison  between  the 
rates  on  specified  commodities  from  New  York  to  Liverpool  and  between  Seattle  and 
Hongkong  may  be  illuminating.  The  rate  on  sack  flour  from  New  York  to  Liverpool 
increased  in  the  period  between  January  1.  1914,  and  January  1,  1916,  from  15  cents 
per  100  pounds  to  90  cents,  whereas  the  rate  on  the  same  commodity  from  Seattle  to 
Hongkong  increased  during  this  period  from  25  cents  per  100  pounds  to  75  cents. 
On  January  1,  1914.  the  rate  on  flour  from  New  York  to  1  iverpool  was  10  cents  per 
100  pounds  less  than  the  rate  on  flour  from  Seattle  to  Hongkong,  but  on  January  1, 
1916,  the  rate  from  New  York  to  I  iverpool  was  15  cents  more  per  100  pounds  than 
the  corresponding  rate  from  Seattle  to  Hong'ong. 

The  trans- Pacific  rates  on  other  commodities,  such  as  wheat,  lard,  and  meat  products, 
show  comparatively  little  increase  during  the  past  two  years.  This  is  more  significant  in 
the  case  of  wheat  than  in  the  case  of  lard  and  meat  products,  since  under  ordinary  con- 
ditions there  is  a  large  volume  of  wheat  moved  and  comparatively  little  lard  and  meat. 
The  rates  on  boots  and  shoes  show  a  comparatively  small  increase  during  the  past  two 
years;  in  other  words,  from  60  cents  to  only  75  cents  per  100  pounds.  In  certain 
other  commodities  the  trans- Pacific  rates  from  Seattle  have  increased  in  a  remarkable 
degree.  The  rate  on  agricultural  machinery  was  three  times  as  high  on  January  1, 
1916,  as  on  January  1,  1914,  while  the  rate  on  copper  was  twace  as  high;  the  rate  on 
sewing  machines,  over  two  and  one-half  times  as  high;  the  rate  on  leather  shipped  in 
cases,  about  five  times  as  high;  and  the  rate  on  canned  salmon,  twice  as  high.  The 
greatest  increases,  however,  have  been  in  steel  products.  On  January  1,  1914,  the 
cost  of  transporting  bar  ii'on,  sheet  iron,  or  wii'e  from  Seattle  to  Hongkong  was  only 
$3.60  per  short  ton,  but  on  January  1,  1916,  the  rate  was  $30,  there  ha\ing  been  an 
increase  of  S14  per  short  ton  since  October  1,  1915. 

Regarding  the  freisht  rates  on  coal  from  Welsh  ports,  which  are  shown  in  the  tables 
taken  from  the  Carditf  and  South  \Yales  Journal  of  Commerce  Industrial  Review  for 
1916,  it  Avill  be  seen  that  the  increase  in  coal  rates  from  Welsh  ports  has  been  even 
higher  than  our  own.  In  this  connection  it  is  well  to  remember  that  exports  of  coal 
are  a  big  factor  in  British  shipping,  since  they  insure  bulk  cargo  for  the  return  voyage 
to  many  of  the  ships  carrying  bulk  freight  to  Great  Britain,  and  that  in  ordinary  times 
the  outward  rate  on  coal  is,  therefore,  low.  At  present,  however,  since  British  ships 
are  not  in  general  pursuing  their  ordinary  routes  but  have  been  diverted  largely  to 
trans-Atlantic  trade  with  the  United  States,  the  tonnage  available  for  coal  has  been 
considerably  curtailed,  with  the  result  that  in  certain  directions  the  rates  from  Wales 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      775 

have  been  almost  prohibitive,  and  little  or  no  tonnage  has  been  offered  even  at  the 
present  abnormal  rates,  as,  for  example,  in  the  case  of  shipments  to  Genoa  and  Naples. 
This  fact  should  be  borne  in  mind  in  any  consideration  of  the  increases  during  the 
past  two  years  in  freight  rates  on  coal  from  Welsh  ports. 
Yours,  very  truly, 

E.  E.  Pratt,  Chief  of  Bureau. 
Hon.  J.  W.  Alexander, 

Chairman  Committee  on  the  Merchant  Marine  and  Fisheries, 

House  of  Representatives,  Washington,  D.  C. 

[Report  prepared  by  the  New  York  district  office  of  the  Bureau  of  Foreign  and  Domestic  Commerce.) 
Increase  ix  Ocean  Freight  Rates  from  January  I,  1914,  to  January  1,  1916. 

The  steady  increase  in  ocean  freight  rates  as  a  result  of  the  scarcity  of  cargo  tonnage 
and  other  conditions  arising  from  the  European  war  is  shown  in  the  accompanying 
figures  covering  the  principal  comniodities  exported  from  the  port  of  New  York. 

The  folio  iving  report  presents  the  facts  in  regard  to  the  increase  in  (1)  berth  rates 
and  (2 1  charter  rates. 

1.  increase  in  steamship  berth  rates. 

The  increase  in  the  steamship  berth  rates  from  the  port  of  New  York  to  various  Euro- 
pean ports  is  shown  in  the  accompanying  tables,  which  show  the  rates  on  sack  flour, 
compressed  cotton,  grain,  provisions,  and  measurement  goods.  These  tables  afford, 
therefore,  an  excellent  ba'-is  for  the  study  of  the  general  increase  in  freight  rates 
resulting  from  the  scarcity  of  cargo  tonnage  and  from  other  conditions. 

The  table  showing  rates  for  measurement  goods  covers  the  rates  for  practically  all 
articles  of  general  merchandise  as  well  as  for  a  large  group  of  miscellaneous  products 
including  steel  products,  machinery,  and  other  manufactured  articles. 

The  rates  for  cotton,  grain,  provisions,  and  sack  flour,  furnish  a  sufficient  basis  also 
for  deductions  regarding  the  increase  in  freight  rates  on  bulk  commodities  carried 
by  regular  line  steamships. 

'The  increases  between  January  1,  1914,  and  December  31,  1915,  in  the  steamship 
berth  rates  vary  considerably  for  the  specified  commodities.  The  general  increase 
during  the  period  has  been  between  500  and  1,000  per  cent.  The  increase  in  rates 
for  grain  has  been  particularly  marked. 

On  January'  31,  1914,  the  "berth  rate  for  grain  from  New  York  to  Liverpool  was 
$0.0G07  per  100  pounds  and  on  December  31,  1915,  $0.67,  an  increase  of  1,000  per  cent. 
Moreover,  on  the  latter  date,  with  the  exception  of  movement  by  Government  arrange- 
ments, it  was  practically  impossible  to  transport  grain  in  regular-line  steamships,  the 
bulk  of  the  grain  movement  having  been  turned  over  to  independent  vessels  chartered 
for  the  purpose. 

A  similar  increase  is  seen  in  the  berth  rates  on  cotton  from  New  York.  On  January 
3,  1914,  the  rate  per  100  pounds  on  cotton  from  New  York  to  Liverpool  was  28  cents, 
and  on  December  31,  1915,  $2.25. 

Th'e  same  general  ratio  of  increase  is  also  noticeable  in  the  berth  rates  for  provisions, 
sack  flour,  and  measurement  goods. 

Berth  rates  for  measurement  goods  during  the  period  studied  have  also  shown  a 
marked  increase.  On  January  3,  1914,  the  rate  per  100  pounds  for  the  carrying  of 
manufactured  articles  from  New  York  to  Liverpool  was  21  cents,  and  on  December 
31,  1915,  63  cents. 

While  the  most  noticeable  increases  in  steamship  berth  rates  have  been  m  the 
rates  from  the  United  States  to  European  ports,  still  the  great  demand  for  cargo  space 
for  transatlantic  tonnage  has  caused  similar  increases  in  the  rates  to  other  parts  of  the 
world.  One  very  striking  illustration  of  this  fact  is  the  rate  on  cement  from  New  York 
to  the  River  Plate.  Previous  to  the  war,  rates  on  cement  from  New  York  to  the  River 
Plate  were  very  low,  about  $5  per  ton,  but  to-day  an  export  manager  of  a  large  cement 
manufacturing  house  in  New  York  reports  that  he  is  in  a  position  to  quote  a  selling 
price  for  cement  in  New  York  of  68  cents  per  barrel  or  about  $3.40  per  ton,  while  the 
freight  rate  on  cement  from  New  York  to  River  Plate  ports  is  $16  per  ton.  The  great 
discrepancy  between  the  cost  of  the  manufactured  article  and  the  ocean  transporta- 
tion rate  is  evident.  Moreover,  in  this  connection  it  should  be  remembered  that  the 
rates  on  cement  from  England  to  SouthAmerican  ports  have  not  shown  so  great  a  rela- 
tive increase  as  the  rates  from  New  York  to  South  American  ports.  At  the  time  the 
quoted  rate  from  New  York  to  the  River  Plate  was  $14  per  ton,  the  rate  from  Liverpool 
to  the  River  Plate  was  approximately  $9  per  ton. 


776      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 
2.    IXCREASE   IN    CHARTER   RATES. 

The  great  increa.«es  in  the  steamship-berth  rates  is  paralleled  by  the  increases  in 
the  steamship  charter  rates  for  full  cargoes  from  New  York  to  European  ports.  The 
bulk  of  the  freight  tonnage  in  foreign  trade  is  moved  by  tramp  steamers  which  are 
owned  by  independent  steamship  companies  and  are  chartered  through  steamship 
agents  and  brokers  to  individuals  and  firms  desiring  steamers  for  the  movement  of 
full  cargoes. 

No  industry  is  more  directly  affected  by  conditions  of  the  demand  and  supply  than 
the  steamship  industry  and  the  creation  of  a  great  demand  for  cargo  space  in  any 
section  of  the  world's  markets  has  a  direct  effect  upon  steamship  charter  rates  and  berth 
rates  in  all  parts  of  the  world,  (barter  rates  fluctuate  directly  in  relation  to  the 
available  cargo  tonnage  and  the  demand  for  cargo  space.  The  great  increase  in  char- 
ter rates,  therefore,  presents  the  best  evidence  of  the  scarcity  of  tonnage  at  the 
present  time  and  the  need  of  additional  tonnage  if  any  relief  is  to  be  expected. 

Grain  charlers. — Charters  for  grain  are  usually  based  on  a  charter  of  a  steamship  for 
the  transportation  of  a  certain  number  of  quarters,  each  quarter  consisting  of  approxi- 
mately 480  pounds,  or  8  bushels.  On  January  3,  1914,  when  the  movement  of  grain 
was  at  a  very  low  ebb,  the  charter  rate  from  New  York  to  English  ports  was  2  shillings 
1^  pence  ($0.52)  per  quarter.  On  December  31,  1915,  the  charter  rate  was  about 
13  shillings  6  pence  (33.29)  per  quarter.  The  charter  rate  on  December  31,  1915,  on 
grain  from  New  York  to  Mediterranean  ports  was  18  shillings  ($4.38),  while  the  average 
rate  for  grain  between  the  United  States  and  other  European  ports  was  between  12 
and  14  shillings  ($2.92  to  $3.41)  per  quarter. 

One  interesting  feature  in  connection  with  the  increase  in  charter  rates  for  grain 
is  the  fact  that  it  occured  largely  during  the  late  summer  and  fall  of  1915.  In  the  fall 
of  1914,  although  there  was  a  very  large  demand  for  carsro  space  for  grain  movement, 
the  charter  rates  ranged  between  5  and  8  shillings  ($1.22  to  $1.95)  per  quarter.  Even 
as  late  as  April  3,  1915,  the  charter  rates  on  grain  from  New  York  to  European  ports 
were  about  9  shillings  ($2.19),  but  during  September,  October,  November,  and 
December,  1915,  there  was  a  very  great  increase  in  the  rates,  showing  not  only  a 
greater  demand  for  cargo  tonnage,  but  also  a  decrease  in  the  available  supply. 

Coal  charters. — The  movement  of  coal  between  the  United  States  and  foreign  coun- 
tries is  carried  on  primarily  on  a  charter  basis,  as  full  cargo  shipments  are  made.  The 
increase  in  the  charter  rates  on  coal  therefore  furnishes  another  criterion  of  the  ship- 
ping situation.  Previous  to  the  outbreak  of  the  European  war  there  was  very  little 
movement  of  coal  from  the  United  States  to  European  or  other  ports.  On  July  3, 
1914,  however,  a  schooner  was  chartered  for  the  movement  of  coal  from  Philadelphia 
to  Calais  at $1.10  per  ton.  Asa  result  of  the  conditions  resultingin  ascarcityof  steam- 
ship tonnage  a  steamer  was  chartered  on  December  31,  1915,  for  the  movement  of 
coal  from  Norfolk  to  Boston  at  $3.25  per  ton  dead-weight. 

Petroleum  charters. — In  the  foreign  trade  petroleum  is  carried  largely  in  tank 
steamers.  There  is  therefore  a  definite  limit  to  the  amount  of  steamship  tonnage 
available  for  the  handling  of  petroleum  in  bulk.  Nevertheless  the  increase  in  the 
charter  rates  for  petroleum  has  been  marked,  and  it  is  practically  impossible  at  the 
present  time  to  secure  charters  for  tank  steamers  at  any  rate  on  account  of  the  great 
scarcity  of  tonnage. 

On  April  4,  1914,  the  charter  rates  for  the  movement  of  case  oil  from  New  York  to 
the  Far  East  was  17i  cents  per  case.  On  December  31.  1915,  a  steamer  was  chartered 
from  New  York  to  AustraUa  at  a  charter  rate  of  $1.50  per  case,  and  a  sailing  vessel 
was  chartered  for  the  movement  of  petroleiim  in  baiTels  from  Philadelphia  to  the 
United  Kingdom  at  13  shillings  6  pence  ($3.29)  per  ton. 

Miscellaneous  charters. — A  great  part  of  the  movement  of  freight  by  chartered  vessels 
is  carried  on  under  different  forms  of  charter.  There  has  been  a  marked  tendency  in 
shipping  circles  to  adopt  the  time  charter,  and  the  increase  in  the  rates  for  time  char- 
ters for  steamships  and  sailing  vessels  has  been  remarkable.  Time  charters  for  indi- 
vidual steamsliips  are  usually  based  on  (1)  the  payment  of  a  lump  sum  covering  the 
period  of  the  voyage,  (2)  payment  on  a  monthly  basis,  or  (3)  a  payment  of  a  lump 
sum  per  ton  of  dead-weight  capacity  of  vessel. 

A  typical  time  charter  in  January,  1914,  for  a  steamer  in  the  trans-Atlantic  trade, 
for  one  round  trip,  was  made  at  the  rate  of  3  shillings  7^  pence  ($0.88)  per  ton  dead- 
weight. In  December,  1915,  a  steamer  of  about  the  same  tonnage  was  chartered  for 
one  round  trip  in  the  trans-Atlantic  trade  on  a  basis  of  30  shillings  ($7.30)  per  ton 
dead-weight. 

This  illustration  is  typical  of  a  number  of  others  of  similar  character.  ThiLs,  a 
steamer  of  about  2,500  tons  was  chartered  for  12  months  in  April,  1914,  on  the  basis 
of  2  shillings  lOi  pence  ($0.70)  per  ton  dead-weight.     In  October,  1915,  not  only  was 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      777 

it  extremely  difficult  to  secure  a  charter  covering  so  long  a  period  of  time,  but  a  steamer 
of  approximately  the  same  tonnage  was  chartered  for  one  round  trip  from  the  United 
States  to  the  Far  East  on  the  basis  of  15  shillings  ($3.65)  per  ton  deadweight.  Time 
charters  for  larger  vessels,  especially  for  particular  trades,  have  gone  as  high  as  $54,000 
per  month,  as  in  the  case  of  American  vessels  used  in  the  cotton  trade  with  Germany 
last  fall  when  it  was  possible  to  ship  raw  cotton  to  Bremen  direct. 

Another  striking  illustration  of  the  tremendous  increase  in  charter  rates  is  shown 
by  the  charter  of  a  small  steamship  of  989  tons  for  the  West  Indian  and  coastwise 
trade,  on  December  31,  1915,  for  12  months  at  the  rate  of  87,000  per  month. 

Charters  to  South  America. — The  increase  in  charter  rates  for  the  movement  of  goods 
between  the  United  States  and  South  America  is  of  particular  interest.  On  January 
3,  1914,  a  steamer  of  about  3,200  tons  was  chartered  for  the  movement  of  coal  from  the 
United  States  to  Rio  de  Janeiro  at  15  shillings  ($3.65 )  per  ton.  On  December  31,  1915, 
a  Norwegian  steamer  of  only  2,400  tons  was  chartered  for  the  movement  of  coal  from 
Atlantic  ports  to  Rio  de  Janeiro  on  a  basis  of  52  shillings  6  pence  ($12.70\  and  a  schooner 
of  only  1,000  tons  was  chartered  for  the  movement  of  coal  from  Norfolk  to  Para  on  the 
basis  of  $7.50  per  ton.  In  view  of  the  fact  that  the  cost  of  the  coal  at  Norfolk  was 
approximately  $2.85,  the  relation  of  the  steamship  rate  to  the  cost  of  material  was 
extremely  noticeable. 

One  of  the  commodities  that  has  been  severely  affected  by  the  increase  in  the  freight 
rates  is  lumber.  On  January  3.  1914,  a  Russian  steamer  of  about  1,500  tons  was  char- 
tered for  the  movement  of  lumber  from  one  of  the  Gulf  ports  to  the  River  Plate  at  105 
shillings  ($25.55)  per  standard  (2.000  board  feet).  On  December  31,  1915,  a  sailing 
bark  of  1,500  tons  registry  was  chartered  for  the  movement  of  timber  from  the  Gulf  to 
British  ports,  a  shorter  voyage,  at  320  shillings  ($77.86)  per  standard. 

Another  striking  illustration  of  the  great  increase  in  the  freight  rates  during  the  last 
12  months  is  shown  by  the  fact  that  on  January  3,  1914,  a  steamer  of  2,200  tons  register 
was  chartered  for  the  New  York  and  South  American  trade  at  the  rate  of  4  shillings  7^ 
pence  ($1.13)  per  ton  dead-weight,  and  in  December  31,  1915,  a  Norwegian  bark  of 
1,500  tons  register  was  chartered  for  the  movement  of  nitrate  from  South  America  to 
the  United  States  on  a  basis  of  70  shillings  ($17.03)  per  ton  dead-weight. 

General  summary. — The  above  tables  and  facts  bring  out  four  salient  points: 

1.  A  very  steady  and  remarkable  increase  in  steamf5hip  rates  fi-om  New  York  to  all 
parts  of  the  world' is  noticeable.  This  has  been  particularly  true  of  steamship  berth 
rates  and  even  been  more  marked  in  the  matter  of  charter  rates. 

2.  A  scarcity  in  steamship  tonnage,  which  was  noticeable  at  the  outbreak  of  the  war 
on  account  of  "the  withdrawal  of  the  German  and  Aastrian  i.ierchant  shipping,  and  the 
requisition  of  a  large  part  of  the  British  marine  under  Admii-alty  orders,  has  been 
instrumental  in  causing  a  decrease  in  the  supply  of  steamship  tonnage.  The  decrease 
of  steamship  tonnage  has  been  accompanied  by  a  steady  growth  in  the  demand  for 
cargo  space  for  the  movement  of  goods  from  New  York  to  Europe.  As  a  result,  steam- 
ship rates  have  continued  and  will  continue  to  mount  unless  some  changes  can  be 
brought  about  in  the  present  situation. 

3.  The  most  important  feature  of  the  situation  from  the  standpoint  of  the  United 
States  is  the  fact  that  the  tremendous  demand  for  cargo  space  coupled  with  the  scarcity 
of  steamship  tonnage  in  the  transatlantic  trade  has  seriously  affected  the  trade  of  the 
United  States  withneutral  and  outlying  countries,  such  as  South  America,  Australia, 
South  Africa,  and  the  Far  East.  It  is'practically  impossible  to  secm-e  any  tonnage 
either  sailing  or  steam  except  at  exorbitant  rates  for  the  transportation  of  goods 
from  the  United  States  to  those  countries.  This  is  due  to  the  length  of  the  voyage  and 
to  the  fact  that  greater  profits  can  be  secured  in  the  shorter  voyage  at  transatlantic 
rates. 

4.  There  is  a  general  feeling  among  shippers  of  goods  from  the  port  of  New  York  that 
the  Government  might  be  able  to  materially  assist  the  situation  by  seeming  and  opera- 
ating  vessels  which  would  be  entered  into  service  for  the  ]iurpose  of  moving  American 
good's  to  such  markets  as  Australia,  the  Far  East,  and  South  Afiica,  for  which  at  the 
present  time  it  is  practically  impossible  to  secure  cargo  space  at  a  rate  which  will 
enable  the  customer  to  purchase  the  goods. 


778      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


Ocean  freight  rates  from  Neiv  York  to  European  ports. 
GRAIN,  PER  BUSHEL. 


British  ports. 

Danish 
port, 
Copen- 
hagen. 

Dutch 
port, 
Rotter- 
dam. 

French  ports. 

Italian  ports. 

Date. 

London. 

Liver- 
pool. 

«las-        Hull, 
gow.         "^'^• 

Havre. 

Mar- 
seille. 

Genoa. 

Naples. 

1914. 

Jan.     3 
10 
17 
24 
31 

Feb.    7 
14 
21 
28 

Mar.     7 
14 
21 
28 

Apr.  11 
18 
25 

May     2 

9 

16 

23 

29 

Cents. 
4.6 
4.6 
4.1 
4.1 
4.1 
4.1 
4.1 
4.1 
4.1 
4.1 
3.5 
3.5 
3.5 
3.5 
3.5 
3.5 
3.5 
3.5 
3.0 
3.0 
3.0 
3.0 
3.0 
3.0 
3.0 
3.5 
4.1 
5.1 
5.1 

Cents. 
4.1 
4.1 
4.1 
4.1 
4.1 
4.1 
3.5 
3.5 
3.0 
3.0 
2.5 
2.5 
2.5 
2.5 
2.5 
2.5 
2.5 
2.5 
3.0 
3.0 
3.0 
3.0 
3.0 
4.1 
5.1 
5.1 
5.1 
5.1 
5.1 

Cents. 
4.1 
4.1 
4.1 
4.1 
4.1 
4.1 
4.1 
4.1 
4.1 
4.1 
3.5 
3.0 
3.0 
3.0 
3.0 
4.1 
3.0 
3.0 
3.0 
3.0 

Cents. 
5.1 
5.1 
5.6 
5.6 
5.1 
4.6 
1          4.6 
1          4.6 
4.1 
4.1 
4.1 
4.1 
4.1 
4.1 
4.1 
4.1 
3.5 
3.5 
3.5 
3.5 
3.5 
3.5 
3.5 
3.5 
3.5 
3.5 
5.1 
5.6 
5.6 

Cents. 
5.7 
6.1 
6.1 
6.1 
5.7 
5.7 
5.7 
5.7 
5.7 
5.7 
5.7 
5.7 
5.7 
5.7 
5.7 
5.7 
5.7 
5.7 
5.7 
5.7 
5.7 
5.7 
5.3 
5.3 
5.3 
6.1 
6.1 
6.1 
6.1 

Cents. 
5.3 
4.5 
3.8 
3.8 
3.8 
4.0 
4.3 
4.3 
4.3 
4.0 
4.0 
4.0 
3.5 
3.5 
3.5 
3.5 
3.5 
3.8 
3.8 
3.5 
3.3 
3.3 
3.0 
3.0 
3.0 
3.5 
6.3 
6.4 
6.0 

Cents. 
8.4 
8.4 
8.0 
8.0 
7.6 
7.6 
7.6 
7.6 
7.6 
7.2 
7.2 
6.5 
6.5 
6.5 
6.5 
7.2 
6.5 
6.5 
6.5 
6.1 
6.1 

•    6.1 
6.1 
6.1 
6.1 
6.1 
7.2 
7.2 
7.6 

Cents. 
9.1 
9.1 
8.4 
8.4 
8.4 
7.6 
7.6 
7.6 
8.0 
8.0 
7.6 
7.6 
7.6 
6.1 
6.5 
6.9 
6.5 
6.5 
7.6 
7.6 
7.6 
7.6 
7.6 
7.6 
8.4 
8.7 
8.7 
8.7 
9.5 

Cents. 
9.1 
9.1 
8.4 
8.4 
6.9 
7.2 
7.2 
7.2 
6.1 
6.1 
5.3 
5.3 
4.6 
4.2 
4.2 
4.2 
6.1 
6.1 
5.3 
5.3 
5.3 
5.3 
6.1 
6.1 
6.1 
6.9 
6.9 
6.9 
8.4 

1 

Cents. 

10.7 

10.7 

9.9 

9.9 

1           9.1 

9.1 

1           9.1 

!           9-1 
9.1 
9.1 

\           9.1 
9.1 
9.1 
9.1 
9.1 

:           9.1 
9.1 
9.1 
6.1 
6.1 
6.1 

June    6 
13 
20 
27 

July     3 
11 
18 

Aug.     1 
81 

4.1 
4.1 
4.1 
4.1 
4.1 
4.1 
3.0 
3.0 

6.1 
9.1 
'           9.1 
9.1 
8.4 
8.4 
8.4 
8.4 

151 

22' 

291 

Sept.    5 
12 

6.6 
6.6 
6.6 
7.1 
7.1 
7.1 
7.1 
7.6 
8.6 
13.2 
14.2 
14.2 
15.2 
15.2 
16.2 
17.2 
18.3 

18.3 
19.3 

5.1 

5.1 

5.1 

7.1 

7.1 

8.1 

7.6 

7.1 

8.1 

12.2 

13.2 

13.2 

13.2 

14.2 

16.2 

16.2 

17.2 

18.3 
18.3 
20.3 
22.3 
21.3 
21.3 
22.3 
24.3 
24.3 
24.3 
24.3 
24.3 
24.3 
24.3 
24.3 
24.3 
22.3 
22.3 
22.3 
24.3 
22.3 
24.3 

6.1 
6.1 
6.1 

7.1 

5.1 

6.6 

7.1 

8.1 

8.1 

8.1 

8.1 

8.1 

13.2 

14.2 

14.2 

14.2 

15.2 

16.2 

17.2 

18.3 

18.3 
18.3 
19.3 
19.3 
20.3 
20.3 
20.3 
18.3 
24.3 
24.3 
24.3 
24.3 
24.3 
24.3 
24.3 
24.3 
21.3 
21.3 
22.3 
24.3 
22.3 
24.3 

13.7 
12.2 
12.9 
12.9 
15.2 
15.2 
15.2 
16.7 
15.3 
18.3 
18.3 
18. 3 
18.3 
25.9 

7.6 
7.6 
8.4 
8.4 
8.4 
8.7 

19 

9.9 
9.9 
9.9 
11.0 
12.2 
13.7 
13.7 
16.7 
19.0 
19.8 
19.8 
24.3 
25.9 

10.7 
12.2 
12.2 
12.2 

12.2 

26 

13.7 

Oct.     3 

11.0 
11.0 

13.7 

10 

16.7 

17 

16.7 

24 

12.2 
12.2 
12.2 
12.2 
12.2 
12.2 

15.2 
15.2 
17.5 
17.5 
17.5 
19.8 
27.4 
27.4 
30.4 

16.7 

31 

16.7 

Nov.    7 

17.5 

14 

19.0 

21 

19.0 

28 

20.5 

Dec.    5 

27.4 

27.4 

12 

27.4 

19 

30.4 

24 

30.4 

30.4 
30.4 
2S.9 
33.5 
33.5 
30.4 
30.4 
30.4 
33.5 
33.5 

1915. 
Jan      2 

9 

36.5 

10 

23 

24.3 
22.3 
22.3 
22.3 
24.3 
24.3 
24.3 

36.0 

30 

Feb.    6 

13 

20 

27 

Mar     6 

13 

20 

27 

42.6 
42.6 
42.6 
36.5 
36.5 
33.5 
33.5 
33.5 
27.4 
27.4 

Apr.     3 
10 

24.3 
24.3 
22.3 
21.3 
22.3 
22.3 
24.3 
22  3 
24.3 

36.5 
3fi.5 
30.4 
30.4 
30.4 
30.4 
30.4 
30.4 
30.4 

39.5 
39.5 

36.5 

17 

24.3 
21.3 
21.3 
21.3 

36.5 

24 

May     1 

8 

27.4 

33.5 

15 

33.5 

22 

'.'.'.'.'..'.'.'. 

33.5 
31.9 

33.5 

29 

3L9 

SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      779 

Ocenn  freight  rates  from  Neiv  York  to  European  ports — Continued. 
GRAIN,  PER  BUSHEL— Continued. 


British  ports. 

Danish 
port, 
Copen- 
hagen. 

Dutch 
port, 

Rotter- 
dam. 

French  ports. 

Italian  ports. 

Date. 

London. 

Liver- 
pool. 

Glas- 
gow. 

Hull. 

Havre. 

Mar- 
seille. 

Genoa. 

Naples. 

1915. 
June    5 

Cents. 
24.3 
24.3 
22.3 
21.3 
21.3 
21.3 
21.3 
21.3 
21.3 
20.3 
20.3 
20.3 
22.3 
24.3 
28.4 
28.4 
30.4 
36.5 
40.6 
40.6 
40.6 
40.6 
40.6 
40.6 
40.6 
38.5 
38.5 
40.6 
40.6 
40.6 
40.6 

40.6 
42.6 
44.6 
44.6 
44.6 
48.7 
50.7 
50.7 
50.7 
50.7 

Cents. 
24.3 
24.3 
24.3 
21.3 
21.3 
18.3 
20.3 
21.3 
21.3 
20.3 
20.3 
20.3 
21.3 
24.3 
26.4 
28.4 
30.4 
36.5 
40.6 
40.6 
40.6 
40.6 
40.6 
40.6 
40.6 
38.6 
38.6 
40  6 
40.6 
40.6 
40.6 

40.6 
42.6 
44  6 
44.6 
44.6 
48.7 
50.7 
50.7 
50.7 
50.7 

Cents. 

Cents. 
24.3 
22.3 
21.3 
21.3 
16.2 
16.2 
18.2 
21.3 
22.3 
24.3 
24.3 
24.3 
30.4 
30.4 
30.4 
30.4 
32.4 
36.5 
48.7 
48.7 
48.7 
48.7 
48.7 
48.7 
48.7 
48.7 
48.7 
48.7 
48.7 
48.7 
48.7 

48.7 
48.7 
48.7 
48.7 
48.7 
48.7 
50.7 
60.8 
60.8 
60.8 

Cents. 
28.1 
28.1 
28.1 
27.4 
28.9 
28.9 
31.9 
31.9 
31.9 
36.5 
36.5 
36.5 
36.5 
36.5 
30.5 
30.5 

Cents. 

Cents. 

Cents. 
30  4 
30.4 
30.4 
30.4 
30.4 
30.4 
30.4 
30.4 
30.4 
33.5 
33.5 
35.0 
35.0 
35.0 
35.0 
35.0 
36.5 
36.5 
38.0 
38.0 
39.5 
39.5 

Cents. 
31.9 
31.9 

Cents. 
31  9 

12 

31  9 

19 

22.3 
21.3 
21.? 
21.3 
22.3 
22.3 
22.3 
22.3 
24.3 
24.3 
24.3 
24.3 
30.4 
30.4 
30.4 
36.5 
40.6 
38.5 
36.5 
40.6 
40.6 
40.6 
40.6 
40.6 
38.5 
38.5 
40.6 
40.6 
40.6 

40.6 
40.6 
42.6 
44.6 
44.6 
44.6 
48.7 
46.6 
46.6 
46.6 

20 

July     2 

10 

17 

25.9 
27.4 
27.4 
33.5 
36.5 
36.5 
36.5 
36.5 
36.5 
36.5 
35.0 
35.0 
35.0 
35.0 
38.0 
35.0 
37.5 
37.5 
37.5 

24 

36.5 
36.5 
36.5 
36.5 
36.5 
36.5 
36.5 
36.5 
36.5 
36.5 
36.5 
45.6 
45.6 
45.6 
45.6 
45.6 
45.0 
51.7 
54.8 
57.8 
60.8 

36  5 

31 

36  5 

Aug.    7 

36  5 

14 
21 

36.5 
36  5 

28 

30  5 

Sept.    4 

30  5 

^     11 

30.5 

18 

30  5 

25 

36  5 

Oct.     2 

36  5 

9 

45.6 

45.6 

16 

45  6 

23 

48.7 

45  6 

30 

45  6 

Nov.    5 

45.6 
45.6 

13 

54.8 
54.8 
60.8 
60.8 
60.8 

20 

51.7 

27 

54  8 

Dec.    4 

37.0 

57.8 

11 

60.8 

18 

79.1 

24 

79.1 

31 

1916. 
Jan.     8 

15 

22 

78.0 
78.0 

29 

Feb.    5 

11 

19 

26 

Mar.    4 

11 

SACK  FLOUR,  PER  100  POUNDS. 


1914. 

Jan. 

3 

15.0 

14.0 

17.0 

18.0 

18.0 

13.0 

22.5 

20.0 

19.0 

19.0 

10 

15.0 

14.0 

17.0 

18.0 

17.0 

13.0 

22.5 

20.0 

19.0 

19.0 

17 

13.0 

12.0 

15.0 

17.0 

17.0 

13.0 

22.5 

20.0 

19.0 

19.0 

24 

13.0 

12.0 

1.5.0 

17.0 

17.0 

13.0 

22.5 

20.0 

19.0 

19.0 

31 

13.0 

12.0 

15.0 

17.0 

17.0 

13.0 

22.5 

20.0 

19.0 

19.0 

Teh. 

7 

13.0 

12.0 

15.0 

17.0 

17.0 

12.0 

22.5 

20.0 

19.0 

19.0 

14 

13.0 

12.0 

15.0 

17.0 

17.0 

12.0 

22.5 

20.0 

19.0 

19.0 

21 

13.0 

12.0 

15.0 

17.0 

17.0 

12.0 

22.5 

20.0 

19.0 

19.0 

28 

13.0 

12.0 

15.0 

17.0 

17.0 

12.0 

22.5 

20.0 

19.0 

19.0 

Mar, 

7 

13.0 

12.0 

1.5.0 

17.0 

17.0 

12.0 

22.5 

20.0 

19.0 

19.0 

14 

12.0 

11.0 

15.0 

17.0 

17.0 

12.0 

22.5 

20.0 

19.0 

19.0 

21 

12.0 

11.0 

15.0 

17.0 

17.0 

12.0 

22.5 

18.0 

19.0 

19.0 

28 

12.0 

n.o 

15.0 

17.0 

17.0 

12.0 

22.5 

18.0 

19.0 

19.0 

Apr. 

n 

12.0 

ILO 

14.0 

17.0 

17.0 

11.0 

18.0 

18.0 

19.0 

19.0 

18 

12.0 

11.0 

14.0 

17:0 

17.0 

11.0 

18.0 

18.0 

19.0 

19.0 

25 

11.0 

10.0 

13.0 

15.0 

17.0 

10.0 

18.0 

18.0 

19.0 

19.0 

May 

2 

ILO 

10.0 

13.0 

15.0 

17.0 

10.0 

18.0 

18.0 

19.0 

19.0 

9 

11.0 

10.0 

13.0 

15.0 

17.0 

10.0 

18.0 

18.0 

19.0 

19.0 

16 

11.0 

10.0 

13.0 

15.0 

17.0 

10.0 

18.0 

18.0 

19.0 

19.0 

?3 

11.0 

10.0 

13.0 

15.0 

17.0 

10.0 

18.0 

18.0 

19.0 

19.0 

29 

11.0 

10.0 

13.0 

15.0 

17.0 

10.0 

18.0 

18.0 

19.0 

19.0 

June 

6 

11.0 

10.0 

13.0 

15.0 

17.0 

10.0 

18.0 

18.0 

19.0 

19.0 

13 

11.0 

10.0 

13.0 

15.0 

17.0 

10.0 

18.0 

18.0 

19.0 

19.0 

20 

11.0 

10.0 

13.0 

15.0 

17.0 

10.0 

18.0 

18.0 

19.0 

19.0 

27 

11.0 

10.0 

13.0 

15.0 

17.0 

10.0 

18.0 

18.0 

19.0 

19.0 

780       SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


Ocean  freight  rates  from.  New  York  to  European  ports — Continued. 
SAC  K  FLOUR,  PER  100  POUNDS— Continued. 


British  ports. 

Danish 

Dutch 

French  ports. 

Italian  ports. 

port, 
Copen- 
hagen. 

port, 
Rotter- 
dam. 

Date. 

London. 

Liyer- 
pool. 

Glas- 
gow. 

Hull. 

Havre. 

Mar- 
seille. 

Genoa. 

Naples. 

1914. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

Cent^. 

Cents. 

Cents. 

Cents. 

July     3 

13.0 

12.0 

14.0 

17.0 

19.0 

10.0 

18.0 

18.0 

19.0 

19.0 

11 

13.0 

12.0 

14.0 

17.0 

20.0 

10.0 

18.0 

18.0 

19.0 

19.0 

18 

13.0 

12.0 

14.0 

17.0 

20.0 

11.0 

18.0 

18.0 

19.0 

19.0 

Aufr.    1 

8' 

151 

13.0 

12.0 

14.0 

17.0 

20.0 

11.0 

18.0 

18.0 

19.0 

19.0 

221 

291 

Sept.    5 

2i.6' 

20.' 6' 

""22."6' 

""2.5.'6' 

"   "32.0 

"'""mo' 

'""so.'o' 

""'mo' 

""43.'5" 

43.'5 

12 

21.0 

20.0 

23.0 

25.0 

32. 0 

21.0 

30.0 

30.0 

43.5 

43.5 

19 

21.0 

20.0 

23.0 

25.0 

32.0 

21.0 

25.0 

34.0 

36.9 

36.9 

26 

21.0 

20.0 

23.0 

25.0 

32.0 

21.0 

25.0 

34.0 

36.9 

36.9 

Oct.     3 

22.0 

21.0 

24.0 

26.0 

32.0 

2.5.0 

25.0 

35.0 

34.0 

34.0 

10 

22.0 

21.0 

24.0 

26.0 

32.0 

25.  0 

25.0 

35.0 

34.0 

34.0 

17 

22.0 

21.0 

24.0 

26.0 

35.0 

25.0 

26.3 

35.0 

34.0 

34.0 

24 

22.0 

21.0 

24.0 

26.0 

35.0 

25.0 

26.3 

35.0 

34.0 

34.0 

31 

22.0 

21.0 

25.0 

26.0 

35.0 

25. 0 

29.0 

3.5.0 

34.0 

34.0 

Noy.    7 

25.0 

24.0 

26.0 

28.0 

35.0 

27.0 

36.0 

37.5 

35.0 

35.0 

14 

25.0 

24.0 

27.0 

28.0 

40.0 

30.0 

40.0 

42.5 

40.0 

40.0 

21 

27.0 

26.0 

29.0 

30.0 

45.0 

32.0 

40.0 

45.0 

45.0 

45.0 

28 

27.0 

26.0 

29.0 

30.0 

55.0 

32.0 

40.0 

4.5.0 

50.0 

50.0 

Dee.     5 

27.0 

26.0 

29.0 

30.0 

60.0 

40.0 

.  42. 0 

50.0 

55.0 

55.0 

12 

30.0 

26.0 

29.0 

30.0 

60.0 

55.0 

47.0 

55.0 

60.0 

60.0 

19 

35.0 

26.0 

29.0 

30.0 

65.0 

55.0 

47.0 

55.0 

65.0 

65.0 

24 

35.0 

35.0 

30.0 

35.0 

65.0 

55.0 

47.0 

55.0 

65.0 

65,0 

W  1915. 

Jan.     2 

40.0 

40.0 

35.0 

35.0 

60.0 

55.0 

47.0 

50.0 

65.0 

65.0 

9 

40.0 

40  0 

40.0 

40.0 

65.0 

60.0 

52.5 

5.5.0 

70.0 

70.0 

16 

40.0 

40  0 

40.0 

40.0 

70.0 

60.0 

100.0 

55.0 

70.0 

70.0 

23 

40.0 

40  0 

40.0 

40.0 

70.0 

60.0 

100.0 

55.0 

70.0 

70.0 

30 

40.0 

40.0 

40.0 

40.0 

70.0 

60.0 

75.0 

55.0 

75.0 

75.0 

Feb.     6 

40.0 

40  0 

40.0 

40.0 

70.0 

60.0 

75.0 

5.5.0 

75.0 

75.0 

13 

40.0 

40  0 

40.0 

40.0 

75.0 

70.0 

75.0 

5.5.0 

75.0 

75.0 

20 

40.0 

40.0 

40.0 

40.0 

75.0 

70.0 

75.0 

55.0 

75.0 

75.0 

27 

40.0 

40.0 

40.0 

40.0 

75.0 

70.0 

75.0 

55.0 

75.0 

75.0 

Mar.    6 

40.0 
40.0 
40.0 

40.0 
40.0 
40.0 

40.0 
40.0 
40.0 

75.0 
85.0 
75.0 

70.0 
70.0 
80.0 

63.0 
63.0 
75.0 

60.0 
6.5.0 
75.0 

75.0 
75.0 
75.0 

75.0 

13 

75.0 

20 

46.'6' 

75.0 

27 

40.0 

40.0 

40.0 

40.0 

75.0 

80.0 

63.0 

60.0 

75.0 

75.0 

Apr.    3 

45.0 

45.0 

45.0 

45.0 

75.0 

80.0 

63.0 

60.0 

75.0 

75.0 

10 

45.0 

45.0 

45.0 

45.0 

75.0 

80.0 

63.0 

60.0 

75.0 

75.0 

17 

45.0 

45.0 

40.0 

45.0 

75.0 

80.0 

58.0 

55.0 

7.5.0 

75.0 

24 

45.0 

40.0 

40.0 

45.0 

7.5.0 

80.0 

58.0 

50.0 

75.0 

75.0 

May     1 

45.0 

40.0 

45.0 

45.0 

75.0 

80.0 

58.0 

50.0 

75.0 

75r0 

8 

45.0 

40.0 

45.0 

45.0 

75.0 

80.0 

58.0 

50.0 

75.0 

75.0 

15 

50.0 

50.0 

45.0 

45.0 

60.0 

75.0 

58.0 

50.0 

75.0 

75.0 

22 

45  0 
50.0 

40.0 
45.0 

45.0 
45.0 

60.0 
60.0 

65.0 
6.5.0 

58.0 
58.0 

50.0 
45.0 

75.0 
75.0 

75.0 

29 

'"'so.'o' 

75.0 

June    5 

50.0 

45.0 

50.0 

45.0 

60.0 

65.0 

50.0 

42.0 

75.0 

75.0 

12 

50.0 

45.0 

50.0 

45.0 

55.0 

65.0 

50.0 

42.0 

75.0 

75.0 

19 

45.0 

45.0 

5a  0 

45.0 

55.0 

50.0 

50.0 

42.0 

75.0 

75.0 

26 

4.5.0 

45.0 

50.0 

45.0 

5.5.0 

50.0 

50.0 

45.0 

75.0 

75.0 

July     2 

45.0 

40.0 

50.0 

45.0 

50.0 

50.0 

50.0 

45.0 

75.0 

75.0 

10 

45.0 

40.0 

50.0 

4.5.0 

50.0 

50.0 

50.0 

45.0 

75.0 

75.0 

17 

45.0 

40.0 

50.0 

45.0 

50.0 

50.0 

50.0 

45.0 

75.0 

75.0 

24 

45.0 

4.5.0 

50.0 

45.0 

50.0 

50.0 

55.0 

45.0 

68.0 

68.0 

31 

45.0 

45.0 

50.0 

45.0 

50.0 

50.0 

55.0 

45.0 

68.0 

68  0 

Aug.    7 

45.0 

4.5.0 

50.0 

45.0 

50.0 

50.0 

5.5.0 

4,5.0 

68.0 

68.0 

14 

45.0 

45.0 

50.0 

4.5.0 

60.0 

50.0 

6.5.0 

50.0 

65.0 

65.0 

21 

50.0 

4.5.0 

55. 0 

50.0 

70.0 

60.0 

65.0 

55.0 

65.0 

65  0 

28 

50.0 

45.0 

.55.0 

60.0 

70.0 

60.0 

65.0 

60.0 

65.0 

65.0 

Sept.   4 

50.0 

4.5.0 

55.0 

55.0 

70.0 

60.0 

65.0 

6.5.0 

65.0 

65  0 

11 

50.0 

45.0 

55.0 

55.0 

70.0 

60.0 

65.0 

6.5.0 

65.0 

65.0 

18 

50.0 

45.0 

55.0 

55.0 

70.0 

60.0 

65.0 

65.0 

65.0 

65.0 

25 

60.0 

55.0 

60.0 

60.0 

70.0 

60.0 

70.0 

65.0 

70.0 

70.0 

Oct.      2 

65.0 

65.0 

6.5.0 

6.5.0 

75.0 

6.5.0 

80.0 

70.0 

75.0 

75.0 

9 

70.0 

65.0 

70.0 

70.0 

75.0 

70.0 

90.0 

70.0 

80.0 

80.0 

16 

70.0 

65.0 

70.0 

70.0 

75.0 

70.0 

90.0 

80.0 

80.0 

80.0 

23 

7.5.0 

70.0 

70.0 

70.0 

75.0 

70.0 

90.0 

80.0 

80.0 

80.0 

30 

75.0 

70.0 

70.0 

70.0 

75.0 

70.0 

100.0 

80.0 

80.0 

80.0 

Nov.    5 

75.0 

70.0 

75.0 

7.5.0 

80.0 

70.0 

100.0 

90.0 

80.0 

80.0 

13 

75.0 

75.0 

7.5.0 

75.0 

80.0 

70.0 

100.0 

90.0 

80.0 

80.0 

20 

80.0 

7.5.0 

75.0 

75.0 

85.0 

90.0 

100.0 

100.0 

90.0 

90.0 

27 

80.0 

75.0 

75.0 

75.0 

85.0 

90.0 

100.0 

100.0 

90.0 

90.0 

Owing  to  conditions  abroad,  no  rates  are  quoted  on  freight  of  any  kind  to  any  European  ports. 


SHIPPING  BOARD,  NAV.'^iL  AUXILIARY,  AND  MERCHANT  MARINE.      781 


Ocean  freight  rates  from  New  York  to  European  ports — Continued. 
SACK  FLOUR,  PER  100  POUNDS— Continued. 


British 

ports. 

Danish 
port, 

Dutch 
port. 

French  ports. 

Italian  ports. 

Date 

London. 

Liver- 
pool. 

Glas- 
gow. 

Hull. 

Copen- 
hagen. 

Rotter- 
dam. 

Havre. 

Mar- 
seille. 

Genoa. 

Naples. 

1915. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

Dec.     4 

80.0 

75.0 

75.0 

75.0 

100.0 

100.0 

100.0 

100.0 

100.0 

100.0 

11 

80.0 

75.0 

75.0 

75.0 

100.0 

100.0 

110.0 

120.0 

110.0 

110.0 

18 

80.0 

80.0 

7.5.0 

75.0 

100.0 

100.0 

110.0 

120.0 

110.0 

110.0 

24 

90.0 

80.0 

75.0 

75.0 

110.  C 

100.0 

110.0 

120.0 

110.0 

110.0 

31 

90.0 

85.0 

80.0 

80.0 

110.0 

100.0 

120.0 

120.0 

120.0 

120.0 

1916. 

Jan.      8 

90.0 

85.0 

81.0 

80.0 

110.0 

100.0 

120.0 

120.0 

120.0 

120.0 

15 

90.0 

85.0 

81.0 

80.0 

110.0 

100.0 

125.0 

125. 0 

125.0 

125.0 

22 

90.0 

90.0 

85.0 

90.0 

115.0 

110.0 

13.5.0 

l.'iS.  0 

135.0 

13.5.0 

29 

90.0 

90.0 

90.0 

90.0 

115.0 

110.0 

135.0 

135.0 

150.0 

1.50.0 

Feb.    5 

90.0 

90.0 

90.0 

100.0 

115.0 

110.0 

13.5.0 

13.5.0 

150.0 

1.50.0 

11 

90.0 

90.0 

90.0 

100.0 

115.0 

110.0 

135.0 

135.0 

150.0 

1.50.0 

19 

100.0 

90.0 

90.0 

100.0 

125.0 

140.0 

150. 0 

150.0 

200.0 

200.0 

26 

100.0 

90.0 

95.0 

100.0 

125.0 

140.0 

I.tO.O 

1.50. 0 

175.0 

175.0 

Mar.    4 

100.0 

100.0 

95.0 

100.0 

125.0 

140.0 

150.0 

150.0 

175.0 

175.0 

11 

100.0 

100.0 

100.0 

100.0 

140.0 

140.0 

150.0 

150.0 

175.0 

175.0 

PROVISIONS,  PER  100  POUNDS. 


1914. 

Jan.     3 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

10 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

17 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

24 

24.4 

21.7 

24.4 

21.7 

33.9 

28. 0 

30.0 

32.6 

32.6 

32.6 

31 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

Feb.     7 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

14 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

21 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

28 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

Mar.    7 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

14 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

21 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

28 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

Apr.     4 

21.4 

2L7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

U 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

18 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

25 

24.4 

21.7 

24.4 

21.7 

3.3.9 

28.0 

30.0 

32.6 

32.6 

32.6 

May     2 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

9 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

16 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

23 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

29 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

June    6 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

13 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

20 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

27 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

July     3 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

11 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

18 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

25 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

Aug.     1 

18 

115 

24.4 

21.7 

24.4 

21.7 

33.9 

28.0 

30.0 

32.6 

32.6 

32.6 

122 

129 

Sept.    5 

24."4' 

2i.'7' 

■■■■-■- 

'""2i.'7' 

'"""33.'9' 

""'28.'6' 

""zb'.o 

'"'si'e' 

'32.'6' 

32."6 

12 

32.6 
32.6 

32.6 
32.6 

35.3 
35.3 

32.6 
32.6 

50.2 
50.2 

38.0 
38.0 

40.0 
40.0 

43.5 
43.5 

43.5 

19 

'""38."6' 

43.5 

26 

32.6 

32.6 

35.3 

32.6 

50.2 

38.0 

40.0 

38.0 

43.5 

43.5 

Oct.      3 

32.6 

32.6 

35.3 

32.6 

50.2 

38.0 

40.0 

38.0 

43.5 

43.5 

10 

32.6 

32.6 

35.3 

32.6 

50.2 

38.0 

40.0 

38.0 

43.5 

43.5 

17 

32.6 

32.6 

35.3 

32.6 

50.2 

38.0 

40.0 

38.0 

43.5 

43.6 

24 

32.6 

32.6 

35.3 

32.6 

50.2 

■38.0 

40.0 

38.0 

43.5 

43.5 

31 

32.6 

32.6 

35.3 

32.6 

50.2 

38.0 

40.0 

38.0 

43.5 

43^ 

Nov.    7 

32.6 

32.6 

35.3 

32.6 

50.2 

38.0 

40.0 

38.0 

43.5 

43.5 

14 

32.6 

32.6 

35.3 

32.6 

50.2 

38.0 

40.0 

38.0 

43.5 

43.5 

21 

32.6 

32.6 

35.3 

32.6 

50.2 

38.0 

40.0 

43.5 

54.3 

54.3 

28 

32.6 

32.6 

35.3 

32.6 

50.2 

38.0 

40.0 

43.5 

54.3 

54.3 

Dec.    5 

32.6 

32.6 

35.3 

32.6 

50.2 

38.0 

40.0 

43.5 

54.3 

54.3 

12 

32.6 

32.6 

38.0 

32.6 

50.2 

38.0 

50.0 

65.2 

65.2 

65.2 

19 

32.6 

32.6 

38.0 

32.6 

50.2 

38.0 

60.0 

65.2 

65.2 

65.2 

24 

38.0 

38.0 

40.7 

38.0 

108.6 

50.0 

50.0 

70.6 

86.9 

86.9 

•  Owing  to  conditions  abroad,  no  rates  aie  quoted  on  freight  of  any  kind  to  any  European  ports. 
32910—16 50 


782       SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE, 


Ocean  freight  rates  from  New  Yorh  to  European  ports — Continued. 
PROVISIONS,  PET!  100  POUNDS— Continued. 


British  ports. 

Danish 
port. 

Dutch 
port, 

French  ports. 

Italian  ports. 

Date. 

London. 

Liver- 
pool. 

Glas- 
gow. 

Hull. 

Copen- 
hagen. 

Rotter- 
dam. 

Havre. 

Mar- 
seille. 

Genoa. 

Naples. 

1915. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

Jan.     2 

38.0 

38.0 

40.7 

38.0 

108.6 

60.0 

60.0 

70.6 

108.6 

108.6 

9 

38.0 

38.0 

40.7 

38.0 

108.6 

60.0 

60.0 

70.6 

108.6 

108. 6 

16 

.38.0 

38.0 

40.7 

.38.0 

10S.6 

60.0 

60.0 

70.6 

108.6 

108.6 

23 

38.0 

38.0 

43.5 

43.5 

162. 9 

7.5.0 

85.0 

70.6 

108.6 

108.6 

30 

38.0 

38.0 

43.5 

43.5 

162.9 

75.0 

8.5.0 

81.5 

108.6 

108. 6 

Fell.    6 

48.9 

48.9 

48.9 

43. 5 

162.9 

125.0 

85.0 

81.5 

.08.6 

108.6 

13 

48.9 

48.9 

48.9 

43.5 

162.9 

125. 0 

125.0 

81.5 

108.6 

108.6 

20 

48.9 

54.3 

48.9 

43.5 

162.9 

125.0 

125.0 

81.5 

108.6 

108.  e 

27 

65.2 

65. 2 

48.9 

43.5 

162.9 

12.5.0 

125.0 

81.5 

108.6 

108.6 

Mar.     6 

65.2 

65.2 

48.9 

43.5 

162.9 

125.0 

125.0 

81.5 

108.6 

108.6 

13 

65.2 

65.2 

65.2 

54.3 

162.9 

150.0 

125.0 

81.5 

108.6 

108.6 

20 

65.2 

65.2 

65.2 

65.2 

195.5 

175.0 

125.0 

86.9 

108.6 

108.6 

27 

65.2 

65.2 

65.2 

65.2 

195.5 

175.0 

125.0 

108.6 

108.6 

108.6 

Apr.     3 

65.2 

65.2 

65.2 

65.2 

195.5 

175.0 

12.5.0 

108.6 

108.6 

108.6 

10 

65.2 

65.2 

65.2 

65.2 

195.5 

175.0 

125.0 

lOS.  6 

108.6 

108.6 

17 

65.2 

65.2 

65.2 

65.2 

195.5 

175.0 

125.0 

108. 6 

108.6 

108.6 

24 

65.2 

65.2 

65.2 

65.2 

195.5 

175.0 

125.0 

108.6 

108.6 

108. 6 

May     1 

65.2 

65.2 

65.2 

65.2 

195.5 

175.0 

125.0 

108.6 

108.6 

108.6 

8 

65.2 

65.2 

65.2 

6.5.2 

195.5 

175.0 

12.5.0 

108.6 

10.S.6 

108.6 

15 

65.2 

65.2 

65.2 

65.2 

195.5 

175.0 

125.0 

108.6 

108.6 

108.6 

22 

65.2 

65.2 

65.2 

65.2 

13.5.8 

100.0 

125.0 

198.6 

108.6 

108.6 

29 

65.2 

65.2 

65.2 

65.2 

135.8 

100.0 

125.0 

108.6 

10.S.6 

108.6 

June    5 

65.2 

65.2 

65.2 

65.2 

1.3.5.8 

100.0 

"125.0 

108.6 

108.6 

108.6 

12 

65.2 

65.2 

6.5.2 

65.2 

135.8 

100.0 

125.0 

108.6 

108.6 

lOS.  6 

19 

65.2 

65.2 

65.2 

6.5.2 

135.8 

100.0 

125.0 

108.6 

108.6 

108.6 

26 

65.2 

65.2 

65.2 

65.2 

135. 8 

100.0 

125.0 

108.6 

108.6 

108. 6 

July     2 

65.2 

65.2 

65.2 

65.2 

13.5.8 

100.0 

125.0 

108.6 

108.6 

108.6 

10 

65.2 

65.2 

65.2 

65.2 

135.8 

100.0 

125.0 

108.6 

108. 6 

108.6 

17 

65.2 

65.2 

65.2 

65.2 

135.8 

100.0 

125.0 

108.6 

108.6 

108.6 

24 

65.2 

65.2 

65.2 

65.2 

135.8 

100.0 

125.0 

108.6 

108.6 

108.6 

31 

65.2 

65.2 

65.2 

65.2 

135.8 

80.0 

125.0 

108.6 

108.6 

108.6 

Aug.    7 

65.2 

65.2 

65.2 

65.2 

124.9 

80.0 

125.0 

108.6 

108.6 

108.6 

14 

65.2 

65.2 

65.2 

6,5.2 

124.9 

90.0 

125.0 

108.6 

108.6 

108.6 

21 

65.2 

65.2 

65.2 

65.2 

124.9 

90.0 

125.0 

108.6 

108.6 

108.6 

28 

65.2 

65.2 

65.2 

6.5.2 

124.9 

90.0 

125.0 

108.6 

108.6 

lOS.  6 

Sept.   4 

05.2 

65.2 

6.5.2 

65.2 

1.50.0 

110.0 

125.0 

89.3 

108.6 

108.6 

11 

68.0 

68.0 

68.0 

68.0 

158.0 

125.0 

125.0 

89.3 

108.6 

108.6 

18 

68.0 

68.0 

68.0 

68.0 

158.0 

125.0 

125.0 

89.3 

108.6 

108.6 

25 

80.0 

SO.O 

80.0 

80.0 

150.0 

125.0 

125.0 

89.3 

112.5 

112.5 

Oct.     2 

80.0 

80.0 

80.0 

80.0 

150.0 

125.0 

125.0 

89.3 

112.5 

112.5 

9 

90.0 

100.0 

80.0 

80.0 

150.0 

125.0 

125.0 

89.3 

112.5 

112.5 

16 

90.0 

90.0 

80.0 

80.0 

17.5.0 

125.0 

126.0 

111.6 

112.5 

112.5 

23 

90.0 

90.0 

90.0 

80.0 

175.0 

125.0 

125.0 

111.6 

112.5 

112.5 

30 

90.0 

90.0 

90.0 

SO.C 

175.0 

125.0 

125.0 

111.6 

112.5 

112.5 

Noy.    5 

90.0 

90.0 

90.0 

80  0 

175.0 

125.0 

125.0 

111.6 

112.5 

112.5 

13 

90.0 

90.0 

90.0 

90.0 

190.0 

125.0 

125.0 

133. 9 

112.5 

112.5 

20 

90.0 

90.0 

90.0 

90.0 

190.0 

150.0 

125.0 

133. 9 

112.5 

112.5 

27 

90.0 

90.0 

90.0 

90.0 

190.0 

150.0 

125.0 

133.9 

112.5 

112.5 

Dec.     4 

90.0 

90.0 

90.0 

90.0 

190.0 

150.0 

12.5.0 

133.9 

112.5 

112.5 

11 

90.0 

90.0 

90.0 

90.0 

190.0 

150.0 

125.0 

13.3.9 

112.5 

112.5 

18 

90.0 

90.0 

90.0 

90.0 

190.0 

150.0 

125.0 

133.9 

112.5 

112.5 

24 

90.0 

90.0 

90.0 

90.0 

190.0 

150.0 

125.0 

133.9 

112.5 

112.5 

31 

100.0 

100.0 

100.0 

90.0 

200.0 

175.0 

125.0 

1.56.3 

125.0 

125.0 

1916. 
Jan.      8 

125.0 

12.5.0 

125.0 

125.0 

225.0 

175.0 

200.0 

200.0 

150.0 

1.50.0 

15 

125.0 

125.0 

125.0 

125. 0 

225.0 

175.0 

200.0 

200.0 

150.0 

150.0 

22 

125.0 

125.0 

125.0 

125.0 

225.0 

175.0 

200.0 

200.0 

150.0 

150.0 

29 

125.0 

125.0 

12.5.0 

125. 0 

225.0 

175.0 

200.0 

200.0 

150.0 

150.0 

Feb.     5 

125.0 

125.0 

125.0 

125.0 

22,5.0 

175.0 

200.0 

200.0 

150.0 

150.0 

11 

125.0 

125.0 

125.0 

125.0 

225. 0 

175. 0 

200.0 

250.0 

175.0 

175.0 

19 

125.0 

125.0 

125.0 

125.0 

225.0 

175.0 

200.0 

250.0 

17.5.0 

175.0 

26 

125.0 

125.0 

125.0 

125. 0 

22.'^.  0 

175.0 

200.0 

250.0 

17.5.0 

175.0 

Mar.    4 

125.0 

125.0 

125.0 

125.0 

225.0 

175.0 

200.0 

250.0 

175.0 

175.0 

11 

125.0 

125.0 

125.0 

125.0 

225.0 

175.0 

200.0 

250.0 

175.0 

175.0 

SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      783 

Ocean  freight  rates  from  New  Yoric  to  European  ports — Continued. 
COTTON,  COMPRESSED,    PER   100  POUNDS. 


Date. 


British 
port, 
Liver- 
pool. 


Danish 
port, 
Copen- 
hagen. 


Dutch 
port, 
Rotter- 
dam. 


French 
port, 
Havre. 


Italian  ports. 


Genoa.      Naples. 


Jan.  3 

Jan.  10... 
Jan.  17... 
Jan.  24... 
Jan.  31... 
Feb.  7... 
Feb.  14.. 
Feb.  21.- 
Feb.  28. . 
Mar.  7. . . 
Mar.  14. . 
Mar.  21. . 
Mar.  28.. 
Apr.  4. . . 
Apr.  U.. 
Apr.  18. . 
Apr.  25.. 
May  2.... 

May  9 

May  16... 
May  23... 
May  29... 
June  6 . . . 
June  13. . 
June  20. . 
June  27 . . 
Julys.... 
July  11... 
July  18... 
Aug.  1 . . . 
Aug.  8'.. 
Aug.  15  1. 
Aug.  22  > . 
Aug.  29>. 
Sept.  5... 
Sept.  12.. 
Sept.  19.. 
Sept.  26.. 
Oct.  3.... 
Oct.  10... 
Oct.  17... 
Oct.  24... 
Oct.  31... 
Nov.  7... 
Nov.  14.. 
Nov.  21 . . 
Nov.  28.. 
Dec.  5.... 
Dec.  12... 
Dec.  19... 
Dec.  24... 


1914. 


Cents 
28. 
28. 
28. 
25 
25. 
25. 
25. 
25. 
25. 
25. 
20. 
20. 
20. 
20. 
20. 
20. 
20. 
20. 
20. 
20. 
20. 
20. 
20. 
20. 
20. 
20. 
20. 
20. 
20. 
20. 


Cents. 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.^0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 


Cents. 
35.0 
35.0 
35.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 


Cents. 
30.0 
30.0 
30..0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
21.0 
21.0 
21.0 
21.0 
21.0 
21.0 
21.0 
21.0 
21.0 
21.0 
21.0 


Cents. 
40.0 
40.0 
40.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
22.5 
22.5 
22.5 
22.5 
22.5 
22.5 
22.5 
22.5 
22.5 
22.5 
22.5 


Cents. 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
40.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 
30.0 


Jan.  2... 
Jan.O... 
Jan.  16.. 
Jan.  23.. 
Jan.?0.. 
Feb.  6.. 
Feb.  13. 
Feb.  :0. 
Feb.  27. 
Mar.  6.. 
Mar.  13. 
Mar.  20. 
Mar.  27. 
Apr.  3.. 
Apr.  10. 
Apr.  17. 
Apr.  24. 
May  1... 
Mays... 


1915. 


40.0 


25.0 


75.0 
75.0 
100.0 
100.0 
100.0 
100.0 
100.0 
125.0 
125.0 
125.0 
125.0 
125.0 
200.0 
200.0 
200.0 
200.0 
200.0 
200.0 
200.0 


100.0 
100.0 
120.0 
120.0 
120.0 
120.0 


120.0 
200.0 
200.0 
2.=i0. 0 
250.0 
250.0 
250.0 
225.0 
225.0 
225. 0 
225.0 
225. 0 
225.0 
225.0 
225.0 
225.0 
225. 0 
225.0 
225.0 


21.0 
45.0 
45.0 
45.0 
45.0 
45.0 
45.0 
45.0 
45.0 
60.0 
60.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 


100.0 
100.0 
200.0 
200.0 
200. 0 
200.0 
200.0 
200.0 
200.0 
200.0 
200.0 
200.0 
300.0 
300.0 
300. 0 
300.0 
300.0 
300.0 
300. 0 


22.5 
75.0 
75.0 
75.0 
75.0 
75.0 
75.0 
75.0 
75.0 
80.0 
80.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 


100.0 
100.0 
125.0 
125. 0 
125.0 
125.0 
125.0 
125.0 
125.0 
125. 0 
125.0 
125.0 
1.50. 0 
1.50. 0 
150.0 
150.0 
150.0 
150.0 
150.0 


30.0 
65.0 
65.0 
65.0 
65.0 
65.0 
65.0 
65.0 
65.0 
80.0 
80.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 


100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 

100.0 

100.0 
100.0 


»  Owing  to  conditions  abroad,  no  rates  are  quoted  on  freight  of  any  kind  to  any  European  ports. 


784      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


Ocean  freight  rates  from  New  York  to  European  -ports — Continued. 
COTTON,  COMPRESSED,   PER   100  POUNDS— Continued. 


Date. 


1915. 

May  15 

May22 

May29 , 

JuiieS 

June  12 

June  19 

June  26 

July  2 

July  10 

July  17 

Jul  V  24 

July  .31 

Aug.7 

Aug.  14 

Aug.  21 

Auc.  2S 

Sept. 4 

Sept. 11 

Sept.  18 

Sept. 25 

Oct.  2 

0(;t.  9 

Oct.  16 

Oct.  2.1 

Oct.  30 

Nov.  5 

Nov.  12 

Nov.  20 

Nov.27 

Dec.4 

Dec.  11 

Dec.  18 

Dec.  24 

Dec.  31 

1916. 

Jan.8 

Jan. 15 

Jan.  22 

Jan.  29 

feb.5 

Feb.  11 

Feb.  19 

Feb.  26 

Mar.  4 

Mar.  11 


British 
port, 
Liver- 
pool. 


Cents. 
200.0 
12.x  0 
125.0 
125. 0 
125.0 
100.0 
100. 0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
125.0 
125.0 
125. 0 
125.0 
125. 0 
125.0 
125.0 
125.0 
125. 0 
125.0 
125.0 
125.0 
125.0 
150.0 
150.0 
150.0 
200.0 
225.0 


225.0 
250.0 
250.0 
250.0 
250.0 
250.0 
250.0 
250  0 
275  0 
275.0 


Cents. 
250.0 
209.0 
200.0 
200.0 
200.0 
200.0 
200.0 
200.0 
200.0 
200. 0 
200.0 
200.0 
200.0 
200.0 
200.0 
200.0 
200.0 
200.0 
209.0 
200.0 
200.0 
200.0 
200.0 
200.0 
200.0 
200.0 
200.0 
225.0 
225.0 
225.0 
225.0 
225. 0 
225.0 
275.0 


275.0 
27.5.0 
275.0 
275.0 
275. 0 
275. 0 
275.0 
275.0 
300.0 
300.0 


Dutch 
port, 
Rotter- 
dam. 


French 

port, 

Havre. 


Italian  ports. 


Genoa. 


Cents. 
225.0 
200.0 
209.0 
200.0 
200.0 
200.0 
200.0 
130.0 
130. 0 
130.0 
130. 0 
130.0 
130.0 
130.0 
150.0 
150.0 
160.0 
160.0 
ICO.O 
160.0 
160.0 
160.0 
160. 0 
16C.  0 
160.0 
160.0 
160.0 
225.0 
225.0 
225.0 
225. 0 
225.0 
225.0 
250.0 


2.50.0 
250.0 
250.0 
2.V).0 
250.0 
250.0 
250.0 
250.0 
300.0 
300.0 


Cents. 
300.0 
150.0 
150.0 
150.0 
150.0 
150.0 
1.50. 0 
125.0 
125.0 
125.0 
125.0 
125.0 
150.0 
150.0 
1,50.0 
150.0 
150. 0 
150.0 
1.50.0 
150.0 
150.0 
150.0 
150. 0 
150.0 
1.50.0 
1.50.0 
150.0 
150.0 
150.0 
150.0 
150.0 
15(J.O 
150.0 
150.0 


150.0 
300.0 
300.0 
300.0 
300.0 
300.0 
300.0 
300.0 
300.0 
300.0 


Naples. 


Cents. 
150.0 
125. 0 
125. 0 
125.0 
125.0 
125. 0 
125.0 
100.0 
100.0 
100.0 
100.0 
100.0 
125. 0 
125.0 
135.0 
135. 0 
1.V5. 0 
135.0 
135.0 
13.5.0 
135.0  I 
135.0  ! 
135.0  ! 
135.0  ! 
Ub  0  \ 
135.0  I 
135.0  i 
135.0  . 
135.0 
135.0  I 
135.0  I 
135.0  : 
135.0 
135.0  I 


135.0 
135.0 
135.  C 
135.0 
135. 0 
135.0 
1.35.0 
13.5.0 
135.0 
135.0 


Cents. 
100.0 
225.0 
225.0 
22.5.0 
225.0 
125.0 
125.0 
160.0 
100  0 
160.0 
160.0 
160.0 
160.0 
160.0 
160.0 
160  0 
160.0 
160.0 
160.0 
160.0 
160.0 
160.0 
160.0 
160.0 
160  0 
160.0 
160.0 
160.0 
160.0 
160.0 
160  0 
160.0 
160. 0 
160.0 


160.0 
160.0 
160.0 
160.0 
160.0 
160.  U 
160  0 
160.0 
160  0 
160.0 


MEASUREMENT  GOODS,  PER  TON  OR  40  CUBIC  FEET. 


British  ports. 

Danish 

port, 

Cfopen- 

hagen. 

Dutch 
port, 
Rotter- 
dam. 

French  ports. 

Italian  ports. 

Date. 

London. 

Liver- 
pool. 

Glas- 
gow. 

Hull. 

Havre. 

Mar- 
s««iUe. 

Genoa. 

Naples. 

1914. 

Dollars. 

Dollar-1. 

Dollars. 

Dollars. 

Dollars. 

DoUar.i. 

Dollars. 

Dollars. 

Dollars. 

Dollars. 

Jan.     3 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

10 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

17 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

24 

4.25 

4.25 

-    4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

31 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

Feb.    7 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

14 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

21 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

28 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

Mar.    7 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

14 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

21 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00  1 

5.00 

4.86  1 

6.08 

6.08 

28 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86  j 

6.08 

6.08 

Apr.  11 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86  1 

6.08 

«.08 

18 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

25 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

«.0i 

SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      785 


Ocean  freight  rates  from  New  York  to  European  ports — Continued. 
MEASUREMENT  GOODS,  PER  TON  OR  40  CUBIC  FEET— Continued. 


British  ports. 

Danish 
port, 

Dutch 
port, 

French  ports. 

Italian  ports. 

Date. 

London. 

Liver- 
pool. 

Glas- 
gow. 

Hull. 

Copen- 
hagen. 

Rotter- 
dam. 

Ha\Te. 

Mar- 
seille. 

Genoa. 

Naples. 

1914. 

Dollars. 

Dollars. 

Dollars. 

Dollar.'^. 

Dollars. 

Dollars. 

Dollars. 

Dollars. 

Dollars. 

Dollars. 

May     2 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

9 

4.25 

4.25 

1.25 

3.  65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

16 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

23 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.S6 

6.08 

e.08 

29 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

June    6 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

13 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.S6 

6.0s 

6. 08 

20 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

27 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

July     3 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.S6 

6.08 

6.08 

11 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

18 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

Aug.    1 

18 
115 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

122 

129 

Sept.    5 

4.' 25' 

4.25' 

""■■4."25' 

""".3."  65' 

""h'.'v 

'"'4.' 66' 

'""5."  66' 

'"'4.' 86' 

""6.'68' 

6.' 68 

12 

4.25 

4.25 

4.25 

3.65 

5.17 

4.00 

5.00 

4.86 

6.08 

6.08 

19 

4.86 

4.86 

6.08 

4.86 

11.25 

6.00 

6.00 

8.51 

9.73 

9.73 

26 

4.  86 

4.86 

6.08 

4.86 

11.25 

6.00 

6.00 

8.51 

9.73 

9.73 

Oct.     3 

4.86 

4.86 

6.08 

4.86 

11.25 

6.00 

6.00 

8.51 

9.73 

9.73 

10 

4.86 

4.86 

6.08 

4.86 

U.25 

6.00 

6.00 

8.51 

9.73 

9.73 

17 

4. 86 

4.86 

6.08 

4.86 

11.25 

6.00 

6.00 

8.51 

9.73 

9.73 

24 

4.86 

4.86 

6.08 

4.86 

11.25 

6.00 

6.00 

8.51 

9.73 

9.73 

31 

4.86 

4.86 

e.08 

4.86 

11.25 

6.00 

6.00 

8.51 

9.73 

9.73 

Nov.    7 

4.86 

4.86 

6.08 

4.86 

11.25 

6.00 

6.00 

8.51 

9.73 

9.73 

14 

4.86 

4.86 

6.08 

4.86 

11.25 

6.00 

6.00 

8.51 

9.73 

9.73 

21 

4.86 

4.86 

e.08 

4.86 

11.25 

6.00 

10.00 

8.51 

9.73 

9.73 

28 

4.86 

4.86 

6.08 

4.86 

11.25 

6.00 

10.00 

8.51 

9.73 

9.73 

Dec.    5 

4.86 

4.86 

6.08 

4.86 

11.25 

6.00 

10.00 

8.51 

9.73 

9.73 

12 

7.30 

7.30 

8.51 

6.08 

14.60 

6.00 

10.00 

12.17 

12.17 

12.17 

19 

7.30 

7.30 

8.51 

6.08 

14.60 

6.00 

10.00 

12.17 

12.17 

12.17 

24 

7.30 

7.30 

8.51 

6.08 

14.60 

8.00 

12.00 

12.17 

17.03 

17.03 

1915. 

Jan.     2 

7.30 

7.30 

8.57 

6.08 

14.60 

8.00 

12.00 

12.17 

24.33 

24.  .33 

9 

7.30 

7.30 

8.51 

6.08 

14.60 

8.00 

12.00 

12.17 

24.33 

24.33 

16 

7.30 

7.30 

8.51 

6.08 

17.03 

8.00 

12.00 

12.17 

24.33 

24.33 

23 

9.73 

9.73 

8.51 

6.08 

17.03 

12.00 

20.00 

1.5.  81 

2-i.33 

24.33 

30 

9.73 

9.73 

8.51 

6.08 

17.03 

12.00 

20.00 

18.24 

24.33 

24.33 

Feb.     6 

9.73 

9.73 

8.51 

6.08 

17.03 

12.00 

20.00 

18.24 

24.  .33 

24.33 

13 

9.73 

9.73 

8.51 

6.08 

17.03 

12.00 

20.00 

18.24 

24.33 

24.33 

20 

9.73 

9.73 

8.51 

6.08 

17.03 

12.00 

20.00 

1.8.24 

24.33 

24.  .33 

27 

9.73 

9.73 

8.51 

6.08 

17.03 

12.00 

20.00 

18.24 

24. 33 

24.33 

Mar.    6 

9.73 

9.73 

8.51 

6.08 

17.03 

12.00 

20.00 

18.24 

24.33 

24.33 

13 

9.73 

9.73 

9.73 

6.08 

19.47 

12.00 

20.00 

1.8. 24 

24.33 

24.33 

20 

24.33 

24.33 

9.73 

9.73 

19.47 

12.00 

25.00 

19.47 

24. 33 

24.33 

27 

24.33 

24.33 

9.73 

9.73 

19.47 

12.00 

2.V00 

19.47 

24.33 

24.33 

Apr.    3 
10 

24.33 

24. 33 

9.73 

9.73 

19.47 

12.00 

25.00 

19.47 

24.  .33 

24.33 

24.33 

24.33 

9.73 

9.73 

19.47 

12.00 

25.00 

19.47 

24.33 

24.33 

17 

24.33 

24.33 

9.73 

9.73 

19.47 

12.00 

25.00 

19.47 

24.33 

24.33 

24 

24.33 

24.33 

9.73 

9.73 

19.47 

12.00 

25.00 

19.47 

24.33 

24.33 

May     1 

g 

24.33 

24. 33 

9.73 

9.73 

19.47 

12.00 

25.00 

19.47 

24.33 

24.33 

24.33 

24. 33 

9.73 

9.73 

19.47 

12.00 

25.00 

19.47 

19.47 

24.33 

16 

24. 33 

24.33 

9.73 

9.73 

19,47 

12.00 

25.00 

19.47 

19.47 

19.47 

22 

14.60 

24. 33 

12.17 

19.47 

16.00 

20.00 

.  18.24 

19.47 

19.47 

29 

14.  (iO 
14.60 
14.60 
14.  (iO 
14.60 

14.60 
14.60 
14.60 
14.60 
14.60 

12.17 
12.17 
12.17 
12.17 
12.17 

19.47 
19.47 
19.47 
19.47 
10.47 

16.00 
16.00 
16.00 
16.00 
16.00 

20.00 
20.00 
20.00 
20.00 
20.00 

18.24 
18.24 
18.24 
18.24 
18.24 

19.47 
19.47 
19.47 
19.47 
19.47 

19.47 

June    5 
12 

19.47 

19.47 

19 

19.47 

26 

19.47 

July     2 
10 

14.60 
14.60 
14.60 
14.60 
14.60 
14.60 
14.60 

14.60 
14.60 
14.60 
14.  60 
14.60 
14.60 
14.60 

12.17 
12.17 
12.17 
12.17 
12.17 
12.17 
12.17 

19.47 
19.47 
19.47 
19.47 
19.47 
19.47 
19.  47 

16.00 
16.00 
16.00 
16.00 
16.00 
16.00 
16.00 

20.00 
20.00 
20.00 
20.00 
20.00 
20.00 
20.00 

18.24 
18.24 
18.24 
18.24 
18.24 
18.24 
IS.  24 

19.47 
19.47 
19.47 
19.47 
19.47 
19.47 
19.47 

19.47 

19.47 

17 

19.47 

24 

19.47 

31 

19.47 

Aug.     7 
14 

19.47 

19.47 

21 

14.60 
14.60 
14.60 
14.60 
14.fiO 
1        12. 80 

14.60 
14.60 
14.fi0 
14.60 
14.60 
12.80 

12.17 
12.17 

12. 17 
12.17 
12.17 
12.80 

19.47 

19.47 

19.47 

[      19. 47 

19.  47 

20.  00 

16.00 
16.00 
16.00 
16.00 
16.00 
18.00 

20.00 
20.00 
20.  00 
20,00 
20.00 
20.00 

18. 24 
18.24 
18.  24 
18.24 
18.24 
20.00 

19.47 
19.47 
19.47 
19.47 
20.00 
20.00 

19.47 

28 

19.47 

Sept.   4 
11 

19.47 

19.47 

18 

19.47 

25 

20.00 

I  Owing  to  conditions  abroad,  no  rates  are  quoted  on  freight  of  any  kind  to  any  European  port. 


786       SHIPPING  BOARD,   XAVAL  AUXiLlAKV,  AND  MERCHANT  MARINE. 


Ocean  freight  rates  from  New  York  to  European  ports — Continued. 
MEASUREMENT  GOODS,  PER  TON  OR  40  CUBIC  FEET— Continued. 


British  ports. 

Danish 
port, 
Copen- 
hagen. 

Dutch 
port, 

Rotter- 
dam. 

French  ports. 

Italian  ports. 

Date. 

London. 

Liver- 
pool. 

Glas- 
gow. 

Dollars. 

Hull. 

Havre. 

Mar- 
seille. 

Genoa. 

Naples. 

1916. 
Oct      2 

Dollars. 
12.80 
15.20 
15.20 
15.20 
15.20 
15.20 
15.20 
15.20 
15.20 
15.20 
15.20 
15.20 
15.20 
25.20 

25.20 
25.20 
25.20 
25.20 
25.20 
25.20 
25.20 
25.20 
25.20 
25.20 

Dollars. 
12.80 
15.20 
15.20 
18.80 
18.80 
18.80 
18.80 
18.80 
18.80 
18.80 
18.80 
18.80 
18.80 
25.20 

25.20 
25.20 
25.20 
«5.20 
25.20 
25. 20 
25.20 
25.20 
25.20 
25.20 

Dollars. 
12.80 
15.20 
15.20 
15.20 
15.20 
15.20 
15.20 
15.20 
15.20 
15.20 
15.20 

'    15.20 
15.20 
18.80 

18.80 
18.80 
18.80 
18.80 
18.80 
18.80 
18.80 
18.80 
18.80 
18.80 

Dollars. 
20.00 
20.00 
20.00 
20.00 
20.00 
20.00 
20.00 
20.  00 
20.00 
20.00 
20.00 
20.00 
20.00 
20.00 

20.00 
20.00 
20.00 
20.00 
20.00 
25.20 
25.20 
25.20 
30.00 
30.00 

Dollars. 
18.00 
18.00 
18.00 
18.00 
18.00 
18.00 
18.00 
18.  00 
18.00 
18.00 
18.00 
18.00 
18. 00 
18.00 

18.00 
18.00 
18.00 
18.00 
18.00 
20.00 
20.00 
20.00 
20.00 
20.00 

Dollars. 
20.00 
20.00 
25.00 
25.00 
25.00 
25.00 
25.00 
25.00 
25.00 
25. 00 
25.00 
25.00 
25.00 
25.00 

25.00 
25.  00 
25.00 
25.00 
25.00 
25.00 
25.00 
25.00 
35.  00 
35.00 

Dollars. 
20.00 
20.00 
25.00 
25.00 
25.00 
25.00 
25.00 
25.00 
25.00 
25.00 
25.00 
25.00 
25.00 
35.00 

35.00 
35.00 
35.00 
40.00 
40.00 
50.00 
50.00 
50.00 
50.00 
50.00 

Dollars. 
20.00 
20.00 
20.00 
20.00 
20.00 
20.00 
20.00 
20.00 
20.00 
20.00 
20.00 
20.00 
20.00 
20.00 

20.00 
20.00 
20.00 
20.00 
20.00 
30.00 
30.00 
30.00 
30.00 
30.00 

Dollars. 
20.00 

9 

20.00 

16 

20.00 

23 

20.00 

30 

20.00 

Nov     5 

20.00 

13 

20.00 

20 

20.00 

27 

20.00 

Dec.     4 

20.00 

11 

20.00 

18 

20.00 

24 

20.00 

31 

20.00 

1916 
Jan      8 

20.00 

15 

20.00 

22 

20.00 

29 

20.00 

Feb.     5 

20.00 

11 
19 

30.  oe 
30.00 

26 

30.00 

Mar.    4 

30.00 

11 

30.00 

CHARTER    RATES. 


An  excellent  account  of  the  course  of  charter  rates  from  American  to  European 

?ort3  during  the  past  two  years  is  contained  in  the  following  extract  from  the  New 
ork  Journal  of  Commerce  of  March  4,1916: 


Charter  Rates  Still  Advancing- 


-FuLL  Cargo  Quotations  Have  Made  High 
Records. 


8RAIN  FIXTURES  ON  PRINCIPAL  ROUTES  HAVE  INCREASED  FROM  EIGHT  TO  TWELVE 
TIMES  OVER  THE  NORMAL — OTHER  MARKETS  HAVE  HAD  SIMILAR  EXPERIENCE — LAW 
OF  SUPPLY  AND  DEMAND  WORKING  RIGIDLY — ^NEUTRAL  OWNERS  ENJOYING  FULL 
ADVANTAGE    WITH  THEIR   AVAILABLE    "  FREE  "  TONNAGE. 

Steamer  chartering  activities  in  the  American  markets  being  restricted  solely 
because  of  the  acute  scarcity  of  ocean  tonnage,  sail  tonnage  likewise  limited,  rates 
strong  and  continuing  on  an  upward  basis  with  freight  offering  freely,  exporters  have 
been  keenly  interested  in  the  progress  of  charter  rates  during  the  past  18  months. 

An  investigation  into  the  course  of  the  rates  prevailing  in  the  local  steamer  char- 
tering market  for  the  past  year  and  a  half,  taking  re])resentative  grain  charters  between 
the  principal  ports  of  traffic  as  the  index  shows  that  charter  rates  on  steamers  are  now 
at  levels  ranging  all  the  way  from  eight  to  twelve  times  what  they  were  in  June,  1914, 
two  months  before  the  war  broke  out. 


RATES   DEPENDING   ON    WHAT   IS   ASKED. 

Quotations  on  grain  fixtures  for  the  past  six  months  or  more  have  been  so  change- 
able, new  rates  being  stated  on  practicallj'-  each  steamer  that  has  been  fixed,  as  to 
make  it  practically  impossible  to  say  just  what  the  current  market  rate  is.  Charters, 
have  been  fixed  recently  at  rates  which  depended  mainly  on  what  the  agents  or 
owners  asked  for  their  individual  steamers. 

Few  "free"  steamers  have  been  available  for  grain  cargoes  out  of  this  and  other 
North  Atlantic  ports  in  recent  months.  It  is  estimated  that  approximately  80  per 
cent  of  the  tonnage  engaged  in  grain-carrying  trips  out  of  North  Atlantic  ports  are 
working  under  requisition  orders  of  the  British,  French,  or  other  European  Govern- 
ments. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.     787 

_  Portland  (Me.)  and  Boston  during  the  past  three  months  have  seldom  had  less  than 
six  or  eight  requisitioned  steamers  loading  grain  at  docks  within  their  harbors.  Most 
of  these  vessels  have  been  taking  out  the  Canadian  grain  which  was  requisitioned 
some  time  ago,  the  Montreal  season  having  closed,  shipments  being  forwarded  from 
Canada  by  rail  to  the  American  ports. 

RATES  QUADRUPLED  IN  TEN  MONTHS  OF  WAR. 

Two  months  before  the  war  in  Europe  began  (June,  1914),  steamers  were  being  fixed 
in  the  local  market  for  full  cargoes  of  grain  between  the  so-called  northern  range  porta 
of  the  Atlantic  coast  and  United  Kingdom  ports  at  rates  generally  in  the  neighborhood 
of  2  shillings  3  pence  per  (quarter  of  8  bushels.  To  the  French  Atlantic  ports  the 
rate  was  then  about  2  sliilling  9  pence;  to  French  Mediterranean  ports,  about  2  shil- 
lings 10  pence;  to  west  Italy  ports,  the  same.  From  Gulf  ports  to  the  United  King- 
dom grain  cargoes  were  being  sent  forward  freely  for  2  shillings  3  pence,  while  to 
Mediterranean  ports  from  the  Gulf,  rates  ranged  anywhere  from  2  shillings  10^  pence 
to  3  shillings  3  pence. 

One  year  after  June,  1914,  or  10  months  jifter  the  war  started,  the  full  cargo  grain- 
charter  rates  on  steamers  from  North  Atlantic  ports  of  the  United  States  had  prac- 
tically quadrupled,  reaching  the  level  of  8  sliillingr?  IJ  pence  (in  June,  1915),  and 
all  the  other  ports  realized  similar  advances.  The  greatest  proportionate  advance, 
however,  ensued  with  the  months  following  the  summer  of  1915,  continuing  as  the 
shortage  of  steamers  became  more    pronounced. 

In  January  this  year  full  cargo  grain-steamer  charter  rates  were  at  the  level  of  about 
15  s'lilling-i  3  pence  per  quarter  of  8  bushels,  between  North  Atlantic  ports  and  the 
United  Kingdom;  to  French  Atlantic  ports  they  had  advanced  from  9  shillings  6 
pence  in  June,  1915,  to  the  level  of  16  shillings,  and  from  Gulf  ports  to  Marseilles 
they  had  climbed  from  10  shillings  to  24  shillings. 

LAW   OF   SUPPLY   AND   DEMAND   WORKING   RIGIDLY. 


Despite  the  fact  that  the  grain-charter  rates  had  doubled  within  the  space  of  seven 
months  from  the  summer  to  the  close  of  1915,  there  has  been  no  indication  as  yet  that 
they  have  reached  the  top  mark.  With  the  British  Government  enforcing  a  license 
system  for  each  voyage  of  all  British  ships  in  an  effort  to  overcome  the  shortage  in 
the  freight  space  for  the  carriage  of  foodstuffs,  and  practically  every  other  one  of  the 
allied  Governments  in  Europe  enforcing  similar  restrictions  on  their  merchant  steam- 
ers, the  shortage  of  tonnage  for  private  charters  has  lately  become  a  matter  of  serious 
consideration  by  shippers  generally. 

The  law  of  supply  and  demand  is  working  rigidly  in  the  charter  market  these  days, 
both  agents  and  owners  of  available  "free"  tonnage  for  grain  and  other  cargoes  asking 
rates  in  full  realization  of  the  fact.  From  the  beginning  of  this  year  down  to  the  last 
few  days,  full  cargo  grain-charter  rates  on  steamers  for  voyages  between  North  At- 
lantic ports  and  the  United  Kingdom  have  further  advanced  from  15  shillings  3  pence 
to  17  shillings  9  pence;  from  northern  range  ports  to  the  French  Atlantic  they  have 
increased  from  ]6  shillings  to  19  sliilUngs  3  pence;  northern  range  to  Marseilles  from 
23  to  24  shillings,  with  relative  advances  in  the  rates  out  of  Gulf  ports  to  the  United 
Kingdom  and  the  Mediterranean. 

How  full  cargo  grain-charter  rates  for  steamers  have  steadily  advanced  as  the  short- 
age of  tonnage  caused  by  the  war  has  grown  more  and  more  acute  and  the  comparative 
rates  which  prevailed  two  months  before  hostilities  commenced  may  be  seen  in  the 
following  table: 

How  grain  charter  rates  have  increased  since  the  outbreak  of  the  war. 
[Full  cargo,  steamers,  per  quarter  of  8  bushels.] 

March, 
1916. 

s.    d. 

North  Atlantic  to  United  Kingdom 2    3  8  li  15  3  17    9 

North  Atlantic  to  French  Atlantic 2    9  9  6  16  0  19    3 

North  Atlantic  to  JJar^eille 2  10  8  1  23  0  24    0 

North  Atlantic  to  we-t  Italv 2  10  8  2  22  6  24 

Gulf  ports  to  United  Kingdom 2    3  9  0  16  3  19    6 

Montreal  to  Mediterranean 

Gulf  ports  to  Mar-eille 

Gulf  ports  to  Mediterranean. . . 


Jime, 

June, 

January, 

1914. 

1915. 

1916. 

s.    d. 

s.    d. 

6.    d. 

2    3 

8    li 

15    3 

2    9 

9    6 

16    0 

2  10 

8    1 

23    0 

2  10 

8    2 

22    6 

2    3 

9    0 

16    3 

2    9 

8    2 

22    2 

3    3 

10    0 

24    0 

2  m 

8    4 

22    6 

25    6 


788      SHIPPING  BOAKD,  NAVAL  AUXILIAKr,  AND  MERCHANT  MARINE. 

"'kMiile  the  table  given  above  reflects  only  the  advances  which  have  taken  place  in 
the  steamer  charter  rates  for  full  cargoes  of  grain,  shipping  men  regard  the  grain  char- 
ters as  the  best  index  of  the  progress  of  charier  rates.  An  examination  of  the  petro- 
leum, deals,  and  timber,  as  well  as  the  miscellaneous  full-cargo  freight  charters  in  the 
same  periods  of  time,  also  shows  that  conditions  in  the  other  chartering  activities 
were  not  far  different. 

NEUTRALS    ENJOYING   HIGHEST   RATES    EVER   KNOWN. 

A  fact  of  striking  interest  at  the  present  time  is  the  strong  advantage  which  neutral 
shipowners  have  been  enjoying  to  the  fullest  degree  for  the  past  ten  months  orso. 
This  has  been  especially  true  in  the  full-cargo  charter  markets,  ^^^lile  their  British, 
French,  Italian,  and  Russian  competitors  have  been  compelled  to  operate  under 
Government  orders  at  rates  strictly  fixed  by  those  Governments,  the  neutral  owners 
have  been  able  to  go  into  the  market  with  their  "free"  tonnage  and  ask  and  receive 
the  highest  charter  rates  ever  known. 

Neutral  ships  having  the  freedom  of  the  seas,  exempt  from  the  disability  under 
which  the  British  tonnage  is  operating  ^ith  a  tax  of  50  per  cent  of  their  earnings, 
their  owners  have  been  and  are  reaping  a 'golden  harvest  from  the  present  exceptional 
values  which  their  steamers  command  in  ocean  traffic.  A  fair  example  of  the  advan- 
tage which  neutrals  are  enjoying  is  given  in  the  fact  that  while  British  Government 
Bhipbrokers  have  been  offering  137  shillings  6  pence  for  charters  between  the  River 
Plate  and  the  United  Kingdom,  neutral  owners  have  fixed  their  vessels  for  such 
voyages  with  wheat  cargoes  at  rates  of  152  shillings  6  pence. 

From  the  northern  range  ports  of  the  United  States  the  same  conditions  prevail  to 
the  great  benefit  of  the  neutral  owners.  The  British  Government's  shipbrokers  have 
refused  to  concede  over  15  shillings  6  pence  for  wheat  cargo  charters  to  British  tonnage 
on  the  Bristol  Channel  voyage,  neutrals  have  been  able  to  get  as  high  as  19  shillings  6 
pence.  On  time-charter  basis  for  12  months  rates  of  32  shillings  6  pence  have  been 
bid  for  neutrals,  while  the  British  tonnage  rate  has  been  restricted  to  about  25  shillings. 


Increase  in  Ocean  Freight  Rates  from  January  1,  1914,  to  January  1,  1916. 

[Report  prepared  by  the  Boston  district  office  of  the  Bureau  of  Foreign  and  Domestic  Commerce.) 

Department  of  Commerce, 
Bureau  of  Foreign  and  Domestic  Commerce, 

Boston,  February  9,  1916. 

We  received  yesterday  afternoon  the  statement  of  articles  and  ports,  referred  to  in 
your  letter  of  February  2,  for  which  you  desire  freight  rates  for  a  period  of  time. 

We  note  that  you  desire  the  freight  rates  the  first  of  each  quarter  on  a  number  of 
articles  from  Boston  to  London,  Liverpool,  Copenhagen,  Havre,  Marseilles,  Genoa, 
Naples,  Rio  de  Janeiro,  Valparaiso,  Callao;  also  import  rates  to  Boston  from  Liverpool, 
Buenos  Aires,  Rio  de  Janeiro,  Valparaiso,  and  Callao;  also  data  as  to  charter  rates  and 
other  available  pertinent  facts  connected  with  the  shipping  situation. 

In  conducting  this  investigation  I  expsct  to  ask  the  agents  of  the  steamship  lines 
for  the  rates  desired,  also  to  enlist  the  aid  of  commercial  organizations  (like  the  N.  E. 
Shoe  &  Leather  Association):  also  to  write  direct  to  a  large  number  of  individual 
firms  who  export  and  import  the  articles  stated.  If  there  is  anything  in  this  procedure 
that  is  not  in  order,  kindly  let  me  know  promptly.      .... 

I  have  to-day  called  on  a  good  many  men  in  connection  with  this  matter,  and  to  show 
the  trend  of  this  work  I  list  the  main  ones  as  follows: 

Mr.  John  Smith,  of  Patterson,  Wylde  &  Co.,  agents  for  the  Barber  Line.  This  line 
operates  chartered  ships  only  and  runs  from  Buenos  Aires  and  Montexddeo  (not  touch- 
ing at  Rio)  to  Boston,  whence  the  ships  go  to  New  York  for  return  cargo.  No  cargo  is 
accepted  at  Boston  and  no  rates  available  for  shipping  to  South  America.  Mr.  Smith 
promised  to  compile  the  rates  to  Boston  from  Buenos  Aires,  but  states  that  he  has 
five  ships  here  now  unloading  and  can  not  promise  this  material  within  a  week  at  the 
earliest. 

Mr.  F.  H.  Ryan,  of  A.  C.  Lombard's  Sons,  110  State  Street,  agent  for  the  Houston 
Line.  This  company  owns  its  ships  and.  runs  from  Buenos  Aires  and  Montevideo 
(not  touching  at  Kio)  to  Boston  and  thence  to  New  York  for  return  cargo.  As  a  rule 
they  do  not  accept  any  freight  at  Boston,  the  only  exceptions  being  at  rare  intervals 
when  they  have  much  unoccupied  space.  This  procedure  is  so  rare  that  they  can  not 
quote  any  rates  at  all  to  South  America.    Their  rates  from  the  Rio  Plata  to  Boston 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      789 

axe  the  same  as  to  New  York  and  will  have  to  be  obtained  from  the  latter.     However, 
Mr.  Ryan  promised  to  write  for  these. 

Mr.  F.  H.  Ryan,  of  A.  C.  Lombard's  Sors,  agents  for  the  Scandinavian-American 
Line.  He  promised  to  furnish  the  freight  rates  from  Boston  to  Copenhagen  for  the 
articles  stated  so  far  as  they  have  been  handled  by  his  line. 

Mr.  Charles  C.  Stewart,  agent  of  the  Cunard  Line.  Mr.  Stewart  promises  to  fur- 
nish as  early  as  possible,  though  this  may  be  a  week,  the  freight  rates  from  Boston  to 
Liverpool  and  to  London.  As  to  the  import  rates  from  Liverpool,  he  is  of  the  opinion 
that  they  do  not  have  all  of  this  on  record  and  is  not  sure  if  his  company  will  let  him 
furnish  what  he  has.  However,  he  will  take  the  matter  under  consideration  and 
furnish  same  if  found  advisable. 

Mr.  George  E.  Dudley,  general  agent  of  the  Boston  c^  Maine  Railroad,  furnished 
their  printed  cards  for  the  periods  stated,  showing  export  freight  rates  on  a  number 
of  articles  to  various  European  ports.  These  rates  are  not  firm  quotations,  but  show 
the  ruling  market  prices  at  the  various  dates.  The  cards  are  furnished  for  our  use 
and  may  be  kept. 

Mr.  L.  H.  Peters,  foreign  freight  agert  of  the  New  York  Central  &  Hudson  River 
and  the  Boston  &  Albany  Railroads,  furnished  similar  post  cards  showing  freight 
rates  on  various  articles  at  various  times  to  European  countries.  Cards  are  from  his 
files  and  have  to  be  returned,  so  they  are  being  copied  here. 

The  only  two  lines  to  Boston  from  South  America  are  the  Barber  Line  and  the  Hud- 
son Line,  the  Norton  Line  being  discontinued  to  this  port.  There  are  therefore  no 
rates  to  be  obtained  from  Rio  de  Janeiro,  Valparaiso,  or  Callao  to  Boston.  There  is 
no  line  from  Boston  to  South  America  accepting  fa-eight  at  this  port,  so  no  freight 
rates  obtainable  here  to  South  America.  Kindly  let  us  know  if  you  wish  us  to  obtain 
railroad  rates  from  Boston  to  New  York,  as  such  rates  have  to  be  added  to  the  South 
American  ocean  rates  from  New  York  on  goods  shipped  from  here. 

There  is  no  line  running  from  Boston  to  any  part  of  France,  and  no  rates  obtainable. 
The  French  Government  gives  a  preferential  treatment  to  goods  imported  in  French 
bottoms,  so  there  are  no  rates  quoted  for  goods  nor  any  goods  for  transshipment  in 
England.  All  goods  from  this  section  for  France  go  to  New  York  to  be  loaded  on 
French  boats. 

W.  A.  Graham  Clark, 

Commercial  Agent, 

Department  op  Commerce, 
Bureau  of  Foreign  and  Domestic  Commerce, 

Boston,  March  10,  1916. 

In  regard  to  the  ocean  freight  rate  investigation  I  beg  to  inclose  herewith*  some 
material  as  follows: 

(1)  Data  furnished  by  Mr.  J.  M.  McLachland  of  the  International  Mercantile  l\I#rine 
Co.,  84  State  Street,  Boston,  Mass.,  for  the  White  Star  and  Leland  Lines,  as  follows: 

Freight  rates  from  Boston  to  London. 
Freight  rates  from  Boston  to  Genoa. 
Freight  rates  from  Boston  to  Naples. 
Freight  rates  from  Boston  to  Liverpool. 
Freight  rates  from  Liverpool  to  Boston. 

(2)  Data  furnished  by  Mr.  Porter,  of  Furness,  Withy  &  Co.,  4  Liberty  Square,  Boston, 
Mass.,  agents  for  the  Warren  Line,  Furness  Line,  etc.,  as  follows: 

Freight  rates  from  Boston  to  Liverpool. 

(3)  Data  furnished  by  Mr.  F.  H.  Ryan,  of  A.  C.  Lombard's  Sons,  110  State  Street, 
Boston,  Mass.,  agents  for  the  Scandinavian-American  Line  and  for  the  Houston  Line, 
as  follows: 

Freight  rates  from  Boston  to  Copenhagen. 
Freight  rates  from  Buenos  Aires  to  Boston. 

(4)  Data  furnished  by  Mr.  L.  H.  Peters,  foreign  freight  agent  of  the  New  York  Cen- 
tral and  Boston  &  Albany  Railroads,  as  per  postcard  circulars  they  issue  regularly,  as 
to  freight  rates  from  Boston  to  various  points. 

Letters  sent  out  to  a  hundred  or  more  private  firms  produced  no  results,  probably 
because  these  firms  did  not  wish  to  divulge  their  rates  or  else  had  not  kept  a  record  of 
same  for  the  dates  wanted. 
Verv  truly,  yours, 

W.  A.  Graham  Clark, 

Commercial  Agent. 


790      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


Ocean  freight  rates  from  Boston  to  British  ports. 

GRAIN,    FLOUR,    PROVISIONS,    AND    APPLES. 

[Published  by  Boston  &  Maine  R.  R.  Co.,  Foreign  Freight  Department.] 


Date. 

Grain  (per  bushel). 

Sack  flour  (per  100 
pounds). 

Provisions  (per  100 
pounds). 

Apples  (per  Vi 

arrel). 

Liver- 

Lon- 

Glas- 

Liver- 

Lon- 

Glas- 

Liver- 

Lon- 

Glas- 

Liver- 

Lon- 

Glas- 

pool. 

don. 

gow. 

pool. 

don. 

gow. 

pool. 

don. 

gow. 

pool. 

don. 

gow. 

1914. 
Jan.     9 

$0,046 

$0,051 

SO. 051 

$0.14 

$0.15 

$0.17     $0,217 

$0,217 

$0,244 

$0,669 

$0,669 

$0.73 

16 

.041 

.046 

.041 

.12 

.13 

.15 

.217 

.^44 

.244 

.669 

.669 

.73 

23 

.035 

.(M6 

.051 

.12 

.13 

.15 

.217 

.217 

.244 

.669 

.669 

.73 

30 

.035 

.041 

.051 

.12 

.13 

.15 

.217 

.217 

.244 

.669 

.069 

.73 

Feb.     6 

.03 

.041 

.051 

.12 

.13 

.15 

.217 

.217 

.244 

.669 

.669 

.73 

13 

.03 

.041 

.051 

.12 

.13 

.15 

.217 

.217 

.244 

.669 

.669 

.73 

20 

.03 

.035 

.051 

.12 

.13 

.15 

.217 

.217 

.244 

.669 

.669 

.73 

27 

.03 

.035 

.051 

.12 

.13 

.15 

.217 

.217 

.244 

.669 

.669 

.73 

Mar.    6 

.03 

.035 

.051 

.12 

.13 

.15 

.217 

.217 

.244 

.669 

.669 

.73 

13 

.03 

.035 

.051 

.11 

.13 

.15 

.217 

.217 

.244 

.609 

.669 

.73 

20 

.03 

.035 

.051 

.11 

.12 

.15 

.217 

.217 

.244 

.669 

.669 

.73 

27 

Apr.  (1) 

10 

.03 

.03 

.051 

.11 

.12 

.14 

.217 

.217 

.244 

.669 

.669 

.73 

.03 

.03 

.041 

.11 

.12 

.14 

.217 

.217 

.244 

.669 

.669 

.73 

17 

.03 

.03 

.041 

.11 

.12 

.14 

.217 

.217 

.244 

.669 

.669 

.73 

24 

.03 

.03 

.041 

.10 

.11 

.13 

.217 

.217 

.244 

.669 

.669 

.73 

May     1 

.03 

.03 

.03 

.10 

.11 

.13 

.217 

.217 

.244 

.669 

.669 

.73 

8 

.03 

.03 

.03 

.10 

.11 

.13 

.217 

.217 

.244 

.669 

.669 

.73 

15 

.03 

.03 

.03 

.10 

.11 

.13 

.217 

.217 

.244 

.669 

.669 

.73 

22 

.03 

.03 

.03 

.10 

.11 

.13 

.217 

.217 

.244 

.669 

.669 

.73 

29 

.03 

.03 

.03 

.10 

.11 

.13 

.217 

.217 

.244 

.669 

.669 

.73 

June    5 

.03 

.03 

.03 

.10 

.11 

.13 

.217 

.217 

.214 

.669 

.669 

.73 

12 

.03 

.03 

.03 

.10 

.11 

.13 

.217 

.217 

.244 

.669 

.669 

.7^ 

19 

.03 

.03 

.03 

.10 

.11 

.13 

.217 

.217 

.244 

.669 

.669 

.73 

26 

.035 

.035 

.03 

.10 

.13 

.13 

.217 

.217 

.244 

.669 

.669 

.73 

July  \  3 

.041 

.041 

.03 

.10 

.13 

.14 

.217 

.217 

.244 

.669 

.669 

.73 

t!    10 

.046 

.051 

.03 

.12 

.13 

.14 

.217 

.217 

.244 

.669 

.669 

.73 

17 
24  ' 

.046 

.051 

.03 

.12 

.13 

.14 

.217 

.217 

.244 

.669 

.669 

.73 

31 

.051 

.051 

.03 

.15 

.16 

.15 

.217 

.217 

.244 

.669 

.669 

,73 

Aug.  7  2 

14  2 

21  2 

::::::::r::  ::■: 

28 

.071 

.081 

.041 

.20 

.21 

.23 

.326 

.326 

.353 

.973 

.973 

1.034 

Sept.    4 

.061 

.061 

.041 

.20 

.21 

.23 

.326 

.326 

.353 

.973 

.973 

1.034 

M 

.061 

.061 

.041 

.20 

.21 

23 

.326 

.326 

.353 

.791 

.791 

.853 

18 

.061 

.071 

.041 

.20 

.21 

.23 

.326 

.326 

.353 

.791 

.791 

.852 

25 

.071 

.071 

.041 

.20 

.22 

.23 

.326 

.326 

.353 

.791 

.791 

.852 

Oct.     2 

.071 

.081 

.041 

.21 

.22 

.24 

.326 

.326 

.353 

.791 

.791 

.852 

9 

.071 

.081 

.041 

.21 

.22 

.24 

.326 

.326 

.335 

.791 

.791 

.852 

16 

.071 

.081 

.041 

.21 

.22 

.24 

.326 

.326 

.353 

.791 

.791 

.852 

23 

.071 

.081 

.041 

.21 

.22 

.24 

.326 

.326 

.353 

.791 

.791 

.852 

30 

.081 

.101 

.081 

.21 

.22 

.24 

.326 

.326 

.353 

.791 

.791 

.852 

Nov.    6 

.111 

.132 

.081 

.24 

.25 

.27 

.326 

.326 

.353 

.791 

.791 

.852 

13 

.122 

.132 

.122 

.24 

.25 

.27 

.326 

.326 

.353 

.791 

.791 

.852 

20 

.132 

.142 

.122 

.24 

.25 

.27 

.326 

.326 

.353 

.791 

.791 

.852 

27 

.132 

.142 

.122 

.26 

.27 

.27 

.326 

.326 

.353 

.791 

.791 

.852 

Dec.    4 

.132 

.142 

.122 

.26 

.27 

.29 

.326 

.326 

.353 

.791 

.791 

.852 

11 

.132 

.152 

.122 

.26 

.27 

.29 

.326 

.326 

.353 

.791 

.791 

.852 

18 

.152 

.172 

.142 

.26 

.35 

.31 

.326 

.326 

.407 

.791 

.791 

.852 

24 

.162 

.172 

.142 

.40 

.40 

.31 

.38 

.38 

.407 

.791 

.791 

.852 

1915. 

Jan.     1 

.162 

.172 

.152 

.40 

.40 

.35 

.38 

.38 

.407 

.791 

.791 

.852 

8 

.172 

.182 

.178 

.40 

.40 

.40 

.38 

.38 

.407 

.791 

.791 

.852 

15 

.203 

.183 

.40 

.40 

.38 



.407 

.791 

.852 

22 

.203 

.203 

.40 

.40 

.38 



.435 

.791 

.913 

29 

.203 

.203 

.40 

.40 

.38 

.435 

.791 

.913 

Feb.    5 

.203 

.203 

.40 

.40 

.489 

.489 

.791 

.913 

12 

.223 

.203 

.40 

.40 

.489 

.489 

.791 



.973 

L:     19 

.243 

.203 

.40 

.40 

.543 

.516 

.791 

.973 

26 

.243 

.203 

.40 

.40 

.652 

.543 

.791 

.973 

Mar.    5 

.243 

.223 

.40 

.40 

.652 

.652 

.791 

.973 

12 

.264 

.223 

.45 

.40 

.652 

.652 

.791 

.973 

19 

.264 

.223 

.50 

.40 

.652 

.652 

.791 

.973 

26 

.264 

•  .223 

.40 

.40 

.652 

.652 

.791 



.973 

Apr.    2 

.264 

.264 

.223 

.40 

.50 

.40 

.652 

.652 

.652 

.791 

.791 

.973 

16 

.243 

.243 

.223 

.40 

.50 

.40 

.652 

.652 

.652 

1.034 

1.0.34 

.973 

23 

.243 

.223 

.223 

.40 

.45 

.45 

.652 

.652 

.652 

1.095 

1.034 

.973 

30 

.223 

.223 

.223 

.40 

.45 

.40 

.652 

.652 

.652 

1.217 

1.034 

.973 

'  No  data  available. 


» No  quotations  on  account  of  war. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      791 


Ocean  freight  rates  from  Boston  to  British  ports — Continued. 
GRAIN,    FLOUR,    PROVISIONS,    AND    APPLES— Continued. 


Date. 

Grain  (per  bushel). 

Sack  flour  (per  100 
pounds). 

Provisions  (per  100 
pounds). 

Apples  (per  barrel). 

Liver- 

Lon- 

Glas- 

Liver- 

Lon- 

Glas- 

Liver- 

Lon- 

Glas- 

Liver- 

Lon- 

Glas- 

pool. 

don. 

gow. 

pool. 

don. 

gow. 

pool. 

don. 

gow. 

pool. 

don. 

gow. 

1915. 

May     7 

$0,223 

SO. 223 

$0,223 

SO.  40 

$0.45 

JO.  46 

$0. 652 

^0.652 

?9.652 

S1.217 

SI.  034 

80.973 

14 

.223 

.223 

.223 

.45 

.50 

.46 

.652 

.652 

.652 

1.217 

;.034 

.973 

21 

.243 

.223 

.223 

.45 

.50 

.46 

.652 

.652 

.652 

1.217. 

1.034 

.973 

28 

.243 

.223 

.223 

.45 

.50 

.45 

.652 

.652 

.652 

1.217  1  1.034 

.973 

June    4 

.243 

.223 

.223 

.45 

.50 

.50 

.652 

.652 

.652 

1.217  i  1.034 

.973 

11 

.243 

.223 

.223 

.45 

.50 

.50 

.652 

.652 

.652 

1.217 

1.217 

18 

.223 

.223 

.223 

.45 

.50 

.50 

.652 

.652 

.652 

1.217 

1.217 

'".'973 

25 

.223 

.223 

.223 

.45 

.50 

.50 

.652 

.652 

.652 

1.217 

1.217 

.973 

July     2 

.203 

.203 

.223 

.45 

.50 

.50 

.652 

.652 

.652 

1.217 

1.217 

.973 

9 

.203 

.203 

.223 

.45 

.50 

.50 

.652 

.652 

.652 

1.25 

1.25 

1.25 

16 

.183 

.203 

.223 

.40 

.50 

.50 

.652 

.652 

.652 

1.25 

1.25 

1.25 

23 

.203 

.203 

.223 

.45 

.50 

.50 

.652 

.652 

.652 

1.25 

1.25 

1.25 

30 

.203 

.203 

.243 

.45 

.50 

.50 

.652 

.652 

.652 

1.25 

1.25 

1.25 

Aug.    6 

.203 

.203 

.243 

.45 

.50 

.50 

.652 

.652 

.652 

1.25 

1.25 

1.25 

13 

.203 

.203 

.243 

.45 

.50 

.50 

.652 

.652 

.652 

1.25 

1.25 

1.25 

20 

.203 

.203 

.243 

.45 

.50 

.50 

.652 

.652 

.652 

1.25 

1.25 

1.25 

27 

.203 

.203 

.243 

.45 

.50 

.50 

.652 

.652 

.652 

1.25 

1.25 

1.25 

Sept.    3 

.203 

.203 

.243 

.45 

.50 

.50 

.652 

.652 

.652 

1.25 

1.25 

1.25 

10 

.264 

.264 

.243 

.45 

.50 

.55 

.68 

.68 

.80 

1.25 

1.25 

1.25 

17 

.264 

.264 

.243 

.48 

.50 

.55 

.68 

.50 

.80 

1.25 

1.25 

1.25 

24 

.304 

.304 

.284 

.50 

.55 

.60 

.68 

.80 

.80 

1.25 

1.25 

1.50 

Oct.     1 

.365 

.365 

.365 

.60 

.65 

.60 

.80 

.80 

.80 

1.25 

1.25 

1.50 

8 

.406 

.406 

.365 

.65 

.75 

.65 

.80 

.90 

.80 

1.25 

1.25 

1.50 

15 

.406 

.406 

.365 

.70 

.75 

.70 

.90 

.90 

.90 

1.25 

1.25 

1.50 

22 

.365 

.365 

.365 

.70 

.70 

.70 

.90 

.90 

.90 

1.25 

1.25 

1.50 

29 

.385 

.385 

.406 

.70 

.75 

.75 

.90 

.90 

.90 

1.25 

1.25 

1.50 

Nov.    5 

.406 

.406 

.400 

.70 

.75 

.75 

.90 

.90 

.-90 

1.25 

1.25 

1.50 

12 

.406 

.406 

.406 

.70 

.75 

.75 

.90 

.90 

.90 

1.25 

1.25 

1.50 

19 

.385 

.385 

.406 

.70 

.80 

.75 

.90 

.90 

.90 

1.25 

1.25 

1.75 

26 

.385 

.365 

.385 

.70 

.80 

.75 

.90 

.90 

.90 

1.25 

1.25 

1.75 

Dec.    3 

.385 

.365 

.365 

.70 

.80 

.75 

.90 

.90 

.90 

1.25 

1.25 

1.75 

10 

.385 

.385 

.385 

.70 

.80 

.80 

.90 

.90 

.90 

1.25 

1.25 

1.75 

17 

.385 

.406 

.385 

.80 

.80 

.80 

.90 

.90 

.95 

1.25 

1.25 

1.75 

24 

.385 

.406 

.406 

.80 

.80 

.85 

1.00 

1.00 

.95 

1.25 

1.25 

1.75 

31 

.385 

.406 

.406 

.80 

.80 

.85 

1.00 

1.00 

1.00 

1.25 

1.25 

1.75 

1916. 

Jan.     7 

.406 

.406 

.406 

.80 

.85 

.85 

1.25 

1.25 

1.10 

1.25 

1.25 

1.75 

14 

.406 

.406 

.406 

.80 

.80 

.85 

1.25 

1.25 

1.10 

1.25 

1.25 

1.75 

21 

.406 

.406 

.406 

.80 

.80 

1.00 

1.25 

1.25 

1.25 

1.25 

1.25 

1.75 

LUMBER  (HARD  AND  SOFT),  TOBACCO,  AND  COTTON. 
[Published  by  Boston  &  Maine  R.  R.  Co.,  Foreign  Freight  Department.] 


Lumber  (per  100  pounds). 

Tobacco  (per  100 
pounds). 

Cotton  (per 
pounds) 

100 

Date. 

Hard. 

Soft. 

Li 

ver- 

Lon- 

Glas- 

Liver- 

Lon- 

Glas- 

Liver- 

Lon- 

Glas- 

Liver- 

Lon- 

Glas- 

P 

30l. 

don. 

gow. 

pool. 

don. 

gow. 

pool. 

don. 

gow. 

pool. 

don. 

gow. 

1914. 
Jan.     9     $0 

18* 

$0.21 

$0.17 

$0.24 

$0.27 

$0.24 

$0.37 

$0.35 

$0.35 

$0.20 

$0.25 

$0.30 

16 

18* 

.21 

.17 

.24 

.27 

.24 

.37 

.35 

.35 

.18 

.25 

.30 

23 

18* 

.21 

.17 

.24 

.27 

.24 

.37 

.35 

.35 

.18 

.25 

.30 

30 

IS* 

.21 

.17 

.24 

.27 

.24 

.37  1       .35 

.35 

.18 

.25 

.30 

Feb.    6 

18* 

.21 

.17 

.24 

.27 

.24 

.37         .35 

.35 

.16 

.25 

.30 

13 

18* 

.21 

.17 

.24 

.27 

.24 

.31         .35 

.35 

.16 

.25 

.30 

20 

IS* 

.21 

.17 

.24 

.27 

.24 

.31         .35 

.35 

.16 

.25 

.30 

27 

IS* 

.21 

.17 

.24 

.27 

.24 

.31  1       .35 

.35 

.12 

.25 

.30 

Mar.    6 

18* 

.21 

.17 

.24 

.27 

.24 

.31         .35 

.35 

.12 

.25 

.30 

13 

IS* 

.21 

.17 

.24 

.27 

.24 

.31         .35 

.35 

.12 

.25 

.30 

20 

IS* 

.21 

.17 

.24 

.27 

.24 

.31         .35 

.35 

.12 

.25 

.30 

27 

18J 

.21 

.17 

.24 

.27 

.24 

.31 

.35 

.35 

.12 

.25 

.30 

792      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MAIMNE. 


Ocean  freight  rates  from  Boston  to  British  ports — Continued. 
LUMBER  (HARD  AND  SOFT),  TOBACCO,  AND  COTTON— Continued. 


Lumber  (per  100  pounds). 

Tobacco  (per  100 
pounds). 

Cotton  (per 
pounds) 

100 

Date. 

Hard. 

Soft. 

Liver- 

Lon- 

Glas- 

Liver- 

Lon- 

Glas- 

Liver- 

Lon- 

Glas- 

Liver- 

Lon- 

Glas- 

pool. 

don. 

gow. 

pool. 

don. 

gow. 

pool. 

don. 

gow. 

pool. 

don. 

gow. 

1914. 

Apr.  3 ' 
10 

$0.18i 

$0.21 

$0.17 

$0.24 

$0.27 

$0.26 

$0.31 

$0.35 

$0.35 

$0.12 

$0.25 

$0.30 

17 

.  18J 

.21 

.17 

.24 

.27 

.26 

.31 

.35 

.35 

.12 

.25 

.30 

24 

.16§ 

.21 

.17 

.22 

.27 

.26 

.31 

.35 

.35 

.12 

.25 

.30 

May     1 

.m 

.21 

.17 

.22 

.27 

.26 

.31 

.35 

.35 

.12 

.25 

.30 

8 

.16J 

.21 

.17 

.22 

.27 

.26 

.31 

.35 

.35 

.12 

.25 

.30 

15 

.16i 

.21 

.17 

.22 

.27 

.26 

.31 

.35 

.35 

.15 

.25 

.30 

22 

.16i 

.21 

.17 

.22 

.27 

.26 

.31 

.35 

.35 

.12 

.25 

.30 

29 

.16i 

.21 

.17 

.22 

.27 

.26 

.31 

.35 

.35 

.12 

.25 

.30 

June    5 

.16J 

.21 

.17 

.22 

.27 

.26 

.31 

.35 

.35 

.12 

.25 

.30 

12 

.16* 

.21 

.17 

.22 

.27 

.26 

.31 

.35 

.35 

.15 

.25 

.30 

19 

.16i 

.21 

.17 

.22 

.27 

.26 

.31 

.35 

.35 

.12 

.25 

.30 

26 

.16* 

.21 

.17 

.22 

.27 

.26 

.31 

.35 

.35 

.12 

.25 

.30 

July    3 

.16i 

.21 

.17 

.22 

.27 

.26 

.31 

.35 

.35 

.12 

.25 

.30 

10 

.16J 

.21 

.17 

.22 

.27 

.26 

.31 

.35 

.35 

.12 

.25 

.30 

17 
24  ' 

.16i 

.21 

.17 

.22 

.27 

.26 

.31 

.35 

.35 

.15 

.25 

.30 

31 

.16J 

.21 

.17 

.22 

.27 

.26 

.31 

.35 

.35 

.25 

.25 

.30 

Aug.  7  s 
14* 

21  ' 

::: 

28 

.23  J 

.26 

.29 

.32 

.31 

.45 

.25 

Sept.  4 
11 

.23i 
.23i 

26 

20 

29 

.32 

.27 

.31 

.45 

.25 

.26 

.20 

.29 

.32 

.27 

.31 

.45 

.45 

.25 

.30 

18 

.23  J 

.26 

'      .20 

.29 

.32 

.27 

.31 

.45 

.45 

.25 

.30 

25 

.23§ 

.26 

.20 

.29 

.32 

.27 

.31 

.45 

.45 

.30 

.30 

Oct.     2 

.23i 

.26 

.20 

.29 

.32 

.27 

.31 

.45 

.45 

.30 

.30 

9 

.23i 

.26 

.20 

.29 

.32 

.27 

.31 

.45 

.45 

.30 

.30 

16 

.23§ 

.26 

.20 

.29 

.32 

.27 

.31 

.45 

.45 

.30 

.30 

23 

.23J 

.26 

.20 

.29 

.32 

.27 

.31 

.45 

.45 

.30 

.30 

30 

.23* 

.26 

.20 

.29 

.32 

.27 

.40 

.38 

.45 

.35 

.30 

Nov.    6 

.26§ 

.28 

.20 

.32 

.33 

.27 

.40 

.38 

.45 

.45 



.30 

13 

.25 

.30 

.20 

.30 

.35 

.27 

.40 

.38 

.45 

.45 

.30 

20 

.25 

.30 

.20 

.30 

.35 

.27 

.45 

.38 

.45 

.45 

.30 

27 

.26 

.30 

.20 

.32 

.35 

.27 

.50 

.38 

.45 

.50 

.30 

Dec.    4 

.26 

.30 

.20 

.32 

.35 

.27 

.50 

.38 

.50 

.60 

.50 

11 

.30 

.30 

.20 

.35 

.35 

.27 

.60 

.62 

.50 

.60 

.50 

18 

.30 

.30 

.20 

.35 

.35 

.27 

.60 

.62 

.50 

.60 

.50 

24 

.38 

.38 

.20 

.435 

.435 

.27 

1.00 

1.00 

.50 

.75 

.50 

1915. 

Jan.     1 

.38 

.38 

.20 

.435 

.435 

.27 

1.00 

1.00 

.50 

.75 

.50 

8 

.38 

.38 

.20 

.435 

.435 

.27 

1.00 

1.00 

.50 

.85 

.50 

15 

.435 

.40 

.40 

.543 
.543 
.543 

1.25 
1.25 
1.25 

i.no 
i.no 

1.00 

1.00 

22 

""".'46' 

1.00 

' 

29 

.35 

1.00 

1.00 

Feb.    5 

.50 

.50 

..'>43 

.40 

1.25 

1.00 

1.00 

1.00 

12 

.45 

.35 

.543 

.40 

1.25 

1.00 

1.00 

1.00 

19 

.45 

.35 

.543 

.40 

1.25 

1.00 

1.00 

1.00 

26 

.543 

.40 

.652 

.45 

1.50 

1.00 

1.00 

I.no 

Mar.    5 

.543 
.543 

.40 
.45 

.45 
.50 

1.25 
1.25 

1.00 
1.00 

1.00 
1.00 

1.00 

12 

.652 

1.00 

19 

.543 

.475 

.652 

.54 

1.50 

1.00 

1.00 

1.00 

26 

.543 

.475 

.652 

.54 

1.50 

1.00 

1.25 

1.00 

Apr.    2 

.543 

.CO 

.475 

.652 

.65 

.54 

L50 

1.50 

1.00 

1.25 

LOO 

16 

.652 

.61 

.575 

.76 

.67 

.64 

1.50 

1.50 

1.00 

1.25 

1.00 

23 

.052 

.61 

.575 

.76 

.67 

.64 

1.50 

1.50 

1.00 

1.25 

1.00 

30 

.f-52 

.'■.52 

.575 

.76 

.76 

.64 

1.25 

1.50 

I.no 

1.00 

1  00 

May     7 

.652 

.652 

.575 

.76 

.76 

.64 

1.25 

1.50 

1.00 

1.00 

I.no 

14 

.652 

.652 

.575 

.76 

.76 

.64 

1.25 

1.50 

I.no 

1.00 

1.00 

21 

.C52 

.652 

.575 

.76 

.76 

.64 

1.25 

1.50 

1.00 

1.00 

1.00 

28 

.652 

.652 

.575 

.76 

.76 

.64 

1.25 

1.50 

1.00 

1.00 

LOO 

June    4 

.652 

.652 

.60 

.76 

.76 

.66 

1.25 

1.50 

1.00 

1.00 

1.00 

11 

.652 

.652 

.60 

.76 

.76 

.65 

1.25 

1.50 

1.00 

1.00 

1  00 

18 

.652 

.652 

.60 

.76 

.76 

.66 

1.25 

1.50 

1.00 

1.00 

1.00 

25 

.652 

.652 

.60 

.76 

.76 

.66 

1.25 

1.50 

1.00 

I.no 

1.00 

July    2 

.652 

.652 

.60 

.76 

.76 

.66 

1.25 

1.50 

1.00 

1.00 

1.00 

9 

.653 

.652 

.60 

.76 

.76 

.66 

1.15 

1.50 

1.00 

1.00 

1  00 

16 

.598 

.652 

.60 

.706 

.76 

.66 

1.15 

1.50 

1.00 

23 

.598 

.652 

.60 

.706 

.76 

.66 

1.15 

1.50 

1.00 

30 

.598 

.652 

.60 

.706 

.76 

.66 

1.15 

1.50 

1.25 

1.00 

i.66 

1  No  report  at  hand, 


« Unsettled  conditions  on  account  of  war. 


» No  data  available. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      793 


Ocean  freight  rates  from  Boston  to  British  ports — Continued. 
LUMBER  (HARD  AND  SOFT),  TOBACCO,  AND  COTTON— Continued. 


Lumber  (per  100  pounds). 

Tobacco  (per  100 

Cotton  (per  100 

Date. 

Hard. 

Soft. 

pounds). 

pounds). 

Liver- 
pool. 

Lon-   1   Glas- 
don.       gow. 

Liver- 
pool. 

Lon- 
don. 

Glas- 
gow. 

Liver- 
pool. 

Lon- 
don. 

Glas- 
gow. 

Liver- 
pool. 

Lon- 
don. 

Glas- 
gow. 

1915. 

Aug.  6 
13 
20 
27 

Sept.  3 
10 
17 
24 

Oct.     1 

8 

15 

22 

29 

Nov.  5 
12 
19 
26 

Dec.  3 
10 
17 
24 
31 

1916. 
Jan.     7 
14 
21 

SO. 598 
.598 
.598 
.598 
.598 
.65 
.65 
.65 
.70 
.70 
.70 
.70 
.70 
.70 
.70 
.70 
.75 
.85 
.85 
.95 
.95 
.95 

1.10 
1.10 
1.10 

SO.  652 
.652 
.652 
.652 
.652 
.70 
.70 
.70 
.75 
.80 
.85 
.90 
.95 
.95 
.95 
.95 
.95 
.95 
.95 
.95 
.95 
.95 

1.10 
1.10 
1.10 

$0.60 
.575 
.5T5 
.575 
.60 
.60 
.60 
.65 
.68 
.75 
.70 
.70 
.70 
.70 
.70 
.725 
.725 
.775 
.775 
.78 
.80 
.78 

.80 
.83 
.83 

$0,706 

.706 

.706 

.706 

.706 

.70 

.70 

.70 

.75 

.75 

.75 

.75 

.80 

.80 

.80 

.80 

.85 

1.00 

1.00 

1.20 

1.20 

1.20 

1.20 
1.20 
1.20 

$0,679 

.679 

.679 

.679 

.679 

.75 

.75 

.75 

.80 

.85 

.90 

.95 

1.00 

1.00 

1.00 

1.00 

1.00 

1.00 

1.00 

1.00 

1.00 

1.00 

1.20 
1.20 
L20 

$0.66 
.64 
.64 
.64 
.64 
.66 
.66 
.70 
.73 
.83 
.75 
.75 
.75 
.75 
.75 
.78 
.79 
.84 
.84 
.84 
.84 
.84 

.84 

.89 

•    .89 

$1.15 
1.15 
1.15 
1.15 
1.15 
1.15 
1.15 
1.15 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.35 
1.35 
1.50 
1.75 
2.00 

3.00 
3.00 
3.00 

$1.40 
1.40 
1.40 
1.40 
1.40 
1.17 
1.20 
1.20 
1.30 
1.50 
1.50 
1.50 
1.50 
1.50 
1.50 
1.50 
1.50 
1.50 
1.50 
2  00 
2.00 
2.00 

$1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.50 
1.50 
1.50 
1.50 

2.00 
2.25 
2.25 

$1.00 
1.00 
1.00 
1.00 
1  00 
1.00 
1.15 
1.25 
1.25 
1.25 
1.25 
1.00 
1.25 
1.25 
1.25 
1.25 
1.25 
1.50 
1.75 
2.00 
2.00 
2.25 

2.75 
2.75 
2.75 



'$i.'25' 

"2.06' 
2.00 
2.25 

3.00 
3.00 
3.00 

$1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.25 
1.50 
1.50 
2.00 
1.50 

2.00 

Import  freight  rates. 
FROM  LIVERPOOL  TO  BOSTON. 


Commodity. 

Unit. 

1914 

Jan.  1. 

Apr.  1. 

July  1. 

Oct.  1. 

Cotton  goods 

40  cubic  feet 

2,240  pounds 

40  cubic  feet 

2,240  pounds 

40  cubic  feet 

2,240  pounds 

do 

$9.13 

4.26 

2.43-  4.26 

8.21-21.29 

9.13 

3.04 

/            9.13 

\          10. 34 

4.26 

6.08 

18.25 

9.13-18.25 

$9.13 

4.26 

2.43-  4.26 

8.21-21.29 

9.13 

3.04 

9.13 

10.34 

4.26 

6.08 

18.25 

9. 13-18. 25 

$9.13 

4.26 

2.  43-  4. 26 

8. 21-21. 29 

9.13 

3.04 

9.13 

10.34 

4.26 

6.08 

18.25 

9.13-18.25 

$9.13 

Cotton,  raw 

4.28 

Earthenware  and  china 

2.43-  4.26 

Hides  and  skins 

8.21-21.29 

India  rubber 

13.38 

Iron,  lerromanganese 

3.04 

Tin  in  bars ... 

9.13 
10.34 
4.26 

do 

f       do 

6.08 

Wool,  raw 

(40  cubic  feet 

do 

18.25 
9.13-18.25 

Measuremen  t  goods 

Commodity. 


Cotton  goods 

Cotton,  raw 

Earthenware  and  china. 

Hides  and  skins 

India  rubber 

Iron,  ferromanganese  - . . 

Tin,  in  bars 


Vegetable  oils 

Wool,  raw 

Measurement  goods. 


Unit. 


40  cubic  feet.. 
2,240  pounds. 
40  cubic  feet.. 
2,240  pounds. 
40cubif>feet.. 
2,240  pounds. 

do 


do 

f....do 

[40  cubic  feet. 
do 


1915 


Jan.  1. 


$13.38 

5.47 

3. 04-  4. 26 

8. 21-21. 29 

13.88 

3.04 

/  9.13 

\  10.34 

5.47 

9.13 

18.25 

13.38-2L90 


Apr.  1. 


$13. 38 

5.47 

3. 04-  4. 26 

8. 21-21. 29 

13.38 

3.04 

9.13 

10.34 

5.47 

9.13 

18.25 

13.38-21.90 


Julyl. 


Oct.  1. 


Jan.  1, 
1916. 


$13. 

6. 

3.65-  6. 

8.21-21. 

13. 

3. 

9. 

10. 

5. 

9. 

18. 

13. 38-21. 


38 
08 
08 
29 
38 
04  I 
13 
34 
47  j 
13 
25  1 
90   13 


$13. 38 

6.08 

65-  6. 08 

21-21.29 

13.38 

3.65 

9.13 

10.34 

5.47 

9.13 

18.25 

38  21.90 


$13.38 

6.08 

3. 65-  6. 08 

8. 21-21. 29 

13.38 

3.65 

9.13 

10.34 

5.47 

9.13 

18.25 

13. 38-21. 90 


794      SHIPPING  BOARD,  XAVAL  AUXIL1.\RY,  AND  MERCHANT  MARINE. 

Iviport  freight  rates — Continued. 
FROM  BUEXOS  AIRES  TO  BOSTON. 


Commodity. 

Unit. 

1914 

Jan.  1. 

Apr.  1. 

Julyl. 

Oct.  1. 

Hides,  salt 

Per  ton 

$6.50 

.70 

4.50 

$6.50 

.70 

4.50 

$6.50 

.70 

4.50 

$6.60 

Hides,  dry 

100  pounds 

40  cubic  feet 

.70 

Wool,  raw 

4.50 

Commodity. 

Unit. 

1915 

Jan.  1, 

Jan.  1. 

Apr.  1. 

Julyl. 

Oct.  1. 

1916. 

Hides,  salt 

Per  ton 

$14.00 

$14. 00 

S14.0fl 

$14.00 

1.50 

12.00 

$14.00 

Hides,  dry 

Wool,  raw 

100  pounds 

40  cubic  feet 

1.50 
12.00 

1.50                1.50 
12. 00              12. 00 

1.50 
12.00 

Increase  in  Ocean  Freight  Rates  to  the  Far  East  from  January  1,  1914,  to 

January  1,  1916. 

[Report  prepared  by  the  Seattle  district  office  of  the  Bureau  of  Foreign  and  Domestic  Commerce.) 

The  following  statement  regarding  the  ocean  freight  situation  at  Seattle  on  March 
2,  1916,  was  prepared  by  Mr.  W.  B.  Henderson,  commercial  agent  in  charge  of  the 
Seattle  district  office  of  the  Bureau  of  Foreign  and  Domestic  Commerce: 

Seattle,  Wash.,  March  2,  1916. 

Referring  again  to  your  communication  of  February  2,  in  which  you  requested  a 
detailed  report  on  ocean  freight  rates  for  specified  commodities  and  periods  between 
Seattle  and  foreign  ports,  I  have  the  honor  to  submit  herewith  the  result  of  the  inves- 
tigation on  the  sheets  that  were  furnished  by  the  bureau. 

In  connection  with  tliis  report  I  am  submitting  herewith,  I  have  to  state  my  utter 
inability  to  cover  all  commodities,  all  periods,  and  all  destinations.  However,  the 
report  is  as  complete  as  it  could  possibly  be.  owing  to  the  unsettled  conditions  in 
shipping  faciUties  and  the  entire  absence  of  published  tariff  schedules  since  the 
breaking  out  of  the  European  war. 

My  investigation  necessitated  about  35  calls  for  interviews  with  managers  of  ocean 
steamship  companies,  commercial  organizations,  and  transportation  companies.  In 
most  every  case  on  first  presenting  the  matter  to  a  steamship  line  or  the  manager  of 
a  transportation  bureau  I  was  met  with  the  blunt  announcement ' '  there  is  no  such  thing 
now  as  an  ocean  freight  tariff."  They  also  said  that  old  schedules  had  been  de- 
stroyed. Nevertheless,  by  persistence  I  secured  copies  of  the  1914  tariff  schedules 
for  most  Lines  operating  in  and  out  of  this  port.  As  to  rate  quotations  for  the  latter 
part  of  1915  and  for  January,  1916,  there  are  none,  or  practically  none.  Most  of  the 
ships  are  working  for  all  they  can  get  or  what  they  think  they  can  get.  There  are, 
however,  exceptions  to  this  state  of  affairs.  These  exceptions  are  in  the  case  of  the 
Osaka  Shosen  Kaisha  and  the  Nippon  Yusen  Kaisha,  the  two  regular  Japanese  lines. 
The  rates  published  by  these  companies  in  the  tariff  schedules  for  1914  are  more  nearly 
in  conformity  with  the  charges  they  made  for  freight  during  the  whole  of  1915.  For 
1916  (January),  their  rates  were  i^erceptibly  liigher,  but  in  no  wise  to  be  likened  to 
the  enormous  increases  asked  and  obtained  by  others — notably  the  chartered  lines. 

This  investigation  brought  out  some  anomalous  conditions  bordering  onto  a  para- 
doxical aspect,  inasmuch  as  there  are  a  greater  number  of  Lines  in  the  trade,  a  large 
increase  in  the  number  of  vesesls  entering  and  clearing  from  this  port  and  Tacoma, 
while  at  the  same  time  freight  in  these  ports  was  never  so  congested  and  exporters  so 
hard  put  to  secure  tonnage  space.  Yet  at  the  same  time,  also,  this  section  is  manu- 
facturing and  producing  but  a  small  proportion  more  than  it  was  at  this  time  two 
years  ago. 

This  condition,  with  its  pecuLiar  aspects,  is  accounted  for  by  the  arrangements  that 
the  transcontinentaL  railroads  have  with  the  regular  steamship  companies  plying  to 
orient  ports.     The  Chicago.  Milwaukee  &  St.  Paul  and  the  Northern  Pacific  RaiLroada 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      795 

have  an  understanding  or  a  contract,  as  it  were,  vnih  the  two  regular  Japanese  steam- 
Bhip  companies  for  practically  their  entire  space.  They  apportion  this  space  so  much 
to  New  York,  so  much  to  Chicago,  to  St.  Louis,  or  Kansas  City,  as  the  case  may  be, 
and  get  the  benefit  of  the  rail  charges  on  the  long  haul.  This  practically  leaves  the 
local  exporter  out  of  the  deal,  and  as  a  consequence  he  must  stay  out  of  the  business 
or  else  fall  back  on  the  chartered  lines  and  tramp  vessels  with  their  advance  in  ocean 
freight  rates  of  from  100  to  1,000  per  cent. 

This  situation  applies  to  a  large  extent  to  the  native  products  of  this  section,  such 
as  lumber,  box  shocks,  wheat  and  flour,  and  canned  salmon.  Then,  too,  there  appears 
to  be  a  discrimination  on  the  part  of  the  Japanese  lines  on  certain  commodities,  as  for 
instance,  a  representative  of  one  of  the  largest  manufactiu"ers  and  exporters  of  flour 
told  me  that  the  Japanese  lines  had  allotted  so  much  space  for  flour  from  Puget  Sound 
ports  to  (  hina.  The  amount  of  space  which  he  mentioned  is  about  two-fifths  of  the 
product  for  export  by  the  mills  of  this  section.  This,  he  inferred,  was  to  the  advantage 
of  Japan,  which  country  is  supplying  the  other  three-fifths  to  China  from  her  own  mills. 

Another  large  export  firm  here  claims  that  it  can  not  get  space  promised  at  any 
rates  for  the  next  five  months.  He  stated  a  specific  case  where  he  had  for  export  a 
product  which  is  now  being  booked  by  the  steamship  companies  at  the  rate  of  $35 
per  ton.  He  tried  for  space  some  months  ago  and  finally  secured  space  from  San 
Francisco  on  the  condition,  however,  that  the  shipment  be  transported  from  Seattle 
over  the  lines  of  a  certain  railroad  named.  It  so  happens  that  in  order  to  transport 
the  goods  over  the  particular  line  named  that  he  must  ship  from  Seattle  to  Denver 
and  thence  to  San  Francisco,  thus  making  the  freight  rates  prohibitive.  He  is  now 
in  the  market  for  the  same  commodity  on  the  lines  of  the  specified  railroads  at  a  point 
nearer  San  Francisco,  while  his  consignment  is  Ijdng  in  the  Seattle  warehouse. 

No  living  man  co,uld  make  a  complete  analysis  of  the  ocean  freight  rates  here  as 
they  present  themselves  now,  and  only  a  very  poor  comparison  can  be  had.  So  far 
as  securing  space  is  concerned  for  ships  booked  to  sail  in  the  near  future,  it  is  out  of 
the  question.  A  few  orders  are  being  booked  for  four  or  five  months  ahead  and  it 
would  appear  that  unless  the  exporter  received  anormous  profits  on  commodities 
exported  a  year  ago  when  ocean  freight  rates  were  comparatively  normal,  it  is  hard 
to  see  where  he  can  get  any  profit  now  (even  if  he  secures  space)  at  the  abnormally 
high  rates.  Yet  they  are  all  in  the  market  for  tonnage  space,  and  as  a  consequence 
new  shipping  agencies  are  daily  springing  up;  old  lines  are  adding  extra  vessels;  and 
contracts  are  being  let  for  building  new  ships.  Besides  the  Frank  Waterhouse  Co. 
and  the  H.  F.  Ostrander  Co.,  who  are  both  chartering  a  large  number  of  vessels,  Grif- 
fiths &  Sons,  old-time  shippers,  have  chartered  several  tramp  vessels  and  impressed 
them  into  the  trade,  and  recently  a  local  concern  has  received  a  contract  to  build 
immediately  a  million-dollar  ship. 

I  am  herewith  inclosing  the  sheets  filled  out  as  fully  as  the  figures  can  be  obtained. 
I  have  also  supplemented  it  by  a  statement  showing  the  present  rates  that  have  been 
secured  on  tonnage  from  Seattle  to  Vladivostock,  and  I  am  also  submitting  a  partial 
list  of  the  parties  interviewed  in  obtaining  these  rates. 
Very  truly,  yours, 

W.  B.  Henderson,  Comvierdal  Agent. 

I  interviewed  the  following  concerns  here  re  the  ocean  freight  rates : 

Mr.  B.  J.  Orvinsck,  of  W.  R.  Grace  &  Co.,  as  to  the  import  rates  from  Cliilean  points 
(Valparaiso,  as  specified  in  the  report).     He  could  only  give  me  rates  on  copper. 

Mr.  Fawkner,  of  Fawkner-Currie  &  Co.,  who  operate  a  steamship  line  between  here 
and  South  America,  as  to  import  rates  on  nitrates  from  Valparaiso. 

Mr.  W.  A.  Hears,  of  the  transportation  bureau  of  the  Seattle  Chamber  of  Commerce, 
on  rates  generally.     No  particular  information. 

Mr.  W.  D.  Benson,  manager  of  the  Pacific  Coast-Oriental  Tariff  Bureau,  who  is  also 
connected  with  Frank  AVaterhouse  &  Co. ,  as  to  rates  generally.  He  supplied  me  with 
the  greater  portion  of  the  rates  for  1914  and  part  of  1915,  and  furnished  me  with  a  num- 
ber of  schedules. 

Mr.  F.  M.  Studley,  manager  of  the  Nippon  Yusen  Kaisha,  on  rates  generally  to 
the  Orient.  He  supplied  me  with  rates  on  several  commodities  to  Hongkong  and 
Shanghai. 

Mr.  Manion,  of  the  Blue  Funnel  Line,  supplied  me  with  rates  to  London. 

Mr.  D.  W.  Burchard,  of  the  Hamburg-American  Line.  No  information.  His  line 
is  interned  and  out  of  business,  and  the  documents  were  burned  at  a  recent  fire. 

Mr.  T.  Stuart,  recently  connected  with  Robinson  &  Morrison,  furnished  some  infor- 
mation regarding  import  rates  to  Sydney. 


796      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

Mr.  Pettibone,  formerly  of  the  Canadian  Trading  Co. ,  now  of  the  American  Trading 
Co.,  furnished  me  with  rates  on  lumber  to  Hongkong  and  Shanghai.  Mr.  Hodge,  of 
the  Northwest  Trading  Co. ,  furnished  rates  on  flour,  bar  iron,  sheet  iron,  wire,  and  some 
commodity  rates  to  Shanghai  and  Hongkong. 

Mr.  Parrott,  of  the  firm  of  Parrott  &  Co.,  brokers,  furnished  general  information. 

Mr.  Erickson,  of  the  American  Express  Co. ,  gave  me  considerable  information  regard- 
ing rates,  especially  on  the  old  schedules  of  1914. 

Mr.  W.  S.  Allen,  assistant  manager  of  the  Fisher  Flouring  Mills,  furnished  me  valua- 
ble information  regarding  export  rates  to  the  Orient  on  flour. 

Mr.  Robert  Hill,  manager  of  the  Merchants'  Exchange,  gave  me  valuable  assistance 
regarding  rates  on  flour  and  wheat  to  London. 

Mr.  H.  F.  Ostrander  furnished  valuable  information  as  to  rates  on  a  number  of  com- 
modities to  Shanghai  and  Hongkong. 

The  following  shipping  agencies  and  exporters  were  visited  in  Tocoma,  in  connec- 
tion with  the  investigation  of  ocean  freight  rates: 

Mr.  McKune,  chairman  transportation  bureau,  Tocoma  Commercial  Club  and 
Chamber  of  Commerce. 

Mr.  Giles  Smith,  acting  secretary,  Tacoma  Commercial  Club  and  Chamber  of  Com- 
merce. 

Mr.  Hans  Heidner,  importer  and  exporter. 

Mr.  J.  B.  Van  Fossen,  agent  for  Osaka  Shosen  Kaisha. 

Mr.  J.  T.  Steeb,  customhouse  broker. 

Others  interviewed  in  Seattle  are  as  follows: 

A  representative  of  M.  Fiu'uya  &  Co. 

Northwest  Trading  Co. 

Mr.  Pettibone.  of  the  American  Trading  Co. 

The  agent  of  the  Norwegian-American  Line,  for  information  re  freight  rates  to 
Scandinavian  ports. 

A  representative  of  W.  R.  Grace  &  Co.,  who  are  agents  for  the  Johnson  Line,  regard- 
ing rates  to  Copenhagen. 

The  vice  consul  for  Norway. 

A  representative  of  Fawkner-Currie  Co.,  shipping  agents. 


SIIII'I'INli  BOARD,  NAVAL  AUXILIAKV,  AND  MliliCllANT  MARINE.      797 


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SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      799 

Increase  in  Ocean  Freight  Rates  from  January  1,  1914,  to  January  1,  1916. 
(Report  prepared  by  the  New  Orleans  district  office  of  the  Bureau  of  Foreign  and  Domestic  Ck)mmerce.] 

New  Orleans,  March  10,  1916. 

In  compliance  with  the  instructions  given  in  your  letter  of  February  2,  dictated 
by  Commercial  Agent  Jones,  there  are  inclosed  herewith  ocean  freight  rate  schedules 
covering  the  traffic  between  New  Orleans  and  European  ports.  These  schedules 
are  as  complete  as  it  has  been  possible  to  make  them  from  the  data  available.  New 
Orleans  ships  very  little  outside  of  the  first  two  classifications  on  the  prepared  schedule, 
and  it  has  been  impossible  to  obtain  rates  that  would  be  of  any  value  for  comparative 
purposes  on  steel  products,  machinery,  mineral  and  petroleum  products,  and  mis- 
cellaneous manufactured  goods.  A  large  amount  of  oil  is  credited  to  the  export 
figures  of  this  port,  but  this  moves  in  full  cargo  lots  cliiefly  from  Baton  Rouge. 

The  figures  supplied  in  the  inclosed  statements  are  taken  from  the  books  of  the 
New  Orleans  Cotton  Exchange,  the  files  of  the  Lumber  Trade  Journal,  files  of  the 
rate  sheets  issued  by  the  Texas  Transport  &  Terminal  Co.,  A.  H.  Clement  &  Co., 
Ross  &  Heyn,  and  George  Gerdes  &  Co.,  supplemented  by  figures  taken  from  the 
actual  manifests  of  the  Ley  land,  Vogemann,  Head,  Pinillos,  Gans,  Norway-Mexico 
Gulf,  Swedish-American-Mexico,  Maclay-Prentice  Co.,  and  Pierce  Cotoniera  lines. 

1  am  gi'v'ing  on  these  sheets  the  rates  as  quoted  in  the  various  sources  of  information, 
with  footnotes  indicating  any  variation  in  the  unit  of  quantity.  It  would  be  mis- 
leading to  the  compiler  of  any  report  from  this  data  for  me  to  make  any  attempt  at 
reducing  these  rates  to  a  common  basis.  The  fluctuation  in  sterling  exchange  has 
forced  a  good  many  changes  in  the  methods  of  quoting  during  the  last  six  months.  For 
example,  the  cottonseed  oil  rate,  has  ordinarily  been  quoted  in  sliillings  per  barrel, 
but  since  the  1st  of  October  a  number  of  lines  have  changed  their  quotations  to 
cents  per  hundred  pounds  to  avoid  the  uncertainty  of  exchange  fluctuations.  To 
bring  the  shilling  rates  down  to  a  dollar  and  cents  iDasis  due  consideration  must  be 
given  to  the  various  exchange  rates  ruling  at  the  time  these  quotations  were  made. 
In  other  cases  the  unit  of  quantity  on  wliich  quotation  is  made  has  been  changed. 
For  instance,  pine  quotations  are  in  some  cases  in  shillings  per  standard  and  in  otliera 
in  dollars  per  thousand  feet.  This  can  readily  be  brought  down  to  a  common  unit 
of  quantity,  but  I  believe  such  conversion  should  be  done  by  the  person  making 
use  of  the  figures  rather  than  by  the  compiler  of  these  charts,  as  he  will  then  know 
exactly  what  has  been  done. 
Yours,  very  truly, 

E.  E.  JUDD, 

Commercial  Agent  in  Charge. 

Another  communication  from  the  commercial  agent  in  charge  of 
the  New  Orleans  district  office  of  the  Bureau  of  Foreign  and  Domestic 
Commerce  may  also  be  of  interest  in  connection  with  the  sliipping 
situation  at  the  Gulf  ports.  This  letter  was  in  answer  to  a  request 
from  the  bureau  that  the  agent  look  into  the  possibilities  of  securing 
a  vessel  for  the  movement  of  mahogany  from  Central  America  to 
New  Orleans  for  a  large  plant  in  Cincinnati : 

New  Orleans,  March  8,  1916. 

I  have  your  letter  of  March  6,  dictated  by  Commercial  Agent  Jones,  inclosing  copy 
of  a  letter  from  the  Freiberg  Lumber  Co.  to  the  Cincinnati  Chamber  of  Commerce, 
asking  for  advice  as  to  the  conditions  in  shipping  between  Central  America  and  the 
Gulf  ports.  I  can, say,  in  general,  that  charters  for  Central  American  business  have 
been  practically  unobtainable  for  the  past  several  months,  charter  rates  being  way 
above  what  this  traffic  can  bear.  Steamers  are  absolutely  out  of  the  question,  as  they 
have  all  gone  into  th-e  European  trade  with  the  exception  of  the  regular  line  vessels 
carrying  general  cargo  down  and  bringing  bananas  and  other  fruit  back.  There  have 
been  a  few  small  sailing  vessels  on  the  market  from  time  to  time  at  high  rates.  The 
regular  liners  are  not  available  for  mahogany  business  as  they  will  accept  such  cargo 
only  in  small  quantities  and  at  their  regular  shipping  points.  Most  of  the  mahogany 
is  loaded  at  small  ports  not  regularly  touched  by  these  ships. 

The  abnormal  prices  asked  for  tonnage  in  the  Central  American  trade  are  only  a 
logical  result  of  the  European  situation.  With  cotton  rates  at  $2.90  per  hundred 
pounds  to  Liverpool,  |3.15  to  Havre,  $3  to  Barcelona,  and  $3.60  to  Gothenberg,  and 


800      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

pig  iron  bringing  $25  a  ton,  it  is  only  natural  that  shipowners  have  thrown  their  ves- 
sels into  the  European  trade.  Shippers  to  Europe  are  literally  begging  for  space  at 
these  prices.  There  has  been  a  great  deal  of  speculating  in  tonnage,  but  the  rates 
are  traceable  directly  to  the  enormous  outbound  traffic.  I  just  heard  to-day  of  one 
speculator  who  paid  170  shillings  per  dead-weight  ton  for  a  vessel  with  a  capacity  of 
sixteen  to  eighteen  hundred  tons.  The  market  has  dropped  a  little  since  then,  so 
that  the  ship  is  only  worth  about  140  shillings  now.  This  man  stands  to  lose  several 
thousand  dollars  on  the  venture  in  spite  of  the  high  rates  prevailing. 

I  am  going  further  into  this  subject  in  the  next  day  or  so  and  will  report  if  I  find 
anything  further  of  interest.  I  shall  also  do  a  little  scouting  around  in  shipping 
circles  here  and  see  if  I  can't  pick  up  something  for  the  Freiberg  Co.  I  think  I  know 
where  there  is  an  1,800-ton  sailing  vessel  which  might  be  glad  to  make  a  contract  for 
mahogany  business. 

Very  truly,  youi-s, 

E.  E.  JUDD, 

Commercial  Agent  in  Charge. 

P.  S. — In  talking  over  the  shipping  situation  with  Mr.  De  Witt  to-day  I  mentioned 
that  a  mahogany  company  wanted  a  2,000-ton  steamer.  He  said  if  he  could  find  any 
such  craft  he  would  like  to  buy  three  of  them  at  a  good,  fat  figure,  and  pay  a  fine 
commission  to  the  wizard  who  produced  them.  He  said,  ''I  don't  care  about  age, 
beauty,  or  flag  if  they  will  float  and  can  sail  without  danger  of  being  shot  to  pieces. 
And  I  can  load  them  with  something  more  profitable  than  mahogany." 

E.E.J. 

Ocean  freight  rates  from  Nevj  Orleans  to  European  ports. 
COTTON  (COMPRESSED),  PER  100  POUNDS. 


Port  of  destination. 


British  ports: 

London 

I-ivcrpool 

Manchester 

Glasgow 

Dublin 

Belfast 

Scandinavian  ports 

Gothenburg... 

Christiania 

Dutch  ports: 

Amsterdam 

Rotterdam 

Havre.  France 

Barcelona,  Spain.. 
Italian  ports: 

Genoa 

Naples 


1914 


Jan.  1.    Apr.  1.   July  1.    Oct.  1 


$0.48 
.31 
.38 
.34 

.48 
.48 

.63 
.53 

.40 
.36 

.38 

.60 

.45 
.47J 


SO.  30 
.33 
.38 
.38 
.38 


.43    i 
.43     ' 

.32 
.34     I 

.34     i 

.40 

.40    I 
.42J 


$0.28 
.31 
.35 
.35 
.35 

.40 
.40 


.27 
.28 

.35 

.40 

.38 
.40i 


$0.50 
.50 
.45 


.45 


.85 

.72 
.35 

.50 

.85 

.60 
.72J 


1915 


Jan.  1.    Apr.  1.   July  1.    Oct.  1 


$L15 
1.00 
1.00 
.65 


.65 


$L40 
1.60 
1.15 


$1.00 
1.10 
1.25 


fL20     \ 
\  2.00     / 

2.52 

2.50 
/  1.20 
\  1.35 

1.40 

1.35 
1.52§ 


2.25 
2.25 

2.17 
2.15 

1.55 

L40 

1.75 
1.75 


1.75 
1.75 

1.52 
1.50 

1.20 

1.40 

1.25 
1.25 


$1.10 
1.15 


L75 
1.75 

2.02 
2.00 

L60 

1.50 

L75 
1.75 


1916, 
Jan.  1. 


$3.00 


2.25 


2.75 
2.75 

2.77 
2.75 

2.50 

2.00 

2.25 
2.30 


COTTONSEED  OIL,  PER  BARREL  OF  450  POUNDS. 


British  ports: 

$1.22 
1.35 
1.53 
1.35 

L70 
L70 

$1.22 
1.26 
1.30 
1.26 

L70 
L70 

$1.10 
1.17 
1  22 
L17 

L70 
L70 

LIO 
.97 
1.40 
1.64 

$4.87 
L40 

$2.43 
3.60 
3.69 
3.60 

8.52 
4.26 

V'4."3i' 
3.89 
4.87 

$2.92 
3.60 
3.69 
3.60 

5.40 

6.04 
5.85 
4.73 
5.40 

$2.03 

$2.93 
3  02 
2.93 

6.33 
8.52 

4.99 
4.87 
4.87 
5.84 

$5.40 

Dublin  

5.e3 

Belfast 

Scandinavian  ports: 

Gothenburg 

Christiania 

Dutch  ports: 

AmstiTdam 

L62 

2.03 

5.40 
8.55 

L58 

1.95 
1.83 
1.46 
2.19 

7.30 

4.38 
4.26 
2.92 
3.65 

5.63 
7.29* 

Rottf  rdam 

1.46 
L4fi 
L70 

1.46 
L46 
1.64 

7.20 

12.  (» 

Genoa,  Italy 

6.53 

SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      801 

Ocean  freight  rales  from  New  Orleans  to  European  ports — Continued. 
COTTONSEED  CAKE,  PER  LONG  TON. 


Port  of  destination. 

1914 

1915 

1916, 

Jan.  1. 

Apr.  1. 

July  1. 

Oct.  1. 

Jan.  1. 

Apr.  1. 

July  1. 

Oct.  1. 

Jan.  1. 

British  ports: 

Li\  erpool 

$3.65 
3.65 
4.62 
5.11 
4.62 

5.11 

4.87 

3.89 
3.65 
4.02 
5.35 

$2.92 
2.92 
4.14 
4.38 
4.14 

3.89 
3.89 

3.65 
3.41 
3.77 
5.35 

$2.43 
2.43 
3.89 
4.14 
3.89 

3.89 
3.89 

3.29 
3.04 
3.16 
5.35 

$10.34 

$10.34 
10.34 
13.39 
13.87 
13.39 

14.60 
14.60 

14.83 
14.60 
12.17 
14.60 

$12. 17 
10.95 
14.60 
15.09 
14.60 

15.68 
15.68 

22.85 
22.40 
16.80 
18.37 

G  lasfTow 

$6.08 

8. 03 

$12. 17 
12.66 
12.17 

18.25 
15.82 

19.96 
19.70 
17.03 
20.08 

$21.90 

PuMin 

22.39 

Belfast 

6.08 

8.03 

2L90 

Scandinavian  ports: 

33.60 

33.60 

Dutch  ports: 

6.33 
6.08 
5.35 
7.30 

14.83 
14.60 
11.31 
10.95 

28.45 

Rotterdam     

28.00 

Havre  France 

33.60 

Genoa,  Italy 

30.24 

WHEAT,  PER  BUSHEL  OF  60  POUNDS. 


British  ports: 

Liverpool 

Manchester 

Glasgow....' 

Scandinavian  ports: 

Gothenburg 

Christiania 


.07 
.07 
.101 

.101 
.101 


$0,061 
.066 
.101 

.091 
.091 


$0. 061 
.061 


.087 
.084 


.061 
.132 
.091 


$0. 152 
.233 


$0,264 
.264 


.213 


$0,365 
.365 


$0,243 
'  '.'35" 


FLOUR,  PER  100  POUNDS. 


TOBACCO,  PER  100  POUNDS. 


British  ports: 

Liverpool 

Glasgow 

Belfast 

Christiania,  Norway 

Dutch  ports: 

Amsterdam 

Rotterdam i      .48 

Havre,  France .48 

Genoa,  Italy .50 


$0,415 

.48 
.49 

.50 


$0. 425 
.415 


.50 
.48 
.48 
.43 


$0,455 
.45 
.45 
.70 

.50 
.48 
.43 
.43 


$0. 465 
.60 
.60 
.75 

.72 
.70 
.50 
.63 


$0.70 
.70 
L25 

2.57 
2.55 
1.40 
1.55 


$1.15 
1.50 
1.50 
2.50 

2.12 
2.10 
1.62 
1.80 


$1. 15 
1.00 


2.00 

L77 
1.75 
1.40 
1.30 


$1.15 


2.00 

2.02 
2.00 
1.60 
1.80 


MEAT   PRODUCTS,  PER  100  POUNDS. 


British  ports: 

Glasgow 

Belfast 

Dutch  ports: 
Amsterdam 
Rotterdam . 

Havre,  France.. 

Genoa,  Italy 


$0.35 
.35 

.36 
.35 
.33 
.36 


$0.31 
.30 
.33 
.34 


$0.45 
.45 

.97 
.95 
.70 
.82 


$0.70 
.70 

1.77 
1.75 
1.10 
1.30 


$1.02 
1.00 
.90 
1.10 


$0.80 


1.32 
1.30 
1.10 
1.20 


$0,548 


.589 
.589 


British  ports:               ^. 

^.20 
.25 
.26 
.25 

.26 
.26 

.21 
.20 
.22 
.24 

$0.18 
.20 
.21 
.20 

.23 
.23 

.18 
.17 
.19 
.22 

$0.18 
.20 
.21 
.20 

.23 
.23 

.17 

.16 
.18 
.22 

'"$6."  28' 

$0.23 
.35 

$0.40 
.45 
.47 
.45 

.75 
.75 

.88 
.87 
.75 

.85 

$0.55 
.60 
.61 
.60 

.61 
.61 

.53 
.52 
.55 
.62 

$0.55 
.60 
.61 
.60 

.70 
.70 

.70 
.69 

.75 
.82 

$1.01 

Dublin 

1.06 

Belfast          

.28 

.35 

LOl 

Scandinavian  ports: 

1.25 

.35 

.29 

.28 
.24 
.30 

.60 

.63 
.62 
.50 
.56 

L25 

Dutch  ports: 

A  msterdam 

Lll 

LIO 

L50 

1.35 

$3.00 

3.01 
3.00 
2.50 
2.35 


$1.52 
1.50 
2.75 
1.50 


802      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


Ocean  freight  rates  from  Neiv  Orleans  to  European  ports — Continued. 
LUMBER  (SOFT),  PER  2,000  FEET. 


1914 

1915 

1916, 

Jan.  1. 

Apr.  1. 

July  1. 

Oct.  1. 

Jan.  1. 

Apr-  1. 

July  1. 

Oct.  1. 

Jan.  1. 

British  ports: 

$19.47 
19.47 
24.00 
24.00 
27.00 

18.86 
/  17.03 
\  19.47 
23.00 
24.00 
21.90 
32.00 

$15.82 
15.82 
20.00 
20.00 
24.33 

15.82 

1  14.00 

17.03 
20.00 
18.25 
32.00 

$14.60 
14.60 
13.00 
16.00 
19.47 

13.39 

12.78 

14.60 
14.00 
17.64 
32.00 

$21.90 

838.93 

$41.37 
41.37 
U.56 

52.32 

48.67 

66.91 
34.00 
73.00 
66.00 

$54.75 

20.66 
24.00 

132.00 
32.00 

50.00 
50.00 
43.80 

79.84 

75.43 

75.43 
34.00 
97.30 

48.67 
60.00 
49.00 

158.00 
150.00 

140.00 
40.00 

160.00 
66.00 

$24.33 

Belfast 

Christiania,  Norway 

Dutch  ports: 

28.22 

28.11 

24.33 
14.00 
24.33 

76.65 

73.00 

46.23 
24.00 
54.75 

188.00 

180.00 

230.00 

50.00 

200.00 

Buenos  Aires,  Argentina 

1 

LUMBER  (HARD),  PER  100  POUNDS. 


Manchester. 

Glascow 

Dulilin 

Belfast 

Scandinavian  ports: 

Gothenburg 

Christiania 

Dutch  ports: 

Amsterdam 

Rotterdam 

Havre ,  France 

Genoa,  Italy 


British  ports: 

Liverpool $0.28 

.30 
.30 
.34 
.30 

.40 
.40 

.32 

.28 
.33 
.36 


$0.25 
.25 
.28 
.29 
.28 

.40 
.40 

.26 
.24 
.26 
.34 


$0.23 

$0.30 

$1.50 

$0.70 

$0.80 

.23 

.45 

$0.50 

.70 

.75 

.26 

.30 

.45 

.65 

.80 

.80 

.29 

.37 

.67 

.82 

.81 

.28 

.34 

.45 

.65 

.80 

.80 

.35 

.50 

1.60 

.95 

.90 

.35 

.50 

1.50 

.95 

.90 

.22 

.40 

.97 

L02 

.82 

1.22 

.20 

.38 

.95 

1.00 

.80 

1.20 

.26 

.33 

.70 

1.10 

.85 

.90 

.26 

.40 

.83 

1.30 

LOO 

1.20 

$0.80 
1.20 
1.25 
1.20 

1.25 
1.25 

1.32 
1.30 
1.50 
1.40 


PIG  IRON,  PER  LONG  TON. 


British  ports: 

Glasgow 

Belfast 

Dutch  ports: 

Amsterdam. 

Rotterdam . . 
Havre,  France.., 
Genoa,  Italy 


$4.87 


2.92 
2.43 
2.43 
2.68 


$3.04 
3.04 

2.92 
2.43 
2.43 
2.43 


$3.04 
3.04 

2.43 
1.95 
2.43 
2.43 


$5.47 
5.47 


3.16 
3.65 


$6.08 
6.08 

7.79 
7.30 
4.87 
6.08 


$8.52 
8.52 

7.79 
7.30 
7.30 
8.03 


$7.30 
9.73 


$8.96 
9.75 


ROSIN,  PER  LONG  TON. 


British  ports: 

Liverpool 

Gla.'^gow 

Belfast 

Christiania,  Norway 
Dutch  ports: 

Amsterdam 

Rotterdam 

Havre ,  France 

Genoa,  Italy 


$3.41 
4.14 
4.62 
5.47 

3.77 

4.48 

3.65 

15.50 


6.33 
9.13 

5.60 

8.51 

4.87 

»7.91 


$8.76 
8.76 
12.17 

17.52 

21.28 

10.95 

1  13. 19 


$13.39 
13.39 
13.39 
30.42 

19.96 

22.40 

17.03 

122.85 


$13.39 


19.47 

16.30 

17.92 

15.82 

120.22 


$14.60 


24.64 

24.42 
26.88 
16.80 
22.40 


$24.33 


39.20 

34.05 
29.12 
49.28 
30.24 


1  Plus  5  per  cent  primage. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      803 


Ocean  Freight  Rates  to  and  from  Ports  of  the  United  Kingdom. 

The  fluctuations  in  Britit^h  ocean  freight  rates  to  and  from  the  ports  of  Great  Britain 
are  of  particular  interest  to  the  whole  world,  not  only  because  of  the  dominant  posi- 
tion of  Great  Britain  in  the  world's  carrying  trade  but  also  because  Great  Britain 
draws  its  supplies  from  ])ractically  every  corner  of  the  globe.  y  |i| 

►  The  following  comment  and  chart«:,  taken  fn  m  Appendix  X\l  of  Kirkaldy's  British 
Ship} ling:  Its  History,  Organization,  and  Importance,  throw^  considerable  light  on 
the  course  of  ocean  freight  rates  during  a  period  of  nearly  25  years: 


^{§§§85^8% 

""^  1     ""     1  v\A±\  1 !  1 '  1 1 1 1  li  r  II 

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^|a          §$«««>»«* 

freight  fluctuations. 

The  fluctuations  whi(  h  have  taken  })la(  e  hi  freights  in  different  directions  during 
the  past  30  vears  have  been  enormous,  as  has  been  evidenced  by  the  tables  compiled 
each  year  by  Messrs.  Angler  Bros.,  and  pubhshed  in  these  columns.  We  have  en- 
deavored, by  the  aid  of  these  tables  and  the  returns  pubhshed  by  the  board  of  trade 
from  time  to  time,  to  give  a  diagram  showing  the  extent  of  these  rises.  It  should  be 
mentioned,  however,  that  averages  are  deceptive,  and  that  it  is  impossible  with  the 
data  obtainable  to  secure  absolutely  reliable  figures,  but  with  the  information  at  our 


804      SHIPPING  BOAED,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 

^sposal  Y^  have  endeavored  to  make  the  comparison  as  complete  as  possible  As 
the  year  1900  is  reckoned  as  the  best  year  shipowners  have  had  for  many  years  we 
have  taken  this  year  as  a  basis,  and  show  by  percentages  the  rises  and  falls  in' the 
years  since  1884. 

tJ^l^  ^^L'^''^''T  '*  ^^}  ^^  '^?^  *^^*'  ^'  ^'^"^^d^  both  outward  and  homeward 
freights,  1889  was  the  record  year,  but  from  1884  to  1889  freights  were  good  and  did 
not  show  any  A-ery  serious  fluctuation.  From  1889  to  1895  freights  fell  to  the  extent 
of  40  per  cent  The  engineers'  strike  in  1897,  by  stopping  the  production  of  new 
shipping,  together  with  the  Spamsh-American  war  in  1898,  sent  outward  and  home- 
ward freights  up  to  91.35  per  cent  of  the  1900  standard,  and  it  was  solely  due  to  the 


demand  of  the  Bntish  Government  for  transports  for  South  Africa  that  freights  went 
up  still  higher  in  1900,  when  as  much  as  35  shillings  per  ton  gross  per  month  was  paid 
tor  tne  hinng  of  some  of  the  large  mail  and  passenger  steamers  for  the  transport  of 
•  ?P\  ui  !^  lup.hgures  for  passenger  steamers  are,  however,  not  taken  into  account 
m  the  table  for  obvious  reasons.  It  should  be  borne  in  mind  that  since  1885  the  size 
ot  steamers  engaged  in  the  cargo-carrjdng  trade  has  increased  considerably,  and  that 
vessels  owing  to  their  increased  size  and  better  dispatch,  can  now  carry  cargo  at  a 
much  lower  rate  to  leave  a  profit  than  vessels  could  do  30  vears  ago 

Ihe  high  freights  for  carrying  cargo  that  were  paid  in  1900,  however,  were  not  the 
result  ot  an  increase  in  trade  generally,  but  were  of  a  fictitious  character,  Avith  the 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE.      805 

result  when  the  transports,  etc.,  were  released  by  the  Government,  and  had  to  seek 
freights  in  their  regular  trades,  the  result  was  disastrous,  freights  falling  26  per  cent 
in  the  following  year,  and  remaining  at  an  unremunerative  level  until  September, 
1911,  when,  shipowners  having  for  some  years  refrained  from  building  to  any  large 
extent  owing  to  the  impossibility  of  profitably  employing  tonnage,  the  increased 
trade  caused  the  demand  for  steamers  to  more  than  equal  the  supply,  with  the  natural 
consequence  that  freights  were  forced  up  to  a  paying  basis.  At  that  time  it  was  fully 
anticipated  by  shipowners  generally  that  they  were  in  for  a  year  or  two  of  good 
freights,  although  nothing  of  an  extra  abnormal  character  was  anticipated.  The 
strike  in  the  Plate  caused  a  large  number  of  vessels  to  be  tied  up  there  which  were 
consequently  taken  off  the  market.  The  coal  strike  in  this  county  also  caused  a 
further  large  amount  of  tonnage  to  be  laid  idle,  while  the  transport  workers'  strike  in 
the  middle  of  the  year  further  delayed  vessels.  When  the  disputes  were  over  there 
was  a  glut  of  goods"  to  be  shifted  at  different  parts  of  the  world,  with  the  resultthat 
in  order  to  secure  vessels  the  different  markets  had  to  increase  the  rates,  and  freights 
reached  a  point  which  no  owner  in  liis  wildest  moment  had  anticipated.  For  In- 
stance, in  order  to  induce  vessels  to  go  to  the  Plate  in  ballast,  as  much  as  31  shillings 
had  to  be  paid,  which  was  directly  attributable  to  the  strike  on  this  side  tying  tonnage 
up.  The  threatened  closing  of  the  Dardanelles  was  the  final  spurt,  as  much  as  27 
shillings  being  paid  to  induce  owners  to  take  the  risk  of  loading  in  the  Black  Sea. 
It  was  generally  recognized  that  the  spurt  in  the  autumn  was  more  or  less  fictitious 
and  would  not  last,  and  therefore  the  fall  in  freights  which  took  place  a  month  or  so 
ago  was  not  altogether  unexpected.  The  sudden  drop  in  Black  Sea  rates  from  27  to 
12  shillings  caused  other  markets  to  fall  in  sympathy,  but  rates  are  still  of  a  rernuner- 
ative  character,  and  it  is  generally  believed  that  shipowners  will  have  nothing  to 
complain  of  for  some  time  to  come  in  the  rates  of  freight  they  will  be  able  to  obtain. 
As  showing  the  freight  fluctuations  which  have  taken  pbcc  during  the  period  from 
1892  to  1912,  we  give,  in  the  appended  folding  sheets,  further  diagrams  showing  the 
highest  and  lowest  rates  in  the  homeward  trade  from  Odessa  and  the  highest  and  low- 
est rates  from  Wales  to  Genoa. 

Freight  Rates  on  Coal  from  British  Ports  in  the  Years  1909  to  1916,  Inclusive. 

[Cardiff  and  South  "Wales  Journal  of  Commerce  Industrial  Review,  1916.] 

HOMEWARD  FREIGHTS  IN  1915 — KEEN  COMPETITION  FOR   TONNAGE — ABNORMALLY   HIGH 

RATES   SECURED. 

The  year  1915  has  without  doubt  proved  absolutely  phenomenal  so  far  as  homeward 
freight  rates  are  concerned.  Generally,  right  through  the  whole  of  the  period,  ratos  of 
freight  have  been  very  forcibly  and  continually  advanced,  w'ith  the  exception  of  one 
or  two  slight  setbacks  of  a  t'?'mporarj'-  nature.'  The  fact  that  a  large  amount  of  the 
world's  mercantile  marine,  such  as  that  owned  by  Germany  and  Austria,  having  been 
of  necessity  withdrawn  from  trading  on  the  high  seas  is,  of  course,  in  a  considerable 
measure  responsible  for  the  enormous  freights  paid,  but  the  main  caus'^  is  undoubtedly 
to  be  found  in  the  fact  that  the  liuilding  of  mercantile  tonnage  had  practically  ceased 
for  the  time  being,  in  consequence  of  the  requirements  of  more  urgent  national  impor- 
tance. A  further,  and  certainly  not  an  unimportant  cause,  was  the  withdrawal  of  a 
large  proportion  of  tonnage  frorn  the  world's  market  by  requisition  (stated  by  the  first 
lord  of  the  admiralty  in  the  House  of  Commons  to  be  equal  to  three  times  the  German 
mercantile  marine)  to  cope  with  the  government  demands,  with  the  result  that  the 
amount  of  available  tonnage  left  free  fo"r  the  world's  trade  was  so  utterly  incomparative 
to  the  demand  that  charterers  were  by  dire  necessity  compelled  to  compete  most 
strongly  in  order  to  secure  tonnage  to  carry  out  their  contracts.  Another  important 
factor  on  the  question  of  the  scarcity  of  tonnage  is  that  in  normal  times  a  large  pro- 
portion of  grain  imported  into  the  United  Ivingdom,  France,  and  Italy,  etc.,  came 
from  the  Eussian  Black  Sea  ports,  which  only  entailed  comparatively  short  voyages, 
whereas  st^^amers  have  been  compelled  to  make  throughout  1915  considerably  longer 
voyages,  principally  from  North  America,  Argentina,  and  India,  to  bring  the  requisite 
grain  to  Great  Britain  and  allied  countries. 

THE   PIVOT   OF  THE    MARKET. 

An  interesting  point  to  note  is  that  whereas  the  Black  Sea  market  usually  in  normal 
times  acts  as  a  barometer  to  the  various  other  homeward  markets,  the  River  Plate  has 
been  the  pivot,  governing  to  a  large  extent  the  whole  of  the  markets  duiing  the  period 
in  question,  and  therefore  the  greatest  attention  of  operators  has  been  attracted  to  this 


806      SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MERCHANJ    MARINE. 

particular  market.  In  summing  up  the  trend  of  the  markets  generally  it  is  only  really 
possible  to  take  into  consideration  the  lowest  rates  of  freight,  viz,  at  the  beginning 
of  the  year,  and  compare  them  with  the  liighest  rates.  An  important  point,  which  in 
justice  to  sliipowners,  must  not  be  overlooked,  is  the  predominatir g  fact  that  a  large 
discount  from  the  high  rates  of  freight  must  be  made — workirg  expenses  having 
increased  exceedingly,  such  as  insurance,  wages,  and,  most  important  of  all,  unpre- 
cedented delays  in  discharging  at  various  United  Kingdom  and  allied  ports,  steamers 
frequently  lying  idle  for  a  month  or  more,  particularly  in  the  United  Kingdom, 
Liverpool  being  a  striking  instance  about  April  last,  also  west  Italian  ports  recently, 
and  cases  are  not  by  any  means  infrequent  where  owners  were  without  any  redress 
whatever  in  the  way  of  obtaining  demun-age. 

THE   RIVER   PLATE   MARKET.. 

To  deal  with  the  River  Plate  market  first,  the  opening  of  the  year  saw  60  shillings 
paid  from  not  above  San  Lorenzo  to  United  Kingdom  for  prompt  tonnage,  but  at  this 
time  owners  who  operated  ahead  were  compelled  to  accept  an  appreciable  reduction, 
viz,  50  shillings  lor  February  loading  steamers,  45  shillii  gs  to  46  sliilUrgs  3  pence  for 
March,  and  as  low  as  41  shillings  3  pence  was  taken  for  a  steamer  to  load  as  late  as 
April.  Rates,  however,  for  early  part  of  the  year  continued  to  steadily  creep  up  to 
the  neighborhood  of  75  shillings  in  April  and  May  for  steamers  then  prompt,  but  a 
setback  followed,  bringing  the  rates  down  to  the  neighborhood  of  42  sliilUngs  6  pence 
to  45  sliillings  by  the  end  of  June.  This  setback  proved  purely  a  temporary  lull  in 
consequence  of  a  diminished  demand  for  maize,  and  another  great  advance  qiiickly 
set  in  until  the  rapid  increase,  which  has  since  been  of  almost  daily  occurrence,  has 
with  the  close  of  the  year  crept  up  to  the  unprecedented  rate  of  122  shillings  6  pence. 
Notwithstanding  this  figure,  however,  merchants  now  remain  faced  with  the  important 
fact  that  available  tonnage  is  so  extremely  scarce  as  to  almost  prevent  them  taking  the 
risk  of  concluding  the  sale  of  cargoes  without  first  having  tonnage  in  hand  by  which  to 
cover  their  probable  requirements,  which  naturally  places  an  inevitable  restriction 
on  operations,  resulting  in  practically  a  hand  to  mouth  trade. 


Buenos  Aires  or  La  Plata  to  Northern  States 

Kosario  to  United  Kingdom 

San  Lorenzo  to — 

Spanish  Mediterranean  ports 

United  Kingdom 

West  Italy :      125 

Nitrate  ports  to — 

Mediterranean 

United  Kingdom  and  Continent 


1915 

Highest. 

Lowest. 

s.     d. 
61    0 
123    0 

«.  i. 
35  0 
50    6 

122    6 
122    6 
125    0 

43  0 

44  3 
55    0 

90    0 
120    0 

82  6 
60    0 

UNITED   STATES    SECTION. 

The  United  States  market  has  doubtless  seen  the  largest  amount  of  actual  trading 
compared  with  any  other  particular  section,  and  a  huge  business  has  been  transacted, 
mostly  for  oats,  wheat,  barley,  coals,  cotton,  etc.  In  the  early  part  of  the  year  rates 
current  were  northern  range,  6  shillings  6  pence  per  quarter  for  oats  to  the  i  rench 
Atlantic  ports,  while  at  the  end  of  the  year  the  value  was  13  shillings  6  pence,  an 
increase  of  over  100  per  cent.  To  west  Italy  10  shillings  6  pence  per  quarter,  heavy- 
grain,  and  8  shillings  3  pence  for  oats  were  the  rates  accepted  in  January,  against 
20  shillings  6  pence  to  21  shillings,  heavy  grain,  and  15  shillings  the  respective  values 
in  December.  1  or  cotton  on  form  "O"  from  the  Gulf  to  ^  iverpool  100  shillings  per 
net  register  ton  for  about  145  feet  measurement  was  paid  during  January,  against 
185  shillings  for  similar  measurement  in  December,  and  to  the  Mediterranean  120 
shillings  was  paid  for  January  and  February  loading,  against  260  to  270  shillings  in 
the  last  month  of  the  year. 


SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND  MEECHANT  MARINE.     807 


Northern  range  ports  to — 

Rio  de  Janeiro 

Ri\er  I'late  (lower  ports) 

United  Kingdom 

Gulf  of  Mexico  to— 

Havre 

Liverpool 

Spani -h  Mediterranean 

United  Kingdom 

San  Francisco  to  United  Kingdom  and  Continent 


1915 


Highest. 


s.  d. 

40  9 

52  6 

13  3 

190  0 

170  0 

24  0 

15  0 

105  0 


Lowest. 


s.  d. 

37  0 

31  0 

11  9 

12010 

95    0 

9    3 

8    6 

45  iO 


EASTERN   BUSINESS. 

The  advance  in  rates  in  the  eastern  market  was,  if  anythicg,  even  more  marked 
than  otlier  directions,  in  consequence  of  the  fact  that  at  the  opecirg  of  the  year  the 
demand  in  this  market  was  incomparative  with  that  of  other  directions,  and  it  became 
a  common  occurrence  for  steamers  at  the  close  of  last  year  to  proceed  from  Indian 
ports  to  the  River  Plate  in  ballast,  owners  findirg  that  notwithstandirg  the  long 
ballast  passage  the  rate  from  the  latter  quarter  showed  remunerative  advantages. 
Therefore,  during  January  and  February  business  from  the  East  was  confined  witliin 
a  very  narrow  margin.  Bombay  dealt  in  tonnage  for  February  and  March  loading  on 
the  basis  of  37  shilUrgs  6  pence"  dead-weight,  to  United  Kingdom  in  December,  how- 
ever, 111  sliillings  3  pence  was  paid  for  a  similar  voyage,  a  fact  which  displays  a  fairly 
accurate  idea  as  to  the  comparative  ad^-ance  in  rates.  From  Karaclii,  however, 
operations  were  practically  confined  to  those  of  the  Indian  wheat  committee,  which 
chartered  tonnage  for  the  surplus  amount  of  wheat  exported  from  this  country,  at  rates 
varyii  g  from  about  45  to  55  sliilUrgs  according  to  the  rise  in  rates  which  took  place 
from  this  quarter  toward  the  middle  of  the  year.  From  the  rice  ports  Rangoon  char- 
tered tonnage  at  33  shillirgs  6  pence  to  Liverpool,  compared  with  127  sliillirgs  6  pence 
from  Burmah  to  the  United  Kirgdom  in  December;  wliile  Saigon  secured  tonnage  for 
February  and  March  at  36  shillings  3  pence  to  French  ports,  whereas  130  shillings  was 
paid  in  the  closing  month  of  1915.  Vladivostok  obtained  tonnage  for  February  loading 
at  42  shilUngs  6  pence  Hull,  but  merchants  in  December  were  confronted  with  the 
important  factor  of  an  almost  entire  scarcity  of  available  tonnage,  notwithstanding 
that  110  sliillirgs  was  obtainable.  Therefore  the  percentage  of  the  increased  rates 
from  tliis  quarter  to  the  close  of  the  year  compared  with  the  state  of  the  market  at  the 
opening  of  the  period  is  probably  the  most  marked  in  any  direction. 


1915 


Highest. 


Lowest. 


Aden  to  Calcutta 

Calcutta  to  Colombo 

Madras  coast  to — 

Marseille  (net) 

Marseille  f  less  commission) 

Mauritius  to  United  Kingdom 

Saigon  to — 

France 

Liverpool 

Vladivostok  to  United  Kingdom  and  Continent 


Rupees. 
20 
15 
s.  d. 
145  0 
120  0 
105    0 

130  0 
76  3 
87    6 


Rupees. 

13 

7 

s.  d. 

57    6 

55    0 

70    0 

70  0 
65  0 
42    « 


MEDITERRANEAN   OPERATIONS. 

The  Mediterranean  market  has  not  shown  a  proportionate  advance  compared  with 
other  directions.  As  an  instance,  Alexandria  was  paying  25  shillings,  London  or  Hull, 
during  January  and  February,  whereas  the  rate  throughout  the  whole  of  the  year 
only  advanced  to  47  shillings  6  pence.  From  the  mineral  ports,  particularly  South 
Spain,  6  shillings  6  pence  to  7  shillings  was  freely  paid  to  Cardiff  for  January,  whereas 
13  shillings  was  frequently  done  during  the  last  quarter  of  the  year  to  the  same  destina- 
tion; and  to  Glasgow  tonnage  was  obtained  at  7  shillings  9  pence  for  January,  whereas 
17  shillings  to  17  shillings  3  pence  was  the  rate  freely  procured  in  December.     The 


808      SHIPPING  BOAKD,  NAVAL  AUXILIARY,  AND  MERCHANT  MARINE. 


Bay  ports  varietl  considerably  at  the  opening  of  the  year,  the  rate  then  obtainable 
being  12  shillings  6  pence  to  Middlesborough.  The  rate,  however,  steadily  advanced 
to  18  shillings,  but  a  setback  from  this  quarter  was  noticeable  toward  the  end  of  Feb- 
ruary to  early  March,  when  15  shillings  3  pence  to  15  sliillings  4^  pence  was  the  ut- 
most obtainalde,  and  by  April  the  rate  had  dropped  to  13  shillings;  by  June  and  July 
10  shiUings  6  pence  to  10  shillings  9  pence  was  all  that  could  be  obtained.  TMs  was 
undoubtedly  accounted  for  by  the  fact  that  a  large  amount  of  tonnage  on  requisition 
was  released  with  the  proviso  that  the  owners  should  bring  a  cargo  of  ore  home,  but 
shortly  afterwards  tonnage  again  gradually  grew  scarcer,  and  by  the  middle  of  October 
17  shillings  was  reached;  while  by  the  middle  of  December  21  shillings  to  21  shillings 
6  pence  was  freelv  bidding  and  paid  to  the  few  steamers  then  available.  Rates  to 
other  destinations  "from  BlU^ao  varied  proportionately  at  the  opening  of  the  year,  7  shil- 
Ungs,  Newport,  being  the  value  at  that  time,  whereas,  for  the  middle  of  December, 
17  shillings  3  pence  was  freely  paid  to  Newport  River. 


Marbella  to  West  Hartlepool 

Oporto  to  Cardiff,  Barry,  or  Xewport 

Porman  to  Tees 

Sagunto  to— 

Glasgow 

Kewport 

Sfax  to  Nantes  or  La  Pallice 


BALTIC   AND   WHITE   SEA   MARKETS. 

In  the  Baltic  and  White  Sea  section,  although  business  reported  during  the  past 
12  months  was  by  no  means  large  compared  with  other  markets,  which  is  accounted 
for  by  the  fact  that  a  good  number  of  timber  freights  from  this  direction  were  covered 
by  steamers  taken  up  on  time-charter  basis,  in  addition  to  which  there  were,  of  course, 
a  number  of  restrictions  in  force  operating  against  steamers  entertaining  this  class  of 
business,  the  principal  being  war  risks,  and  rates  consequently  have  ruled  firm  through- 
out the  season.  The  greatest  rise  apparent  was  from  Skutskar  to  London,  rates  having 
advanced  from  70  shillings  to  143  shillings  6  pence,  paid  late  in  the  season. 


SkeUeftea  to  HuU 

Skutskar  to  London 

Soderhamn  to  London . . 

Siindswall  to — 

Ayr  or  Aberdeen 

East  Coast  coal  port 
London 


Highest. 

Lowest. 

s.   d. 
100    0 
143    6 

95    0 

s.  d. 
85  0 
70  0 
70    0 

80  0 

81  6 
128    0 

67  6 
77  6 
70    0 

TIME-CHARTER   RATES. 

Rates  on  time-charter  basis  have  varied  considerably  throughout  the  year — 9 
shillings  6  pence  to  10  shillings  on  the  dead-weight  for  a  period  of  12  months,  Irans- 
Atlantic  trading  being  the  value  during  January  and  February,  but  the  advance 
which  took  place  on  the  ordinary  freight  basis  had  the  effect  of  bringing  an  almost 
daily  rise  into  steamers'  values  on  time  charter,  and  by  April  12  shillings  6  pence  was 
freely  paid,  particularly  for  Italian  charterers  for  a  similar  period,  and  by  October 
17  shillings  6  pence  was  reached,  and  by  the  close  of  the  year  tonnage  had  become 
80  scarce  as  to  force  the  rate  to  25  shillings  for  British  vesvsels,  whereas  tonnage  under 
neutral  flags  were  much  more  valuable  during  the  closing  months  of  the  >ear,  in 
consequence  of  restrictions  in  the  trading  limits  of  British  steamers — an  orderin 
council  having  been  issued  in  November  prohibiting  British  vessels  from  trading 
between  one  foreign  port  and  another  foreign  port  as  from  December  1,  1915 — and 
consequently  large  Norwegian  tonnage  commanded  as  much  as  30  shillings  for  12 
months  trans-Atlantic  trading. 


SHIPPING    BOAED,  NAVAL   AUXILIAKl ,  AND    MERCHANT    MARINE. 


809 


Time  charter. 


Australian  trade 

Continental  trade 

Trans-Atlantic  (delivery  Northern  States) 

Trans-Atlantic  (delivery  United  Kinf^dom  and  Continent) . . 
White  Sea  trade  (delivery  and  redelivery,  United  Kingdom) 


TYNE   COAL   FREIGHTS   IN    1915 — EXTRAORDINARY   RATES   PAID. 

Rates  of  freight  paid  to  shipping  from  the  Tyne  during  1915  reached  unprecedented 
levels.  In  the  first  half  of  the  yeai-  rates  from  this  district  were  comparatively  much 
more  remunerative  than  those  obtainable  in  other  markets,  owing  to  the  extra  risks 
which  ships  had  to  run  as  a  consequence  of  this  part  of  the  coast  having  been  thickly 
strewn  with  mines  by  the  Germans.  The  risk  of  encountering  enemy  warcraft  also 
had  the  eff.^ct  of  keeping  tonnage  away  from  the  district,  with  the  result  that  mer- 
chants requiring  boats  had  to  pay  extraordinary  high  rates,  Algiers  during  January 
averaging  28  shillings  5  pence,  Bordeaux  26  shillings  1  pence,  Calais  19  shillings  lOJ 
pence,  Genoa  35  shillings,  Havre  17  shillings  dk  pence,  Port  Said  28  shillings  8  pence, 
and  St.  Nazaire  26  shillings  7i  pence.  In  February  the  demand  was  very  brisk  and 
rates  materially  hardened,  Algiers  averaging  29  shillings  9  pence,  Genoa  39  shillings 
7  pence,  Havre  19  shillings  2  pence,  London  12  shillings  5  pence,  and  Port  Said  32  shill- 
ings 6  pence.  In  fact,  so  firm  was  the  market  that  the  Government  requisitioned  a 
large  number  of  detained  and  captured  enemy  vessels  and  placed  them  under  the 
management  of  two  Newcastle  owners  in  the  coasting  trade  with  instructions  that 
rates  were  not  to  be  forced  in  an  upward  direction.  These  vessels  were,  as  a  matter  of 
fact,  fixed  at  rates  much  below  those  current,  and  in  April  the  average  to  London  had 
dropped  to  7  shillings  5^  pence,  while  for  Algiers  it  worked  out  at  23  shillings  8  p'^nce, 
Genoa  35  shillings  8  pence.  Port  Said  27  shillings  6  pence,  and  St.  Nazaire  18  shillings. 
The  tonnage  placed  on  the  market  by  the  government  only  caused  a  t-^mporary  setback, 
and  after  a  couple  of  months  rates  again  moved  in  an  upward  direction.  In  June  Al- 
giers averaged  19  shillings  9  pence,  Genoa  27  shillings  11^  pence,  Las  Palmas  22  shill- 
ings 11  pence,  London  7  shillings  3f  pence,  and  St.  Nazaire  19  shillings.  At  the  close 
of  September  the  action  of  the  Greek  Government  in  ordering  Greek  vessels  to  proceed 
to  Piraeus  further  depleted  the  carrying  capacity  of  available  vessels,  and  rates  ad- 
vanced by  leaps  and  bounds,  and  before  the  close  of  the  year  eclipsed  all  previous 
records.  In  September  Algiers  averaged  27  shillings,  which  was  increased  to  32  shill- 
ings 9^  pence  in  October,  38  shillings  9  pence  in  November,  and  41  shillings  8  pence  in 
December.  Bordeaux  averaged  22  shillings  11  pence  in  September,  26  shillings  IJ 
pence  in  October,  35  shillings  9|  pence  in  November,  and  33  shillings  3J  pence  in  De- 
cember, while  Genoa  jumped  from  32  shillings  2f  pence  in  September  to  44  shillings 
7  pence  in  October,  53  shillings  lOJ  pence  in  November,  and  64  shillings  10  pence  in 
December.  London  averaged  8  shillings  7^  pence  in  September,  which  was  increased 
to  9  shillings  4\  pence  in  October,  13  shillings  7^  pence  in  November,  and  16  shillings 
4  J  pence  in  December,  while  St.  Nazaire  advanced  from  21  shillings  6  pence  in  Septem- 
ber to  24  shillings  6  pence  in  October,  and  33  shillings  6  pence  in  November.  The 
monthly  averages  to  represenative  ports  during  the  past  year  are  appended: 

Monthly  averages,  1915. 


Tyne  to— 

Month. 

Algiers. 

Bor- 
deaux. 

Calais. 

Genoa. 

Havre. 

Las 
Palmas. 

Janrary 

s.    d. 

28  5 

29  9 
25    7 
23    8 
21    7 
19    9 
18    3 
23    0 
27    0 
32    9i 
38    9 
41    8 

«.     d. 

26  1 

27  0| 

25  3 

17  6f 

18  9 

19  9J 

18  5f 

19  11 
22    11 

26  li 

35  9J 

36  Z\ 

s.     d. 
19    lOJ 

18  6 

22  10 

19  3 

15  m 

15  11 
13      9 

16  6 
18      li 
18      1 

23  6 
23      6 

s.     d. 

35  0 
39     7 

36  2 
35      8 
33      0 
27    11§ 
24    lOi 
26    111 
32      2f 
44      7 
53    lOi 
64    10 

s.     d. 

17  3| 
19     2 

14  9i 

18  7i 

15  7i 

15  64 
13      Of 
13      9i 
17      3 

16  9 
21      &h 
25    lOi 

s.     d. 
23      7 

February  

24     9 

March 

24    10 

April 

24      7 

May 

23      3f 

June 

22    11 

July 

20      3 

Ausjust 

18      7 

September 

23    11 

October 

31      1 

November        

26      6 

December 

35      5 

810       SHIPPING  BOARD,  NAVAL  AUXILIARY,  AND   MERCHANT   MARINE. 
Monthly  averages,  1915 — Continued. 


Month. 


January . . 
February. 

March 

April 


Tyne  to— 


Lisbon. 


s.  d. 

25  IJ 

25  4 

22  8 


May 22  0 

June \  19  5 

July 18  4} 

August 19  0 

September ;  23  4 

October 27  0 

November 29  8J 

December 


London. 


Port 
Said. 


Roche- 
fort. 


27 

6 

25 

0 

26 

6 

24 

5 

23 

8 

36 

10^ 

45 

5 

51 

Hi 

s.  d. 

16  3 
30  0 

17  0 
19  6 
19  7J 


18  5 

18  8 

23  7J 

25  0 

29  0 

37  8 


St.  Na- 
zaire. 


s.  d. 

26  7i 

25  4i 

24  0 

18  0 

16  0 

19  0 

17  7 
19  Oi 
21  6 
24  6 
33  6 
32  8 


LOWEST,    HIGHEST,    AND   AVERAGE    RATES   IX    1915. 

The  extraordinary  levels  whicli  freights  reached  in  1915  will  be  gathered  from  the 
following  table,  shomng  the  lowest,  highest,  and  average  rates  paid  to  representative 
ports  during  1914  and  1915: 


Tyne  to— 

1914 

1915 

Lowest. 

Highest. 

Average. 

Lowest. 

Highest. 

Average. 

Algiers 

s.    d. 

5  7J 

4  6 
3      4^ 

6  9 

3  lOJ 

6 

5  1* 
2      9" 

6  9 

4  7J 

s.   d. 
16    0 
16    6 
8    6 
22    6 
16    6 
13    6 
13    0 
12    0 
22    0 
11    3 
16    3 

s.    d. 
7    11 
7     0 
4      0} 
10    llj 

7  8i 

8  5J 
8      1 

4  6 
10      6f 

5  9i 
7    11 

f.   d. 
17    6 
15    0 
13    0 
23    0 
12-  0 
15    9 

15  3 
6    0 

23    0 

16  0 
16    0 

s.  d. 
42    0 

38  6 
26    0 
67    0 
26    6 
36    3 
35    0 
16    6 
53    9 

39  0 
38    0 

s.    d. 
26     0 

25      0} 
18      7 
37      4 

Calais 

Havre         .        

17      IJ 

Las  Palmas 

24    10 

22      9 
8    11 

Port  Said 

32      5 

23      1 

St.  Nazaire 

4      3 

23      7J 

. 

[Cardiff  and  South  Wales  Journal  of  Commerce  Industrial  Review,  1916.] 

Welsh  Coal  Freights  in  1915. 

all  previous  records  eclipsed — government  measures  to  remedy  tonnage 
scarcity — lowest,  highest,  and  average  rates — exclusive  detailed  sta- 
TISTICS. 

(On  the  pages  immediately  following  this  article  exclusiA^e  statistics  showing  the 
lowest,  highest,  and  average  rates  of  freights  to  all  ports  from  Cardiff  (including  New- 
port loading)  and  to  representative  ports  from  Swansea  are  given.] 

Shipownera  during  the  past  12  months  enjoyed  a  period  of  prosperity  never  before 
realized  in  the  annals  of  steamship  owning.  Rates  rose  to  levels  which  eVen  ahij)- 
owners  themselves  stated  were  "  unreasonable. "  Though  1914  was  a  year  of  extraordi- 
nary dislocation  to  the  shipping  industry,  on  account  of  the  commencement  of  hos- 
tilities in  the  great  war,  difficulties  of  an  unparalleled  character  arose  in  1915,  and  the 
situation  was  intensified.  In  fact,  shipowners  have  never  been  faced  with  such 
serious  and  grave  problems  as  those  encountered  during  the  past  12  months,  and  it  is 
to  the  credit  of  shipowners  generally  that  the  country  was  able  to  successfully  grapple 
with  the  crises  which  arose  at  different  periods.  Though  freight  rates  reached  levels 
previously  unthought  of,  shipowners  in  many  cases  were  prevented  from  en]'o\ang  the 
enormous  freights  obtainable  by,  in  many  cases,  having  their  vessels — or  a  proportion — 
requisitioned  by  the  admiralty  on  time  charter  rates  which  were  very  substantially 
below  those  offering  on  the  market.  Then  again,  the  fact  that  Government  measures 
were  taken  to  regulate  the  export  trade  of  3ie  United  Kindgom,  on  account  of  the 


SHIPPING   BOARD,  NAVAL   AUXILIARY,  AND   MERCHANT    MARINE.       811 

shortage  of  labor,  and  also  to  prevent  certain  commodities  getting  into  the  hands  of  the 
enemy,  created  at  different  times  situations  of  much  complexity.  '^Tiile  owners  dur- 
ing the  past  year  were  in  receipt  of  unprecedented  freights,  it  must  not  be  taken  for 
granted  that  their  profits  were  anything  like  what  might  have  been  expected  having 
regard  to  the  extraordinary  figures  which  were  paid.  The  profits  were  to  some  extent 
curtailed  by  lengthy  detentions  at  the  discharging  ports,  by  substantial  advances  in 
wages,  increased  costs  of  insurance,  stores,  and  bunker  coal,  and  also  by  the  excess 
profits  tax,  which  claimed  50  per  cent  of  the  surplus  over  the  average  profits  of  any  two 
of  the  three  years  1911,  1912,  1913,  chosen  by  the  taxpayer. 

Early  in  the  year,  in  order  to  reduce  the  liigh  level  of  freight  rates  from  the  United 
Kingdom,  the  British  Admiralty  requisitioned  interned  alien  vessels,  which  num- 
bered 73,  of  92,345  gross  tons,  and  36  captured  vessels  of  56,766  gross  tons,  for  the 
coasting  coal  trade.  These  vessels  were  placed  under  the  management  of  two  New- 
castle owners,  who  wei'e  instructed  not  to  force  rates  of  freight  up  and  also  to  fix  their 
boats  at  below  current  rates  in  order  to  reduce  rates,  particularly  to  London.  This 
scheme  certainly  for  a  time  did  cause  the  coasting  market  to  display  weakness,  but  the 
easiness  was  only  of  a  temporary  character,  and  rates  again  qiuckly  returned  to  their 
normal  course.  Toward  the  close  of  January  the  freight  market  was  appreciably 
stiffened  by  the  ItaUan  Government  requisitioning  about  200  Italian  steamers  for  the 
carriage  of  foodstuffs  and  coal  to  Italy.  In  February  the  German  submarine  "block- 
ade" of  England  was  initiated,  but  curiously  enough,  the  enemy's  futile  attempt  to 
isolate  the  British  Isles  did  not  cause  rates  of  freight  to  advance,  as  would  have  been 
only  natural  on  account  of  the  increased  risks  which  shipowners  running  to  the 
United  Kingdom  had  to  undertake.  Early  in  May  an  order  in  council  was  issued  pro- 
hibiting the  export  of  coal  from  the  United  Kingdom  to  all  neutral  countries  except 
by  Ucense.  This  order  had  a  material  effect  on  outward  coal  freights,  for  at  the  begin- 
mng  Ucenses  to  ship  were  granted  only  on  a  very  hmited  scale,  with  the  result  that  not 
nearly  so  much  tonnage  was  requii'ed  to  transport  the  coal  available  for  export.  Con- 
sequently, tonnage  for  once  being  in  excess  of  the  demand,  rates  fell  to  levels  which 
were  the  lowest  recorded  during  the  year.  However,  on  May  23,  Italy  declared  war 
on  Austria  and  joined  the  alhes,  and  on  May  26  it  was  officially  announced  that  coal 
could  be  shipped  to  Italy,  which  was  no  longer  a  neutral  country,  without  a  license. 
As  the  Italian  market  was  one  of  South  Wales's  largest  customers,  the  effect  of  this 
announcement  was  to  immediately  increase  the  demand  for  vessels,  which,  by  the 
way,  had  been  diverted  to  other  destinations  on  account  of  the  difficulty  in  obtaining 
licenses  to  ship  coal,  and  rates  again  advanced. 

WELSH   miners'    STRIKE. 

In  July  a  very  serious  state  of  affairs  was  created  by  the  action  of  the  Welsh  coal 
miners,  who  struck  work  for  a  week  in  order  to  force  their  demands  for  a  revision  of 
their  coal-field  agreement,  which  terminated  on  June  30.  That  the  miners  should 
have  taken  such  drastic  steps  duiing  a  time  when  the  country  was  engaged  in  a  war 
of  such  magnitude  will  forever  be  a  stain  on  the  patriotism  of  a  section  of  the  com- 
munity which  has  so  nobly  responded  to  the  call  of  men  for  His  Majesty's  forces. 
The  owners  had  refused  to  enter  into  negotiations  for  a  revision  of  the  coal-field  agree- 
ment on  account  of  the  fact  that  the  miners  were  already  receiving  a  17^  per  cent 
war  bonus.  Mutual  arrangements  having  failed,  the  Government  intervened,  and 
proposals  were  put  before  the  miners,  which  were  rejected,  and  the  miners  on  July 
15  ceased  work  throughout  South  Wales,  and  did  not  recommence  until  July  22,  after 
practically  all  their  demands  had  been  granted.  This  stoppage  lost  a  large  amount  of 
business  to  the  district  and  caused  vessels  to  be  diverted  to  other  ports,  while  rates, 
owing  to  the  smallness  of  the  demand,  descended  to  very  low  levels.  Early  in  August 
it  was  announced  that  coal  exports  were  prohibited  to  all  countries  except  British 
possessions  and  protectorates  without  license.  This  order  had  practically  no  effect 
on  the  freight  market,  as  by  this  time  the  coal  licensing  committee  had  got  into  thor- 
ough working  order,  and  the  new  restriction  created  little  fresh  difficulty.  Toward 
the  end  of  September  the  shipping  industry  received  a  bombshell  in  the  news  that 
the  Greek  Government  had  issued  instructions  that  all  Greek  vessels  were  to  proceed 
to  Pirpeus  at  once.  The  effect  of  this  announcement  was  to  send  up  rates  to  unprece- 
dented levels,  for  the  tonnage  shortage  was  very  acute,  and  the  withdrawal  of  the 
Greek  mercantile  marine — estimated  at  474  vessels  of  about  549,983  tons — from  the 
market  further  materially  accentuated  the  scarcity  of  vessels  which  previously  were 
much  below  those  required  to  transport  the  world's  commerce.  But  this  was  not  the 
end  of  the  new  difficulty  created,  for  a  few  days  after  news  was  received  that  an 
enormous  landslide  had  taken  place  in  the  Panama  Canal,  and  that  the  waterway 
would  not  be  navigable  until  early  in  1916.    Thus  the  world's  supply  of  tonnage 


812       SHIPPING   BOARD^  NAVAL  AUXILIARY,  AND   MERCHANT    MARINE, 

was  further  depleU-d,  as  a  largo  number  of  vessels  were  held  up  by  the  landslide, 
while  those  which  had  been  about  to  go  through  the  canal  had  to  proceed  by  the 
old  route,  which  appreciably  prolonged  the  voyage  and  further  dimini:rhed  the  carry- 
ing capacity  of  the  world's  tonnage.  At  this  time  affairs  in  the  P>alkans  had  reached 
a  crisis,  and  the  whole  world  was  waiting  to  see  on  which  side  the  Balkan  States 
would  participate  in  the  war.  On  Octol)er  12  England  broke  off  diplomatic  relations 
with  Bulgaria,  and  it  was  fully  anticipated  that  Greece  would  soon  join  in  the  war 
on  the  side  of  the  (luadruple  entente,  but  this  expectation  was  unfortunately  not 
realized.  So  acute  had  the  tonnage  scarcity  position  Ijeccme  that  on  November  11 
two  new  orders  in  council  were  issued  which  dealt  for  the  first  time  directly  with  the 
shipping  industry.  It  was  officially  announced  that  from  December  1,  1915,  all 
British  vessels  would  be  prohiVnted  from  trading  l)etween  one  foreign  port  and  another 
foreign  port,  except  by  license,  and  also  that  power  had  been  given  to  requisition 
vessels  for  the  carriage  of  necessities.  The  effect  of  this  order  was  that  vessels,  except 
those  granted  a  license,  would  upon  discharging  at  a  foreien  port  have  to  proceed 
back  to  the  United  Kingdom. 

STRIKIN'G    FREIGHT   COMPARISONS. 

During  the  last  quarter  of  1915  rates  were  at  the  highest  levels  touched  throughout 
the  whole  of  the  year,  up  to  72  shillings  6  pence  l>eing  paid  for  Al.'xandria  from  Car- 
diff, 70  francs  Algiers,  41  shillings  Barcelona.  60  shillings  Genoa,  ^'.i  shillings  tiihraltar, 
76  francs  Mars'ille,  55  shillings  Malta,  66  shillings  Naples,  and  70  shillings  Port  Said. 
The  extraordinar>'  height  which  freight  rates  n-ached  in  1015  will  be  realized  when 
it  is  borne  in  mind  that  the  top  rates  for  the  same  ports  during  1914  were:  Alexandria, 
20  shillings  7\  pfuce;  Algiers,  20  francs;  Barcelona,  17  shillings  6  pence;  Genoa,  18 
shillings;  Gil)raltar.  14  shillings;  Marsiille,  23  francs;  Malta,  18  shillings;  and  Port 
Said,  21  shillings  6  pence.  For  the  bay  and  coast  rates  also  broke  all  previous  records, 
Cardiff  to  Bordeaux  reaching  the  phenomenal  figure  of  45  francs  in  1915.  as  compared 
with  a  top  rate  of  l;i.87A  francs  in  1914,  while  Caen  was  done  at  23  shillings  against 
12  shillings;  Dieppe,  22  shillings  6  pence  against  12  shillings  6  pence;  Havre.  22  shil- 
lings against  1:}  shillings:  bi.sbon.  32  shillings  6  pence  against  12  shillings;  London, 
16  shillings  against  3  shillings  KH  pence;  Kouen,  23  shillings  against  14  shillings  6 
pence;  St.  Nazaire,  41  francs  against  14}  francs;  St.  Malo,  18  shillings  6  pence  against 
11  shillings  6  pence;  and  Trouville,  23  shillings  against  4  shillings  9  pence.  The  aver- 
age rates  also  showed  a  verv^  marked  appreciation,  Algiers,  for  instance,  averaging 
34.39.V  francs  for  the  whole  of  1915,  as  compared  with  9.21  francs  in  1914,  10.06  francs 
in  1913,  12.09  francs  in  1912,  8.53  francs  in  1911,  7.12^  francs  in  1910,  and  6.62i  francs 
in  1909.  Alexandria  averaged  36  shillings  in  1915.  against  10  shillings  3  pence,  9  shil- 
lings 10}  pence,  11  shillings  4^  pence,  7  shillings  5]  pence,  6  siiillii\gs  2}  pence,  and 
5  shillings  1 1  pence,  while  the  average  for  Barcelona  in  1915  was  2S  shillings  10}  pence, 
compared  with  9  sliillings  IJ  pence,  9  shillings  9}  pence.  11  shillings  6}  p(>nce,  8  shil- 
lings 5}  pence,  7  shillings  \  pence,  and  6  shillings  10^  pence.  Genoa  in  1915  averaged 
31  sliillings  8i  pence,  compared  with  8  sliillings  lOi  pence,  9  shillings  1  pence,  11 
shillings  7  pence,  8  shillings  1  pence,  6  shillings  8i  pence,  and  6  shillings  7*  pence, 
while  Marseille  averaged  40.09J  francs  against  10.69  francs,  10. 87^  francs,  13  francs, 
9.53  francs,  7.87^  francs,  and  7.25  francs,  while  the  average  for  Port  Said  in  1915  worked 
out  at  35  shillings  Of  pence,  against  9  sliillings  7h  pence,  9  shillings  7  pence,  11  shil- 
lings l.\  pence,  7  shillings  6  pence,  6  shillings  }  pence,  and  5  shillings  9  pence  in  the 
preceding  six  years,  respectively.  The  bay  and  coasting  section  also  advanced  in 
proportion,  Bordeaux  averaging  24.94}  francs  com])ared  with  7.17  francs,  6.90A  francs, 
8.0;i  francs,  6.53  francs  5.47^  francs,  and  5  francs,  wiiile  Dieppe  averaged  13  shillings 
2  pence,  4  shillings  4  pence,  4  sliillings  11  pence,  5  shillings  11}  pence,  4  shillings  8 
pence,  4  shillings  4h  pence,  and  4  shillings  3  pence.  Havre  averaged  14  shillings, 
against  5  shillings  H  pence,  4  shillings  lOA  pence,  5  shillings  9}  pence,  4  shillings  8J 
pence,  4  shillings  V  pence,  and  4  shillings  1  pence,  and  Lisbon  averaged  20  shillings 
10  pence  in  1915,  against  9  shillings  U  pence,  5  shillings  8A  pence,  6  shillings  7}  pence, 
4  shillings  11  pence,  5  shillings  k  pence,  and  4  shillings  11  pence,  while  the  average 
for  St.  Nazaire  worked  out  at  20.11  francs,  constrasted  with  7.62}  francs,  6.57i  francs, 
7.61  francs,  6.06  francs,  4.78  francs,  and  4.65  francs.  For  South  America  and  Brazil 
average  rates  did  not  show  such  a  marked  advance  owing  to  the  fact  that  coal  exports 
in  this  direction  were  considerably  retarded  by  the  stringency  exercised  by  the  war 
trades  de])artment  in  the  matter  oT  granting  licen.ses.  Consequently  the  demand  for 
this  direction  was  not  so  great  as  in  other  trades,  with  the  result  that  freights  did  not 
advance  in  the  same  proportion,  though  they  certainly  reached  figures  unparalleled 
in  the  history  of  steamship  owning.  Cardiff  to  Montevideo  averaged  30  shillings  6} 
pence  in  1915,  compared  with  13  shillings  6^  pence,  16  shillings  9  J  pence,  19  sliillings 


Sini'IMX(i    I5UAHD,  NAVAl.    A  U  \  1  LIAR  V,  AND    MERCHANT    MARINE.        813 

ii  peiut',  l(j  sliilliiigs  9^  peuce,  14  shillings  (i  pence,  and  iu  shillings  6  pence,  respee- 
tiyely,  in  the  previous  six  years,  while  the  average  for  Kiver  Plate  worked  out  at  30 
shillings  5  pence,  14  sliillings  U  pence,  17  shillings  8  pence,  20  shillings  8^  pence.  18 
shillings  1 J  pence,  15  shillings  3 J  pence,  and  10  shillings  34  pence,  while  the  Rio  de 
Janeiro  average  was  2!>  shillings  7  pence,  against  13  shillings  3i  pence,  16  shillings  10 
pence,  20  shillings  lA  pence,  Ki  shillings  6|  pence,  14  shillings  5^  pence,  and  10  shil- 
lings Si  pence.  Ivates  for  the  Far  Eastern  destinations,  as  was  only  to  be  expected, 
reached  extraordinaiy  levels,  and  Aden  averaged  37  shillings  9  pence  in  1915,  against 
11  sliillings  4i  pence,  12  shillings  J  pence,  12  shillings  7 J  pence,  9  shillings  lU  pence, 
8  shillings  8  pence,  and  7  shillings  6  pence,  wliile  the  average  for  Colombo'worked 
out  at  40  shillings  5  pence,  1 1  shillings  IJ  pence,  12  shillings  4  pence,  13  .shillings  4^ 
pence,  10  shillings  M  pence,  9  shillings  2f  pence,  and  7  shillings  11-^  pence.  Canary 
Islands  business  was  also  confined  witliin  comparativeh'  narrow  limits  during  the 
year,  but  the  average  for  the  past  12  months  fcr  Las  Palmas  worked  out  at  21  shillings 
11  pence,  against  7  shillings  4.\  pence,  8  shillings  7i  pence,  10  sliillings  8|  pence,' 8 
shillings  1\  pence,  7  .shillings  1^  pence,  and  G  shillings  l\  pence.  From  the  above 
figures  it  will  be  noted  that  the  average  rates  for  the  Mediterranean  during  1915 
were  about  four  times  as  much  as  the  average  to  the  ."ame  ports  in  1914,  while  for  the 
bay,  coast,  Canary  Islands,  and  eastern  ports  they  were  a])out  trebled,  and  for  the 
South  American  and  Hrazilian  destinations  doubled. 

-WERAGES  AT  THE  K.\D  OF  EACH  MONTH. 

A  Striking  illustration  of  the  enormous  ailvance  which  took  place  in  freight  rates  iu 
the  last  (J  uartcr  of  the  year  is  given  in  the  table  published  on  another  page  showing  the 
average  rates  of  freight  to  representative  ports  from  Cardiff  and  Swansea  at  the  end 
of  each  succeeding  month.  For  the  Mediterranean  ports  the  average  during  the  llrst 
three  months  of  the  year  steadily  advanced,  but  in  April,  May,  June,  ami  July  showed 
steady  declension,  and  in  the  last  five  months  of  the  year  jumped  rapidly,  Algiers,  for 
iuBtance,  advancing  from  a  total  average  of  25.33  francs  at  the  end  of  August  to  25.50^ 
francs  in  September,  and  28.97  francs  in  Octol)er,  31.80  francs  in  Novendjer,  and  34.39^ 
francs  in  December.  Genoa  averaged  26  shillings  9il  pence  at  the  end  of  August,  and 
jumped  to  28  shillings  in  September,  29  shillings  2j  pence  in  Octoljer,  30  shillings 
8  pence  iu  November,  and  31  .shillings  Sh  pence  iu  ftecember,  while  Marseille  in- 
creased from  an  average  of  28.9«j'|  francs  at  the  end  <il  August  to  29.90J  francs  in  Sep- 
tember, 32  francs  in  October,  3().93  francs  in  .November,  and  40.01IJ  francs  in  l<ecem- 
ber,  while  Port  Said  advanced  from  26  shillings  llj  pence  at  the  end  of  August  to 
28  shillings  \  pen.e  in  September.  30  shillings  IU  {lence  in  0<'tobcr,  33  shillings 
10^  pence  in  November,  and  35  shillings  9J  pence  in  December.  During  the  first 
four  months  of  the  year  average  freights  for  the  bay  and  coast  steadily  increased,  but 
during  the  next  three  months  declined,  and  in  the  last  five  months  of  the  year  rap- 
idly appreciated,  Cardiff  to  Bordeaux  jumping  from  a  total  average  of  19. 36^" francs  at 
the  end  of  August  to  2(».13\  francs  in  September,  21.11  francs  in  O.:tol)er,  22.20  fraacs in 
November,  and  24.943  francs  in  December,  while  Havre  increased  from  12  shillings  11^ 
pence  at  the  eml  of  August  to  13  shillings  1 J  pence  in  September,  13  shillingsS^'  pence 
m  October,  13  shillings 9 J  pence  in  November,  and  14  shillingsin  December.  Nantes 
jumped  from  18.16  francs  at  the  close  of  August  to  18.74  francs  in  September,  19.95 
francs  in  October,  21.53  francs  in  November,  and  23. 07;}^  francs  in  December,  while 
Rouen  appreciated  from  14  shillings  at  the  end  of  August  to  14  shillings  3  pence  in 
September.  14  shillings  7^  pence  in  October,  15  shillings  5^  pence  in  November,  and 
16  shillings  2^  pence  in  December.  Cntil  the  clo.se  of  September  there  was  little 
change  in  the  average  of  freights  to  the  South  American  and  Brazilian  ports,  Monte- 
video from  January'  to  September  ranging  between  25  shillings  5  pence  to  26  shillings 
5 J  pence,  but  by  the  close  of  October  the  total  average  had  jumped  to  27  shillings  11^ 

gence,  in  November  to  29  shillings  8  pence,  and  in  December  to  30  shillings  6^  pence. 
liver  Plate  averagetl  between  23  shillings  i  pence  and  25  shillings  10  pence  during 
the  first  nine  months  of  the  year  and  then  appreciated  to  27  shillings  2^  pence  in 
October,  27  shillings  llf  penc'e  in  November,  and  30  shillings  5  pence  in  December. 
Rio  de  Janeiro  aA-eraged  between  27  shillings  }  pence  and  28  shillings  2J  pence  in  the 
first  10  mouths  of  the  year,  and  advanced  to  28  shillings  9|  pence  by  the  close  of  Novem- 
ber, and  29  shillings  7  pence  at  the  end  of  the  year.  Eastern  freights  also  showed 
little  variation  during  the  first  nine  months  of  the  year,  but  by  the  close  of  October 
Colombo  had  advanced  from  an  average  of  30  shillings  10  pence  in  September  to 
38  shillings  3  pence  and  40  shillings  5  pence  in  November,  while  for  the  Canary  Islands, 
Las  Palmas  ranged  between  19  shillings  10  pence  and  22  shillings  5^  pence  in  the 
first  nine  months  of  the  year,  and  the  average  during  the  last  three  months  increased 

32910—16 52 


814       SHIPPING    BOARD,  NAVAL    A  UX  I  LIAR  V,  AND    MERCHANT    MARINE. 

from  20  shillings  4^  peace  at  the  clotie  of  October  to  21  shillings  1^  pence  in  November 
and  21  shillings  11  pence  in  December.  Bay  and  coast  freights  from  Swansea  during 
the  first  seven  months  of  the  year  were  somewhat  irregular.     Havre  ranging  between 

12  shillings  4^  pence  and  14 'shillings  7  pence  during  the  12  months,  while  Rouen 
averaged  between  14  shillings  4|  pence  and  16  shillings!  pence  in  the  first  nine  months 
of  the  year,  and  the  rale  at  the  end  of  October  was  15  shillings  If  pence,  which  was 
increased  to  15  shillings  6  pence  in  November  and  15  shillings  10^  pence  in  December. 
Genoa  averaged  between  18  shilling.?  6  pence  and  25  shillings  lOf  pence  in  the  first 
nine  months  of  the  year,  an  average  which  was  increased  to  27  shillings  4^  pence  in 
October,  28  shillings  lOf  pence  in  November,  and  30  shillings  7\  pence  bv  the  end 
of  December. 

FREIGHT   RATE   FLUCTUATIONS. 

The  year  1915  opened  with  rates  ruling  at  levels  in  excess  of  the  highest  figures  paid 
during  1914,  the  demand  for  tonnage  being  of  a  brisk  character,  with  available  vessels 
insufficient  to  meet  inquiries.  Cardiff  to  Genoa,  for  instance,  was  fixed  at  the  then 
high  level  of  30  shillings,  the  lowest  rate  accepted  during  the  month  being  18  shillings, 
while  the  average  worked  out  at  25  shillings  10^  pence.  Rouen  reached  a  maximum  of 
16  shillings,  and  the  lowest  figure  touched  was  12  shillings  6  pence  and  the  average  13 
shillings  5j  pence,  while  the  River  Plate  was  done  down  to  18  shillings  6  pence  and 
reached  a  maximum  of  27  shillings,  the  average  working  out  at  23  shillings  J  pence.  A 
report  toward  the  close  of  Januaiy  that  the  Italian  Government  had  requisitioned  200 
of  that  country's  steamers  to  transport  coal  and  grain  to  Italy  created  a  shortage  of 
tonnage,  and  rates  consequently  stiffened,  the  top  rate  from  Cardiff  to  Genoa  at  33 
shillings  6  pence  in  P^ebruary  showing  a  rise  of  3  shillings  6  pence  when  compared  with 
the  maximum  for  January,  and  the  lowest  rate  of  31  shillings  marked  an  increase  of 

13  shillings  when  compared  with  the  bottom  figure  accepted  in  Januarj'.  The  average 
of  32  shdlings  3^  pence  realized  in  February'  sho^ved  an  advance  of  6  shillings  5 
pepce.  The  lowest  rate  ac<  epted  to  Rouen  in  February  was  15  shillings  10^  pence, 
as  compared  with  12  shillings  (i  pence  in  Jainiarj-,  an  advance  of  3  shillings  4J  pence, 
while  the  maximum  rate  of  16  shillings  6  pence  marked  an  appreciation  of  1  shilling 
6  pence,  and  the  average  at  16  shillings  1  pence  a  rise  of  2  shillings  7]  pence.  River 
Plate  averaged  25  shillings  4  pen,-e  in  Februan,^,  or  an  advance  of  2  shillings  3f 
pence.  In  March  rates  receded  somewhat  sharply  owing  to  stemming  difficulties, 
caused  by  the  fact  that  collieries  were  unable  to  produce  coals  sufiicient  to  meet  the 
needs  of  both  the  Admiralty  and  the  commercial  community.  Genoa,  for  instance, 
averaged  29  shillings  10  pence  against  32  shillirgs  3^  pence  in  Februaiy,  Rouen  15 
shillings  3  pence  compared  with  16  shillings  1  pence,  and  Las  Palmas  19  shillings  4^ 
pence  against  21  shillings  6  pence. 

At  this  time  the  German  submarine  "blockade"  was  in  full  force,  but  this  dastardly 
method  of  attempting  to  wreck  England 's  sea  supremacy  proved  an  utter  failure,  the 
percentage  of  tonnage  sunk  being  truly  insignificant,  and  later  on  Germany's  scheme 
to  isolate  England  was  further  diminished  by  the  methods  taken  by  the  British  Navy 
to  deal  with  the  submarine  menace.  Despite  the  extra  risk  taken  by  ships  running 
to  the  United  Kingdom  ports,  rates  further  depreciated,  and  by  July  had  reached 
comparatively  low  levels,  Genoa  fixing  down  to  as  low  as  16  shillings  in  July,  while 
Lisbon  was  done  at  10  shillings  and  Rouen  8  shillings.  These  figures  constituted  the 
lowest  levels  touched  during  the  year,  and  the  average  for  Genoa  for  the  month  worked 
out  at  20  shillings  6  pence,  Lisbon  12  shillings  7  pence,  and  Rouen  14  shillings  11  pence. 
This  substantial  decline  in  rates  was  caused  mainly  by  the  Government  in  May  having 
prohibited  the  export  of  coals,  except  by  license,  to  all  neutral  countries,  which  con- 
sequently caused  a  slackening  in  the  demand  for  vessels,  and  foreign  shipments  were 
appreciably  diminished.  Just  when  the  freight  market  was  recovering  from  the 
effects  of  the  activities  of  the  coal  licensing  committee,  the  market  received  another 
rude  shock  by  the  action  of  the  miners,  who  were  persisting  in  their  demands  for  a 
revision  of  the  coal-field  agreement,  which  terminated  on  June  30.  The  coal  owners 
having  refused  to  enter  into  negotiations  on  the  subject,  in  view  of  the  fact  that  the 
miners  were  receiving  a  war  bonus  of  17i-  per  cent  the  Government  intervened  and 
placed  proposals  before  the  men,  which  were  rejected.  The  miners'  executive  com- 
mittee requested  the  colliers  to  remain  at  work  while  negotiations  were  in  progress, 
but  they  refused,  and  ceased  work,  with  the  result  that  all  the  Welsh  collieries  were 
idle  for  a  full  week,  ar.d  were  not  restarted  until  practically  the  whole  of  the  men's 
demands  had  been  grnnt^d.  This  unpatriotic  action  caused  trade  in  South  Wales 
to  come  to  almost  a  standstill,  and  tonnage  accumulated  in  the  various  ports,  notwith- 
standing that  many  veodtls  were  diverted  from  the  district.  A  large  number  of  coal 
contracts  were  placed  ii:  J.merica,  and  thus  South  Wales  lost  a  good  number  of  cus- 


SHIPPING    BOAKD,  NAVAL    AUXILIARY,  AND    MERCHANT    MARINE.        815 

toiuers.  The  inquiry  in  tlie  circumstances  was  materially  reduced,  and  rates  con- 
tinued to  rule  at  comparatively  low  levels.  In  August,  however,  there  was  an  ex- 
pansion in  the  demand,  and  freights  gradually  advanced,  notwithstanding  that  a  new 
order  in  council  was  issued  proMbiting  shipments  of  coal  to  all  countries  but  British 
possessions  and  protectorates  without  a  license. 

EXTRAORDINARY    RISE    IN    R.VrES. 

Freight  rates  from  this  time  onward  for  the  remainder  of  the  year  advanced  by 
leaps  and  bounds  until  they  reached  levels  which  easily  eclipsed  all  previous  rec- 
ords in  the  annals  of  steamelup  owning.  At  the  close  of  September  news  was  received 
that  the  Greek  Government  had  ordered  all  that  country's  vessels  to  proceed  to 
Piraeus.  At  this  time  the  withdrawal  of  this  tonnage  from  the  market  was  a  very 
serious  matter,  for  the  carrying  capacity  of  available  vessels  was  already  decidedly 
insufficient  to  meet  the  demands  of  charterers.  The  action  of  the  Greek  Govern- 
ment particularly  affected  South  Wales,  for  a  large  number  of  these  vessels  were 
engaged  in  carrying  the  produce  of  the  Welsh  coal  field  abroad.  Then,  on  top  of  this, 
came  the  news  that  a  serious  landslide  had  occurred  in  the  Panama  Canal  and  that 
the  waterway  would  not  be  navigable  until  early  in  191G.  Thus  the  carrying  capac- 
ity of  the  world's  tonnange  was  further  diminished,  a  number  of  vessels  being  held 
up,  while  those  which  were  about  to  proceed  through  the  canal  were  forced  to  take 
the  old  routes,  which  seriously  prolonged  the  voyage.  The  effect  of  the  action  of 
the  Greek  Government  will  be  realized  when  it  is  pointed  out  that  the  average  rate 
to  Genoa  jumped  from  ;?1  shillings  4  pence  in  September  to  48  shilHngs  6|  pence  in 
November:  Port  Said,  33  shillings  4  pence  to  51  shillings  8  pence:  Lisbon,  from  19 
shillings  1  pence  to  27  shillings  5|  pence;  Havre,  14  shillings  4 A  pence  to  17  shillings 
9\  pence;  Rouen,  16  shillings  to  16  shillings  9|  pence;  River  Plate,  29  shillings  4^ 

Eence  to  40  shilUngs  5^  pence;  and  Las  Palmas,  from  18  shillings  6  pence  to  28  shil- 
ngs  4  pence.  The  top  rate  paid  to  Genoa  in  September  was  40  shillings,  which  was 
increased  to  45  sliillings  in  October,  while  Port  Said  reached  the  maximum  of  45 
shillings  in  September,  which  advanced  to  48  shillings  in  October,  and  Rouen,  with 
a  maximum  figure  of  18  shillings  in  October  showed  an  advance  of  1  shilHng,  while 
the  River  Plate  jumped  from  30  shilling  in  September  to  45  shilling  in  October.  In 
November  the  tonnage  scarcity  was  more  acute  than  ever  and  rates  substantially 
appreciated,  Genoa  reaching  a  maximum  of  54  shillings.  Port  Said  55  shillings,  Lis- 
bon 29  shillings,  HavTe  20  shillings,  and  Rouen  23  shillings,  while  the  averages  also 
displayed  a  marked  improvement,  Genoa  averaging  48  shillings  6|  pence  in  November 
compared  with  40  shilUngs  4^  pence  in  October;  Port  Said,  51  shillings  8  pence  against 
44  shillings  4|  pence;  Lisbon,  27  shillings  5f  pence  against  23  shillings  6  pence, 
Havre,  17  shillings  9^  pence  against  14  shillings  9^  pence;  Rouen,  19  shillings  10| 
pence  against  16  shillings  9|  pence;  and  Las  Palmas,  29  shillings  4h  pence  against  28 
shillings  4  pence. 

About  the  middle  of  November  two  new  orders  in  council  were  issued,  which 
directly  affected  the  shipping  industry  and  were  designed  to  remedy  the  shipping 
shortage,  which  was  more  pronounced  than  ever.  These  orders  prohibited  British 
vessels  as  from  December  1,  1915,  trading  from  one  foreign  port  to  another  foreign 
port  without  a  license,  and  gave  powers  for  requisitioning  vessels  to  carry  necessities. 
The  effect  of  this  order  was  that  vessels,  after  discharging  their  cargo  at  a  foreign  port, 
were  compelled  to  make  their  way  back  to  the  United  Kingdom  unless  they  were 
granted  a  license  to  proceed  to  another  foreign  port.  This  order  was  issued  on  account 
of  the  fact  that  a  large  number  of  British  boats  were  known  to  be  trading  exclusively 
between  foreign  countries.  During  the  last  month  of  the  year  rates  touched  the 
highest  levels  reached  during  the  whole  12  months,  Alexandria  reaching  a  maximum 
of  72  shillings  6  pence;  Algiers,  70  francs;  Barcelona,  41  shillings;  Bahia  Blanca,  39 
shillings  6  pence;  Bordeaux,  45  francs;  Dieppe,  22  shillings  G  pence;  Genoa,  66 
shillings;  Gibraltar,  33  shillings;  Havre,  22  shillings;  Lisbon,  32  shillings  6  pence; 
Las  Palmas,  33  shillings;  Marseilles,  76  .francs;  Naples,  66  shillings;  Nantes,  41 
francs;  Port  Said,  70  shillings;  River  Plate,  40  shillings;  Rouen,  23  shillings;  and 
St.  Nazaire,  41  francs.  Even  the  lowest  rates  touched  in  December  were  very  sub- 
stantially below  the  highest  figiu-e  ruling  in  normal  times,  the  lowest  rate  accepted 
for  Genoa  during  the  month  being  56  shillings;  Port  Said,  60  shillings;  Lisbon,  29 
shillings;  Ha\Te,  20  shillings;  Rouen,  20  shillings;  River  Plate,  38  shillings  6  pence; 
and  Las  Palmas,  30  shillings,  while  the  averages  marked  a  material  advance  oyer  the 
average  to  the  same  ports  in  November,  Genoa  averaging  no  less  than  61  shillings; 
Port  Said,  65  shillings  ^  pence;  Lisbon,  31  shillings  one-half  pence;  Havre,  21  shil- 
Ungs; Rouen,  21  shilUngs  7|  pence;  River  Plate.  39  shilUngs  3A  pence;  and  Las 
Palmas,  32  shillings. 


816        SHIPPING    BOARD,  NAVAL   AUXILIARY,  AND    MERCHANT    MARINE. 

SEVEN   years'    averages. 

5The  average  rates  (on  coal)  to  representative  ports  from  Cardiff  during  tl;c  past 
seven  years  is  shown  in  the  following  table: 


Port. 


Cardiff  (including  Newport)  to 
Mediterranean- 
Algiers  ' 

Alexandria 

Barcelona 

Genoa 

Giliraltar 

Marseille ' 

Port  Said 

Hay  and  coast- 
Bordeaux  • 

Dieppe 

Havre 

Lisbon 

Rouen 

St.  Nazaire ' 

South  America  and  Brazil- 
Montevideo 

River  Plate 

Rio  de  Janeiro 

Kastern— 

Aden 

Colombo 

Canary  Islands — 

Las  Palmas 


1909 


6.62i 

5/11 

6/lOA 

6/7^ 

5/lOA 

7.25' 

5/9 

5.00 

4/3 

4/0 

4/9| 

4/11 

4.65 

10/6 

10/3i 

10/8A 

7/6 
7/llJ 

6/li 


1911 


7. 12i 

6/2i 

7/Oi 

6/84 

5/9i 

7.87J 

6/01 

5.47J 

4/4* 

4/0| 

4/101 

5/0^ 

4.78 

14/6 
15/3i 
14/5J 


9/22 
7/li 


S.53 

7/5J 

8/5i 

8/1 

7/1 

9.53 

7/6 

6.53 

4/8 

4/8J 

6/3i 

4/11 

6.06 

16/95 
18/lf 
16/6? 

9/lU 
10/6J' 

8/1 J 


1912 

1913 

12.09' 

10.06 

nm 

9/lOi 

11/61 

9/9i 

11/7 

9/1 

8/111 

8/3J 

13.00 

10.87J 

nm 

9/7 

8.03 

6.09i 

5/111 

4/11 

5/9| 

4/lOi 

8/2J 

7/04 

6/7J 

5/8* 

7.61 

6.57* 

19/3^ 

16/93 

20/8-i 

17/8 

20/lJ 

16/10 

12/7i 

12/0* 

13/44 

12/4 

10/SJ   . 

8/74 

1914 


9.21 
10/3 

9/1 J 
8/104 
7/11* 
10.69 

9/7* 

7.17 

4/4 

5/U 

6/2^ 

9/1  i 

7.62i 

13/64 
14/1* 
13/8f 

11/4* 
11/14 

7/4* 


34.39* 

36/0  " 

28/lOJ 

31/84 

22/1 J 

iO.m-l 

35/93 

24.94  •J 

13/2 

14/0 

20/10 

16/2* 

20.11 

30/6J 

30/5 

29/7 

37/9 
40/5 

21/11 


'  Quoted  in  franc  5. 


SHIPPING   BOARD,  NAVAL   AUXILIARY,  AND   MERCHANT   MARINE.       817 


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818        SHIPPING    BOARD,  XA\  AJ,    AUXlLlAKi,  AND    MEKCHANT    MARINE. 

repokt  by  the  san  francisco  office  of  the  bureau  of  foreign  and  domestic 
commerce  relative  to  ocean  freight  rates  from  the  port  op  san  francisco. 

March  11,  1916. 
Bureau  of  Foreign  and  Domestic  Com/nerce: 

Referring  to  Tjureau  letter  of  February  2,  calling  for  data  ou  ocean  freight  rates, 
and  telegram  of  the  10th  instant,  stating  that  such  data  should  be  mailed  to-day,  there 
is  inclosed  such  meager  material  as  it  has  been  possible  to  collect  to  date. 

Partial  information  is  given  as  to  rates  to  Hongkong,  Manila,  and  Shanghai,  furnished 
by  the  Toyo  Kisen  Kaisha;  to  Sydney,  Australia,  furnished  by  the  Union  Steamship 
Co.  of  New  Zealand  (Ltd.);  to  Copenhagen,  Denmark,  furnished  by  the  East  Asiatic 
Co.  (Ltd.). 

Tnere  has  been  no  particular  disposition  to  withhold  information,  except  in  one  case, 
where  the  company  did  not  care  to  go  on  record  at  all,  but  there  has  been  a  disposition 
to  promise  and  not  fulfill;  parties,  on  whom  I  had  particularly  depended  failed  to 
supply  the  desired  information,  though  personal  calls  were  made  in  addition  to  written 
requests.  Calls  made  yesterday,  after  receipt  of  telegram  fi-om  the  bureau,  brought 
forth  renewed  promises  of  data  within  a  day  or  so  from  some  of  the  concerns,  but  in 
other  cases  I  was  informed  that  it  was  simply  impossible  to  get  out  the  information, 
the  general  excuse  being  that  it  required  too  much  work  for  an  overburdened  staff. 
This  is  borne  out  by  the  fact  that  several  steamship  companies  are  working  evenings. 
Mr.  H.  E.  Moore,  traffic  manager  of  W.  R.  Grace  &  Co.,  advised  me  yesterday  that  he 
had  been  obliged  to  neglect  the  ordinary  coiTespondence  for  the  past  two  weeks  because 
of  the  great  number  of  telegrams,  cables,  and  conferences  claiming  his  attention. 

I  had  been  particularly  depending  on  W.  R.  Grace  &  Co.  for  information  as  to 
rates  to  the  west  coast  of  South  America.  Mr.  Moore  stated  that  rates  in  that  direction 
had  not  advanced  to  the  extent  that  thej-  had  in  other  trade  routes — that,  for  example, 
the  old  rate  of  $12  on  general  merchandise  had  risen  to  but  SM  per  ton. 

The  Toyo  Kisen  Kaisha  is  unable  to  raise  its  rates  on  boats  subsidized  by  the  Jap- 
anese Government,  though  seeking  authority  to  do  so;  on  its  chartered  boats,  how- 
ever, the  rates  are  considerably  higher  and  are  quoted  only  from  boat  to  boat.  This 
applies  to  the  Java-Pacific  Line  and  casual  sailings,  rates  running  anywhere  from 
$30  to  160  per  ton. 

The  closing  of  the  Panama  Canal  is  to  some  extent  responsible  for  the  present  high 
rates,  as  prior  to  its  closing  there  were  more  ships  available  for  the  Oriental  trade; 
the  early  opening  of  the  canal  will  undoubtedly  supply  more  carriers  and  place  rates 
on  a  more  stable  basis,  though  they  will  probably  remain  high  for  some  time  to 
come.  Mr.  Otto  Jelstrup,  general  agent  of  the  East  Asiatic  Co.  (Ltd.),  advises  that 
with  the  reopening  of  the  canal  a  fleet  of  Danish  motor  ships  will  touch  at  San  Fran- 
cisco every  three  weeks  westbound. 

Mr.  Back,  of  the  Union  Steam  Ship  Co.  of  Xew  Zealand  (Ltd.),  in  speaking  of  the 
difficulty  of  supplying  data  for  this  report,  stated  that  they  had  offered  $115,000  per 
month  for  the  charter  of  one  steamer  and  it  had  been  refused,  $140,000  being  asked. 
Even  at  the  lower  rate  it  would  be  necessary  for  them  to  get  $35  to  $40  per  ton  for 
freight  in  order  to  make  any  profit. 

If  the  data  on  charters  and  rates  promised  "as  soon  as  we  can  get  at  it"  and  "in 
a  day  or  so"  is  received  shortly  it  will  be  forwarded,  though  it  may  be  too  late  for 
any  particular  use  of  the  btu'eau. 

The  various  concerns  from  whom  information  is  sought  will,  however,  be  visited 
again  with  hope  of  result.*. 

E.  G.  Babbitt,  Vovanercial  Agent. 

(Thereupon,  at  12  oclock,  tlic  hearing  was  adjourned  until  to-mor- 
row, Thursday,  March  9,  1916,  at  10.30  o'clock  a.  m.) 


shipping  board,  naval  auxiliary,  and  merchant  marine.     819 

Committee  on  Merchant  Marine  and  Fisheries, 

House  of  Representatives, 

Thursday,  March  9,  1916. 
The  committee  met  at  10.30  o'clock  a.  m.,  Hon.  Joshua  W.  Alex- 
ander (chairman)  presiding. 

The  Chairman.  I  desire  to  submit  for  the  record  the  following 
telegram,  received  hj  Mr.  Edwin  H.  Duff  from  Mr.  Wm.  Livingstone, 
president  of  the  Lake  Carriers  Association,  Detroit,  Mich. : 

Detroit,  Mich.,  March  8,  1916. 
Edwin  H.  Duff, 

1306  F  Street,  NW.,  Washington,  D.  C: 
Welland  Canal  is  26|  miles  long,  has  25  locks,  each  270  feet  long  and  45  feet  wide, 
with  14  feet  of  water  on  sills.     Total  rise  or  lockage  is  326|  feet.     These  are  dimen- 
sions of  present  old  canal .     New  Welland  Canal  not  expected  to  be  completed  until 
latter  part  year  ]9]8. 

Wm.  Livingstone, 
President  Lake  Carriers  Association. 

(No  one  else  having  appeared  to  be  heard  on  the  bill,  on  motion 
the  hearings  were  closed.) 

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